Alexis Tsipras took the oath of office for a second term as Greek prime minister on Monday, promising to revive the crippled economy while demanding debt relief from creditors as his "first big battle" following an unexpectedly clear election victory.
The firebrand leftist solidified his position as Greece's dominant political figure in Sunday's election, but faces a dauntingly long "to do" list that includes implementing austerity polices and dealing with migrants landing on Greek shores.
Voters gave Tsipras and his Syriza party the benefit of the doubt over a dramatic summer U-turn, when he ditched his anti-austerity platform to secure a new bailout and avert 'Grexit', a Greek exit from the euro zone.
His first comments upon taking the oath of office were not about his country's economic woes but about Europe's migration crisis, the worst on the continent since the Balkan wars of the 1990s.
Greece has been the main point of entry for tens of thousands of migrants who arrive on its shores by sea and mostly continue onwards over land across the Balkan peninsula to richer EU countries further north.
It complains that it lacks the capacity to enforce EU rules which would require it to register all arrivals and has sought more help from the bloc.
Tsipras will represent Greece at an emergency summit of European leaders to discuss the migration crisis on Wednesday. It is one of three countries, alongside Italy and Hungary, that would receive help from the rest of the EU resettling 160,000 refugees under a plan backed by Brussels and Germany but opposed by eastern European countries.
"Europe has unfortunately not taken steps to protect reception countries from a (migration) wave which has taken on uncontrolled dimensions," Tsipras said.
WORK FAST
With the first review of Greece's 86 billion euro bailout programme due next month, Tsipras must work fast to recapitalise Greek banks and stave off recession. He received a raft of congratulatory messages from European leaders urging him to move swiftly on reforms.
A Syriza party official said his first domestic goal would be to stabilise banks and the wider economy, still reeling from three weeks when banks were shut before Tsipras accepted the bailout.
Tsipras had described as his "first crucial battle" the quest for debt relief from the creditors, the official added. Tsipras says Greece's economy cannot recover from one of the worst depressions to hit an industrialised country in modern times unless the burden of servicing its debt is eased.
Some European governments, particularly Germany, are opposed to writing off part of Greece's debt but less averse to stretching out its repayment schedule.
Euro zone officials told Reuters last week that governments were ready to cap Greece's annual debt-servicing costs at 15 percent of its economic output over the long term, so that nominal payments would be lower if the Greek economy struggles.
JP Morgan analyst Malcolm Barr said some form of restructuring of Greece's euro zone debt should be in place by the end of March.
FREEDOM
Tsipras called Sunday's election to seek a new mandate after his party split a month ago, with rebels denouncing him for accepting the bailout.
With a better result than forecast in opinion polls, he can now form a government with only one small coalition partner, giving him more freedom to set policy than with a wider coalition.
He has promised to implement tax increases, spending cuts and market reforms mandated by creditors under the bailout, but his party says there is still enough flexibility for measures to cushion the impact on the most vulnerable Greeks.
Its election manifesto refers to "grey areas" in which details can still be adjusted, such as labour reforms - important in a still heavily unionised country - pension cuts, and plans to tackle non-performing loans.
Creditors say that if Greece seeks to adjust the terms by easing austerity in one area it must tighten somewhere else.
Tsipras says his victory gives him a mandate for a full four-year term, extraordinary in a country that has gone through five general elections in six years.
"This is a major personal triumph for Tsipras," said political commentator Aristides Hatzis. "His political hegemony is (now) unprecedented."
But some analysts said creditors would have preferred Tsipras were restrained by a broader coalition, and that his strong position keeps alive the threat of future quarrels with the creditors - and even Grexit. Consultancy Eurasia Group set the risk of a Grexit within two years at 30 percent.
The big victory makes it easier for Tsipras to reinstate trusted members of the cabinet that served during the often turbulent seven-month coalition he formed after his first election win in January.
Euclid Tsakalotos, who brokered the bailout accord after succeeding anti-austerity hard-liner Yanis Varoufakis as finance minister, was "most likely" to be reappointed to the same post, a Syriza source said on Monday. However, other sources suggested this was not certain.
In a financial market that looked to have factored in a Syriza win, Greek shares lost ground on Monday and government bond yields edged higher, mirroring a generally cautious reaction elsewhere to Tsipras's return.
Reuters
Tue Sep 22 2015
The firebrand leftist solidified his position as Greece's dominant political figure in Sunday's election. - AP Photo/Lefteris Pitarakis
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