PM Tsipras on collision course with Greek creditors

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Syriza leader Alexis Tsipras put his new government on a possible collision course with Greece's creditors by signalling right after Sunday's snap election that he has little enthusiasm for the bailout program he vowed in August to implement.

He did so by revealing that Anel (Independent Greeks) would be Syriza's coalition partner in the new government, as it was in the last government. Anel, which won 10 seats in the vote, is a small, right-wing populist party that opposes Greece's bailout programs because of their harsh austerity measures. It, like Syriza, claims they have plunged the country into deep recession and robbed it of its sovereignty.

The new coalition puts two anti-austerity parties in charge just as Greece's creditors – the European Union and the International Monetary Fund – are begging Greece to implement its new bailout program. Syriza, which won 145 seats in the 300-seat legislature in the Sunday election, fought the bailout until July, then reluctantly reversed course when it became apparent that further resistance would destroy the banks and send Greece hurtling out of the euro zone.

"By choosing a populist, anti-bailout party as his coalition partner, Tsipras sent the signal that he really doesn't want to do business with the rest of Europe," said Hari Tsoukas, a professor of business organization at Warwick Business School and candidate for the centrist To Potami party in the election (he failed to win a seat). "Implementing the program will not be a smooth process. … Grexit will be resurrected at some stage."

Mr. Tsoukas believes that if the creditors had little trust in the previous government, they can have little trust in the new one, whose makeup is similar. The main difference between the old and the new Syriza-Anel governments is that the new one no longer includes Yanis Varoufakis, the combative former finance minister who alienated Greece's creditors during the bailout negotiations earlier this year, and is shorn of the Syrzia's radical, far-left faction.

The revolt in the summer by Syriza's far-left faction cost Mr. Tsipras his majority in the Greek parliament, triggering the snap election that was won by Syriza.

In Brussels, European Union officials were quick to urge Mr. Tsipras to get moving on the reform measures that Syriza promised to implement in exchange for €86-billion ($128-billion) in new bailout loans – Greece's third bailout since 2010.

"I congratulate Alexis Tsipras and Syriza," Jeroen Dijsselbloem, the Dutch finance minister who leads the creditors' negotiations with the Greek government, said in a statement. "I now look forward to the swift formation of a new government with a strong mandate to continue the reform process in Greece."

But reform was slow and tortuous in Greece in the first two bailout programs and the third may be no exception. New Democracy, the centre-right party that led the government until its defeat by Syriza in the January election, was reluctant to push through all the economic reforms, such as privatizations, demanded by creditors. In its last year in power, in 2014, New Democracy put through virtually no reforms as it struggled to shore up its political base in the face of the Syriza onslaught.

Under Syriza, the reform effort died, to the point that all confidence in Greece's recovery evaporated. A deposit run almost wrecked Greece's banks; they were spared from death by capital controls that came into effect in July and remain in place.

To complete his end of the bargain and receive the staged bailout loans, Mr. Tsipras's government must implement another round of sharp tax increases and spending cuts and put a €25-billion rescue program in place for Greece's banks.

While he accepted the terms in the summer, he is is already talking about a "parallel program" – details to come – that would be aimed at helping poor Greeks. Funding the parallel program could lead to clashes with Greece's creditors.

"With honesty and hard work, we'll continue our efforts on behalf of the working classes," Mr. Tsipras said in a Tweet shortly after his victory was confirmed.

Mr. Tsoukas, the Warwick professor, and several economists think that Mr. Tsipras's desire to shield the poor from the sharpest edges of the austerity measures while trying to please the creditors could trigger a new crisis. "At best, Mr. Tsipras is conflicted," Mr. Tsoukas said. "He keeps saying Yes to the creditors while offering hope to the people. These are irrational policies."