In war, any general's nightmare is landing on the receiving end of a pincer movement. The manoeuvre sees the attackers surround their opponents on both sides, like a crab claw, allowing a two-flank assault on the forces suddenly trapped in the middle. It happens in most wars and it's happening to poor, hapless Alexis Tsipras, prime minister of Greece.
On one side, Mr. Tsipras and his allies within the ruling Syriza party are battling Greece's creditors – the European Union, the European Central Bank and the International Monetary Fund – who insist on deep economic reform and more austerity in exchange for a fresh bailout package. This battle is well known and endlessly reported in the press.
On the other side, he is battling the forces within his own party who threaten to revolt if Mr. Tsipras endorses a bailout deal that defies his election pledge to end the austerity that has deepened the apparently endless Greek recession. This battle is less well known outside of Greece, but its potential to sabotage his career and the fortunes of Syriza along with it should not be underestimated.
By definition, he cannot please both sides. Already, there is talk in Athens that Mr. Tsipras, who seems willing to strike a compromise deal with Greece's creditors, may have to rely on opposition parties to secure enough parliamentary votes to approve any new bailout deal. If that were to happen, Mr. Tsipras would find himself hostage to any number of smaller parties in the fractious 300-seat parliament; Syriza won 149 seats – two seats short of an outright majority – in the January election.
There is no telling what the opposition parties would demand in exchange for their loyalty. New political instability could trigger confidence votes on Mr. Tsipras's leadership or a new election – or both. As Mr. Tsipras tries to make nice with Greece's creditors and his own party members, he is entering uncharted territory. Potentially devastating accidents cannot be ruled out. Already, the bookies have significantly lifted the odds of Grexit – Greece leaving the euro – by the end of the year. (Irish bookmaker Paddy Power is offering 11/10 odds of Grexit, meaning a $10 bet, if successful, would pay $11.)
The Syriza hotheads, many of them unschooled in basic economics or finance, and apparently oblivious to the notion that you cannot distribute wealth unless you first create wealth, are making life difficult for Mr. Tsipras. One is the old Communist warhorse and energy minister Panagiotis Lafazanis. He has tried to stop several privatizations and is opposed to the expansion of the Skouries gold mine, owned by Vancouver's Eldorado Gold, in Greece's northeast.
Mr. Lafazanis does not rule out Grexit. In an interview this week with Greece's To Vima newspaper, he said, "What [the creditors] want is to socially smash the country and humiliate the government. I don't think there is much room for a positive accord between the Syriza government and the lenders. Rather they want us to surrender."
To give you a measure of the discord within the ruling party, 22 Syriza parliamentarians wrote to Mr. Tsipras this week demanding that the government restore collective bargaining rights for workers and reverse pension reform. Greece's creditors have put pension reform at the top of the agenda. A new bailout deal without pension reform is virtually unimaginable, given the ability of pension costs alone to grind the economy into powder. Greece spends more on pensions than any other European Union country. In 2012, pensions ate up 17.5 per cent of Greece's gross domestic product, compared with the EU average of 13.2 per cent, Bloomberg reports.
Another cabinet member who could turn on Mr. Tsipras is finance minister Yanis Varoufakis, who has described himself as a libertarian Marxist and whose abrasive, confrontational – and refreshingly direct – manner has never gone over well in Brussels. He argues that piling austerity onto austerity will backfire, because it will squeeze what little life remains in the Greek economy – "like beating a sick cow in order to force it to produce more milk," he has said.
Mr. Tsipras removed Mr. Varoufakis from the front-line negotiating team. Rumours persist that he may quit the government in retaliation, though he has insisted he is staying put. The latest talk is that he will resign to form his own party if Syriza signs a deal with the creditors that he thinks will doom the Greek economy. Mr. Varoufakis is popular, and some political strategists think he could siphon off 5 per cent of the votes in a snap election, potentially wrecking any chance of Mr. Tsipras winning a majority.
By the end of the week, the situation was looking dire for Mr. Tsipras, which is not to say he was about to throw in the towel and accept the creditors' demands. On Thursday, the IMF yanked its negotiating team from Brussels, citing no progress in bailout talks with the Syriza team. On Friday, the Athens stock market was clobbered as Syriza submitted a new plan to creditors, one that included no pension cuts – meaning that the creditors are almost certain to trash it, as they have trashed every proposal from Athens since the January election. In the meantime, the Syriza rebels are digging in. Mr. Tsipras will need the skill, cunning and nerve of Houdini to escape the pincer movement. The bets are going against him.