It seems Greece’s Syriza government invested too much energy and hope in the Clinton family enterprise and that investment quickly went through the floor on Election Day (November 8). The focus on Democratic Party ties is of course not unusual given the large percentage of Greek-Americans who remain steadfast supporters of the Democratic Party and its values, and some of those provided their help in making sure Greek Prime Minister Tsipras had indirect conduits to Washington and the Democratic presidential candidate. It is also recognized that PM Tsipras worked closely with certain Greek oligarchs to open direct contacts to the Clinton Global Initiative, a fact that resonates unhappily in some elements of Greek society.
Immediate domestic impact
Because President Obama is scheduled to arrive next week, it basically took nanoseconds for the main Greek opposition party, New Democracy, massively ahead in opinion polls, to translate these conclusions into the Greek domestic body politic. The intent was clear; to reduce domestic significance of the Obama post-election Greece visit to little more than a symbolic gesture of a “Lame Duck” President who was unable to deliver a successor and to downgrade any potential political support Prime Minister Tsipras himself hoped to derive. We haven’t seen any useable metric on this, but a stopover by a sitting (but now Lame Duck) President whose chosen successor was roundly defeated the week before could not possibly be valued at even 50% of its pre-election value in today’s rough-and-tumble markets. In any event, the Syriza government was on the defensive after the Clinton loss and explained that it had previously opened ties to Trump’s two (very young) Greek-American advisers and that it saw no reason to expect American policies towards Greece would change.
No Democratic successor means limited policy continuity on the debt issue
Trump’s victory means the Obama team cannot guarantee any kind of policy continuity on the Greek debt issue, which is unfortunately all that seems to matter for Prime Minister Tsipras. Embarrassing questions of this nature will surely be asked if there is any joint press event. On the bright side, bilateral relations are excellent, military-to-military cooperation is top flight, and the American people clearly recognize what challenges Greece has had to face in this unstable region during the refugee crisis. You simply won’t find anyone traveling with President Obama able to guarantee a sympathetic hearing for Greece’s socialist-flavored economic policy desires after the inauguration. And we still don’t know whether Treasury Secretary Jack Lew will be joining Obama for the visit.
Greece’s Eurozone partners, like the opposition in Athens, will have absorbed the significance of the Trump victory as well. They have bigger fish to fry, so to speak, in Washington, especially on trade, and will not be expecting any more of President Obama’s anti-austerity interventions anywhere in the Eurozone, if any were actually warranted at this point. So even if President Obama was to theoretically press in the strongest possible terms for immediate decisions on medium-term debt relief for Greece, Berlin would listen politely, look at the calendar, and do nothing. Everyone in the Eurozone is now assuming that once President-elect Trump takes office, current U.S. support for more clarity on Greek debt relief will not be a much of a priority, if at all.
The only potential bright spot we can come up with on economic issues is the small and rapidly-closing window with the IMF, whereby after the visit the U.S. aggressively pushes the IMF to fully join the Greek bailout program before President-elect Trump takes office, putting the Greek bailout fully back on track and removing the lingering question mark about the IMF’s role. In any event, there is hope this matter would be resolved before the end of 2016.
More detail on the visit and “Legacy Speech”
The White House has now confirmed plans leaked much earlier for a so-called “Legacy Speech” scheduled across from the Acropolis on November 16th. That means there will be an overnight Athens stay in the program, and a huge increase in security is now expected, with hundreds of extra Greek police and U.S. Secret Service protective personnel ordered up. We still do not know what else the President will be doing in Athens, but after a “Legacy Speech” what else is needed? The security atmosphere is now slightly tenser that before the trip was announced thanks to a nuisance raid (no damage) close to the U.S. Consulate General in Thessaloniki on November 8 and a bombing at the French Embassy in Athens November 10th.