Europe's center, rattled by Syriza, wonders which way to jump
By Paul Taylor LONDON (Reuters) - European politicians at opposite ends of the spectrum celebrated the election victory of Greece's anti-austerity Syriza party on Monday, but Alexis Tsipras' post-communist triumph is forcing mainstream leftists to reconsider their position. Tsipras has promised to reverse five years of "humiliation and suffering" caused by spending cuts, the price of a 240-billion-euro bailout from international creditors. His movement, now building a coalition with the right-wing Independent Greeks, will reject fiscal austerity and demand the country's foreign debt be partially written off. That pledge poses a dilemma for mainstream social democratic parties that signed up to policies of fiscal discipline during the euro zone debt crisis. They will now be assessing whether to veer further left and try to surf the public anger that carried Syriza to power. The alternative of sticking to fiscally orthodox policies carries a risk of being swept away by insurgent populist parties reacting to high unemployment and falling living standards. "This is a slap at what I see as very right-wing economic policy in Europe," Finnish Foreign Minister Erkki Tuomioja, a Social Democrat, said of the result to Helsingin Sanomat newspaper. Greece's traditional center party Pasok, which helped implement the country's bailout program -- the biggest in history -- was decimated. A new center grouping failed even to enter parliament. The result may boost the likes of Spain's young utopian far-left Podemos (Yes we can) party, born out of anticapitalist street protests by the young unemployed and currently leading both mainstream parties in opinion polls, as well as Ireland's anti-establishment Sinn Fein. "In Greece there was fear-mongering, and despite that (people) have voted for change," Pablo Iglesias, leader of one-year-old Podemos, declared in a television interview. That same choice will play out in elections in Portugal, Spain, Denmark, Finland, Ireland and Britain this year. It will also affect the balance of power on European Union economic policy, potentially forcing Germany to soften its insistence on budget discipline ahead of stimulating demand. NEW ALLY? Yet Syriza itself faces a reality check on its promises to raise wages and pensions and keep the country in the euro while simultaneously making Greece's creditors forgive some debt. While EU partners are prepared to negotiate with him, Tsipras can expect little more than extra time to repay the debt and perhaps an interest payment holiday, and that only provided he sticks to reform commitments his conservative predecessor made to the EU and IMF. He will be supported however by governing center parties in France and Italy that are currently easing off on budget restraint and embraced Syriza as a new ally in efforts to convince Berlin to put growth before austerity. Socialist French President Francois Hollande was among the first to congratulate Tsipras, pledging close cooperation "in service of growth and the stability of the euro zone, in a spirit of progress, solidarity and responsibility that is at the heart of the European values we share". Yet the loudest rejoicing in Paris came from the fiercest critics of Hollande's tepid pro-business economic reform efforts on the hard left and far right. "I am delighted at this massive democratic blow the Greek people have delivered to the European Union," far-right National Front leader Marine Le Pen said. "This is the moment euro-austerity and the constraints imposed to save the euro go on trial." Leftist firebrand Jean-Luc Melenchon, who ran against Hollande for the presidency with Communist backing in 2012, called it "an exhilarating day, the history of Europe is in the process of changing dramatically". Marc Lazar, a historian of the European left at Sciences-Po university in Paris, said Syriza offered a seductive new model for French Socialists who were "self-hating reformers" made anxious by seeing the working-class electorate flock to Le Pen. In Italy, where Socialist Prime Minister Matteo Renzi is trying to push through liberalizing labor market reforms against resistance from trade unions and the left, Foreign Minister Paolo Gentiloni depicted Syriza's win as supportive. "For months now, there has been a tug-of-war between austerity and flexibility," he told RAI 3 public television. "There is no doubt that the Greek result, if politically managed by Greece and the EU with realistic and flexible negotiations, is in line with the questions that we Italians have been posing about getting out of rigidity." Italy's radical left is small and splintered. But Nichi Vendola, leader of the small leftist SEL party, said: "Tsipras's victory buries all the old cliches about the left that can only say 'no' to everything and can never win." But Citi analysts Tina Nelson and Ebrahim Rahbari took a different view from those predicting a broader upheaval in Europe's landscape. "Many aspects of the Greek situation are unique and we expect the direct implications on other Eurozone countries to be limited in the near term...," they said. "In our view, Greece is the only EU country this year that is likely to see a non-mainstream party emerge as the majority party." (Additional reporting from Gavin Jones in Rome, Sarah White and Paul Day in Madrid, Brian Love and Alexandria Sage in Paris, Jussi Rosendahl in Helsinki; Writing by Paul Taylor; Editing by Sophie Walker)
