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Back in power after its humiliating bailout deal, Syriza is actually in a better position than ever to get the Greek economy back on back.

By Allie Renison*

The re-elected Syriza-led government in Greece faces some unenviable choices about the balance between principle and pragmatism. The scale of its challenge in rebuilding the chaotic Greek economy is monumental, but not insurmountable. In fact, the former infants terrible of Europe arguably now have a much better opportunity to secure credibility and legitimacy – a mean feat indeed for a party which spent little if any of its first go at government actually governing.

One of the biggest factors undermining the Greek economy – both domestically and in terms of inward investment – has been the political uncertainty arising out of relations with its international creditors. Since Greece entered its first bailout, the prospect of government collapse has never felt far away, and the explosive rise of Syriza during this period meant the bailout agreements and reform program perennially felt tenuous at best.

But the protracted debate over “imposed” austerity has been settled with a new bailout agreement. Alexis Tsipras has exorcised from his party – and crucially from parliament – the most ideologically intransigent, hardline rump of Syriza. An electorate weary from going to vote for the third time in eight months, desperate for stability but far from ready to trust in the establishment parties linked in the minds of many to crisis and corruption, has given the amateurs another chance.

Meanwhile, Syriza’s main opposition, New Democracy, is weakened, its former leader having stepped down after the referendum. Tsipras now has a mandate to govern, and the international community should give him the support to do so in good faith. It is in Europe’s own interest that Greece’s politics remain stable and economy will recover.

This is of course a two-way street, and Syriza have their own mountains to climb in rebuilding trust with Greece’s European partners (many of whom have been characterized by its leadership as foes, villains and blackmailers). Making debt relief a primary attacking point and totemic issue would be a catastrophic mistake – it is something which needs to be discussed at a secondary level, although Europe and her institutions should be wise enough not to dismiss it as a non-issue.

Syriza must now focus on implementing and, crucially, owning a structural reform program it previously disavowed. Greece desperately needs a positive message coming from government on rebuilding the economy. Fortunately, Tsipras’ ability to pull victory from the jaws of ostensible defeat means he is capable of delivering on both of these objectives. The messaging will be as important as, if not more important than, the substance of his agenda.

Converting an ideologue to pragmatism is difficult, but there are ways to do it. Recalibrating Syriza’s conception of business is possible through Greece’s burgeoning start-up community, which is trying to develop an ecosystem that is economically independent of the vested interests and corruption plaguing other sectors. Entrepreneurialism of course reflects an aggressive model of capitalism whereby new firms thrive by attracting investors of which Syriza has traditionally been wary, hence the need for its leadership to listen and understand as much as lead.

Large-scale investment and privatization need not be a red line either. It will give the government with a way to reduce its debt levels without having to resort to further harsh spending cuts or unpopular tax rises. It is not about a cheap fire sale of precious state assets, but rather allowing for capacity and quality upgrades in ports and airports that the entire Greek population know, are crucial to sustaining its vital tourism industry.

The aftermath of the Arab Spring is putting Greece back at the top of holidaymakers’ destination lists, a trend that should fully leveraged. The capacity for renewable energy development in Greece is significant, and a highly skilled workforce in technology software, with operating and labor costs giving the country a competitive edge over London and Berlin, should give Tsipras plenty of material to construct a positive narrative.

Most importantly, political stability finally feels here to stay, although the initial bite of structural reforms may provide some temporary turbulence. But it is clear to anyone visiting Athens that the public – having had a taste of the chaos which Grexit might bring – has opted for the devil they know instead. No one wants another election. Instead they appear willing to accept some short-term discomfort as long as longer-term stability is in sight.

That is where Mr Tsipras and Syriza must step in to show they have a credible and pragmatic plan – as well as message – to bring the country closer to the light at the end of the tunnel. Greece deserves positivity and optimism. Its government and international partners are finally in a position to move towards that again.

*Allie Renison is the Head of Europe and Trade Policy for the Institute of Directors.

source - "The Telegraph"