After three weeks on the brink of collapse, Greek banks have finally reopened marking the return of some form of normality. However, strict capital controls remain in place for the foreseeable future, as does the general state of political and economic uncertainty. Total damage cost is still being counted.
Since Greece's parliamentary bailout vote on July 15th, its euro zone partners have accelerated the process of averting a Greek euro exit. Although its long-term completion is far from certain, euro zone members will ensure Greek banks are kept afloat and due payments met during bailout negotiations.
For Prime Minister Alexis Tsipras' government and his Syriza party, the bailout program proved a massive humiliation and ideological defeat. It was antithetical to their political platform and contrary to their electoral promises of January 2015. Ironically, just one week before his climbdown, Tsipras and Syriza were basking in the euphoric victory of the July 5th snap referendum. It proved a pyrrhic victory and emotional exercise in national defiance. Tsipras called on Greeks to vote "no" to creditors' demands in a technically convoluted question, only to say "yes" directly to creditors one week later.
This begs the questions: Why is Tsipras and his Syriza government still in power? Could they win a snap election planned for either September or October -- as hinted by Syriza officials?
Tsipras may be down, but he is not out. Despite loud protests and defections from Syriza's far-left faction during the bailout's parliamentary vote, the Prime Minister did not lose his mandate. Technically, he prevailed with three votes above the required threshold.
Secondly, Tsipras still remains highly popular and retains a loyal base. He is a gifted orator whose compelling rhetoric appeals to those with nothing to lose. He effectively speaks their language, voices their hopes and expresses their fears. Furthermore, Syriza has no alternative leader who possesses Tsipras' youth and charisma.
Despite serious reversals, Tsipras' is skillfully spinning the storyline to his advantage His usual confident rhetoric of defiance has now increasingly shifted to one of victimhood. According to Tsipras' narrative, he was blackmailed into signing the euro zone bailout and Greeks were frightened into submission. During the parliamentary bailout debate, Tsipras noted "The captain does not leave the ship during the storm." What's missing from the storyline is that Captain Tsipras irresponsibly led the ship directly into the storm when it was avoidable.
Ironically, under Tsipras' leadership, Greece has paid an enormous price economically, politically and diplomatically. Tsipras' overplayed his hand and Greece became the victim of his overreach. He failed to distinguish between his popularity at home and his leverage in Europe, where he tried to punch above his weight and was floored.
Furthermore, the rhetorical gymnastics that Tsipras and his ministers played with their European peers soured dialogue and communication. No trust remains. Restoring it entails an enormous task. Overall, his five-month game of reckless, high-risk brinksmanship backfired. After months of bluffing, Europe did not blink. In the end, Tsipras had no plan B, his threat to collapse Europe with Grexit failed and he completely capitulated. Today, Greece is clearly worse off than when he came to power on January 2015.
Tsipras and his party have clearly placed raw power above political conviction. They will eagerly cling to office at any cost. They do not want to be Greece's first, and potentially last, far-left government after just five months in power. Although they caved in to creditors on the bailout, they refuse to submit to a creditors' coup of their government.
For now, Syriza is aware that ordinary Greeks desperately need a temporary sigh of relief after teetering on the brink of catastrophe. Citizens crave for a modicum of normalcy after weeks of exhaustion and weariness marked by national paralysis and bank closures. However, the extreme situation has also triggered mixed reactions, including much public anger and fury at the creditors' bailout terms. Tsipras is effectively exploiting these sentiments.
Tsipras is also shrewdly presenting Greece's bailout deal with Europe in the context of himself as the patriotic Greek David who courageously went up against the European Goliath. He will continue to do so and increase the volume exponentially should elections take place in September or October.
However, Tsipras must also cautiously gauge the public mood and popular fatigue caused by the recent near-Grexit and snap referendum. For now, he is consolidating his position politically by reshaping his cabinet and marginalizing Syriza's extreme left flank that rebelled against him over the third bailout.
Syriza is also aware that Greece's centrist, pro-Europe parties are currently ill-prepared for an election. They are still lacking effective leadership and are not organized into a coherent opposition. Despite Syriza's setbacks, the opposition remains largely reactive on the policy front. Furthermore, they still need to present a convincing narrative and compelling vision for Greece.
As a skilled political survivor and opportunist, Tsipras will re-invent himself in any shade of left that circumstances demand and necessity requires. Despite the traumatic experiences of recent weeks, Tsipras will continue to dominate the Greek political scene for now. He will set the pace and seize the initiative accordingly. Ultimately, he will prove a formidable force in any upcoming election.