Tsipras Playing Political Poker Amid Mass Demo

As thousands took to the streets in protest at the public sector cutbacks, increases in taxes and massive reforms of its state pension system, Thursday's mass protest is the first mass strike facing Tsipras' government. 

Tsipras came to power on an anti-austerity pledge, promising to lift some of the harsh conditions imposed on the country by its creditors, the European Central Bank (ECB), the International Monetary Fund (IMF) and the other Eurozone states — known as the 'Troika' — following the sovereign debt crisis. 

Having attempted renegotiations, Tsipras put it to a referendum at which the Greeks rejected the harsh conditions proposed by the Troika. However, under huge pressure to recapitalize the Greek banks and faced with an ultimatum, Tsipras performed a U-turn and accepted the proposals, causing a split in his Syriza party.

Tsipras then called a snap election, to restore his authority over Syriza, in which his party took first place, but failed to win an outright majority, so he went into coalition with the Independent Greeks. However, the pain of the austerity measures imposed by the Troika is biting very hard and tranches of bailout payments to Athens keep stalling over its failure to implement reforms fast enough for the creditors.

Bailout Payments Delayed

Sources close to the continuing bailout talks says that Athens has approved just 14 of the 48 "milestone" reforms demanded by creditors in return for what is the country's third international bailout, worth US$95 billion and that its creditors are delayed the latest in a tranche of bailout payments. The next tranche — US$3 billion — has been held back this week until the Greek Government can meet the next set of targets.

The major issue with the Greek banks is the inability of many homeowners to pay off their loans, with an estimated 320,000 people in arrears and facing eviction.

Greece must recapitalize its banks by the end of this year ahead of a new European guideline which allows savings deposits of more than US$110 to be seized to rescue financial institutions if no other means is found, which would force many small and medium-sized companies into bankruptcy.

Tsipras is calculating that he has agreed to the reforms of taxation and pensions, as well as deep cuts in public spending, in the quest of early debt relief — writing off a proportion of its debt — at the earliest opportunity.