Greece’s Odd-Couple Only Agrees About Ending Austerity

The two men disagree on just about everything, except this: for Greece, the time of German-dictated austerity must end.

Alexis Tsipras became prime minister of Greece on Monday by vowing to challenge the budget-cutting policies demanded by the European Union and International Monetary Fund in return for a 240 billion euro ($270 billion) rescue plan.

But his election win on Sunday, though emphatic, left the former communist short of a majority in parliament. To get one, he turned to the religiously inclined conservative party of Panos Kammenos. Their unlikely and potentially fragile coalition underscores how Greeks across the political spectrum have found a common cause after five years of austerity-fueled recession.

Tsipras and Kammenos, who took the post of defense minister, have both vowed to try to write down the country’s debt, over the objections of the European Central Bank and IMF.

On most other issues, from foreign affairs to social policy and civil liberties, the two parties are “chalk and cheese,” said Yanis Varoufakis, a Syriza lawmaker who was named finance minister.

‘Seasoned and Opportunistic’

Greek stocks and bonds tumbled on Tuesday before the cabinet was named. Alpha Bank SA fell as much as 20 percent, while the yield on three-year government bonds surged two percentage points to more than 14 percent.

Syriza won 149 seats in the 300-member parliament. Kammenos’s party, Independent Greeks, has 13 lawmakers. Their alliance is based firmly on shared opposition to spending cuts. Beyond that, the leaders’ backgrounds and views differ sharply.

Tsipras, 40, is a former member of the Communist Youth. Kammenos, 49, is a religious, conservative economist who, when discussing Greece’s German-led paymasters, has evoked his nation’s occupation by the Nazis.

The parties have diverging views on taxation, immigration and the role of the church, according to Wolfango Piccoli, managing director at Teneo Intelligence in London.

“It’s hard to see how this coalition of strange bedfellows can last long,” he said. “Kammenos is a seasoned and opportunistic politician who will not hesitate to leave the coalition whenever it suits him.”

Homeland Attacked

Kammenos formed his own group in parliament after being expelled from the New Democracy party by ex-Prime Minister Antonis Samaras for opposing the terms of Greece’s bailouts. Last week, Kammenos told party supporters that Europe is governed by “neo-Nazi Germans.”

The Syriza-led coalition replaces one led by Samaras since June 2012 that included New Democracy and Pasok, the two parties that have traditionally vied for power in Greece.

Kammenos, an economist by training and a father of five, has been a lawmaker since 1993, according to the parliament website. He served as deputy shipping minister between 2007 and 2009.

Kammenos called those who led Greece into the first bailout in May 2010 “traitors,” and said that as a result of the agreement, “our homeland was under attack.” He was expelled from New Democracy for opposing the interim government of Lucas Papademos, which arranged the world’s biggest debt restructuring and finalized a second rescue in return for more austerity measures.

‘German Protectorate’

In 2012, Kammenos announced the establishment of his party in the town of Distomo, the site of Nazi atrocities during World War II.

Tsipras, who has campaigned on a platform of writing down Greece’s debt, has been vocal about pursuing Germany for reparations. His first visit as prime minister on Monday was to Kaisariani in Athens, to pay tribute to victims of Nazi occupation.

Independent Greeks, whose lawmakers include former model Elena Kountoura, who was named deputy minister for tourism today, and television actor Pavlos Haikalis, made the demand that Germany pay reparations part of their election campaign in May and June 2012.

In October of the same year, during Chancellor Angela Merkel’s visit to Athens, the party called a protest outside the German Embassy, and tried to hand over a petition accusing Merkel of “transforming Greece into a German protectorate.”

There’s some ideological common ground between the parties, as shown by the past defection of some Independent Greeks lawmakers to join Syriza, said Jens Bastian, an economist and former member of the European Commission’s Greek task force. What’s more striking about their coalition is the speed with which it was formed, he said.

“What concerns me is that Tsipras did not prefer to talk to other potential coalition partners,” Bastian said. “Instead he chose to put a government together as soon as possible.”

Before it's here, it's on the Bloomberg Terminal.