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Greece's centre-right government bears good news for Europe amid volatile landscape


IF you're looking for an optimistic story in Europe, try Greece. Yes, you read that right. Having lost a quarter of its economy in a devastating recession, Greece has turned the corner, its democracy intact, its extremist temptations defeated and its anti-Americanism defunct.

The landslide election win on Sunday of Kyriakos Mitsotakis, the dynamic leader of the centre-right New Democracy party, marked the end of a chapter. Greece has rejected Alexis Tsipras, the leftist leader who took the country to the brink of ruin in 2015 before discovering a pragmatic streak. It also voted the neo-Nazi Golden Dawn out of parliament. At the height of the crisis, Golden Dawn had become the country's third-largest party.

First into populism, Greece is now first out. For a country in free fall, the anchors of the European Union and Nato are not so negligible after all. Europe is not simply a story of growing nationalism and xenophobia. It's a continent in violent flux, torn between liberal democratic and nativist currents.

Despite unemployment that reached almost 30 per cent, a chaotic near-exit from the euro, huge bailouts to save it from bankruptcy, mandated austerity programmes and a wave of desperate refugees from Syria, Greece stabilised itself. It's a reminder that reports of democracy's demise are exaggerated.

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The "kolotoumpa" (or "somersault") is the term used for Greece's volte-face in 2015 when it voted in a referendum to reject the terms for an international bailout, only for Mr Tsipras, the leader of the far-left Syriza party, to ignore the results and conclude a bailout on even tougher terms.

Yes, Britain, democracies do change their minds from time to time when they make disastrous decisions.

That somersault is now completed. Mr Mitsotakis is a Harvard- and Stanford-educated former McKinsey man from one of Greece's preeminent political families. To be elected, he had to overcome perceptions that he was too "American" and too technocratic.

Through a hard-driving campaign in which he promised to cut corporate taxes, unblock privatisation, deliver a digital transformation of the economy, attract investment and bring efficiency to the public sector, Mr Mitsotakis convinced Greeks he was the man to turn glimmerings of recovery into sustainable growth. With an absolute majority in parliament, he has the means to fast-forward his programme.

It won't be easy. Although unemployment has fallen to about 18 per cent and modest growth has been achieved, Greece is still bound by the fiscal constraints imposed by Germany and other creditors that oblige it to produce a primary budget surplus. Mr Mitsotakis will need to perform a delicate balancing act to deliver on his promise of spurring growth and investment by slashing corporate taxes.

He will have to rein in New Democracy's legacy forces of cronyism and prioritise entrepreneurship and innovation. The old model won't work.

The new prime minister is used to such challenges. Back in 2013, when he was minister of administrative reform and I met him in a building besieged by protesters opposed to the cuts in public employees demanded by Greece's creditors, he told me: "The country has been stretched to its limits." It could have crumbled, like the Weimar Republic. If Greece did not, it was because of European institutions built to resist nationalism and avert catastrophe.

By helping Greece through its agony, the United States nullified resentments that went back to its support for the military junta between 1967 and 1974. The Obama administration won Mr Tsipras over and so dragged him towards the centre. Joe Biden, as vice-president, told the then-prime minister not to take rash decisions - such as leaving the euro - that would be irreversible. A breakup of the eurozone, with other countries possibly following Greece, was avoided.

Greek anti-Americanism has now largely died, buried by a leftist government. It once took violent form in the Nov 17 group, responsible for a number of assassinations. But several factors - Germany replacing the United States as the Greek boogeyman with its austerity demands, new tensions with Turkey that have reminded Greece of the importance of US support, the fading into history of the junta era, a strong sense of US solidarity through the crisis - have altered Greek views. The election of Mr Mitsotakis is consistent with this shift.

He will take office with Turkey and the Greek Cypriot government embroiled in conflict over offshore oil and gas in the eastern Mediterranean. In May, the State Department said it was "deeply concerned" by Turkish plans to begin drilling in an area claimed by Cyprus, calling the step "highly provocative" and urging Turkish authorities to "halt these operations". The new prime minister will want to keep things calm in the region. He's a man who believes deeply in the trans-Atlantic bond that US President Donald Trump has often belittled. Tourism has been surging and is vital to the Greek economy. Greece wants a Turkey anchored in the West, not a Turkey veering towards Vladimir Putin's Russia and acting bellicose.

It's a new day in Greece. Now all that's needed for the European Union is a British somersault on Brexit. NYTIMES

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