(Bloomberg) -- Consider what Greek Prime Minister Alexis Tsipras is up against.
As Greece prepares to free itself from an eight-year European bailout, its 43 year-old premier is confronting challenges at home and abroad. On the domestic front: preparations for post-bailout economic life and the first general election since the end of the program, including feuds with both allies and rivals. On the foreign-policy front: increased tensions with traditional rival Turkey and regional instability stemming from a dispute over a neighboring country’s name.
Tsipras’s ability to navigate through all this could determine just how stable the country and its region will be in coming years, experts say, and the European Union, the U.S. and the North Atlantic Treaty Organization are all watching with interest.
“The worst problem for Tsipras, for the government, but also for Greece is the evolving ‘rogueness’ of Turkey,” said Aristides Hatzis, a professor of law and economics at the University of Athens. “Diminishing American influence on the region is a destabilizing factor and the stakes are very high,” Hatzis said, adding that Greece is not a primary concern for Turkey, but a part of an overall plan by President Recep Tayyip Erdogan to establish hegemony in the region.
Tensions between Greece and Turkey escalated in March after two Greek soldiers, who Greece says wandered across the border during a routine patrol, were arrested by Turkey. Greece has demanded their return. Leaders of other European countries have also condemned Turkey’s continued detention of EU citizens. Relations between Greece and Turkey, always fraught, worsened further after a Greek court declined to extradite eight Turkish soldiers allegedly involved in a military coup attempt in July 2016.
While “the possibility of deliberate escalation is relatively low,” there is increased concern of an accidental trigger event between the two countries, said Thanos Dokos, director-general of the Athens-based Hellenic Foundation for European and Foreign Policy. Greek and Turkish military ships and aircraft have always operated in close proximity, but the Turkish armed forces have been stripped of experienced officers following the 2016 coup attempt and shrinking U.S., EU and NATO influence over Ankara make outside mediation less certain in the event of an incident, he said.
Temperatures rose again on Monday when Turkish Prime Minister Binali Yildirim said the Coast Guard had removed a Greek flag raised on an uninhabited islet in the Aegean, and accused Greece of fueling tensions. Greek government spokesman Dimitris Tzanakopoulos said there had been no border violations and labeled Yildirim’s statement as “provocative.” Greece doesn’t believe in the “theory of gray zones in the Aegean,” Tzanakopoulos told reporters in Athens.
Greek resistance is also getting in the way of an initiative by the western powers to try and curtail Russian influence in the Balkans. Preliminary discussions on the Republic of Macedonia joining the EU or NATO have continually run into a roadblock thrown up by Athens, as Greece insists the name Macedonia should refer only to its own northern region, Alexander the Great’s stronghold in ancient times.
The Greek prime minister’s handling of the Turkey and Macedonia disputes has drawn criticism from both the opposition and some of his own allies. Defense Minister Panos Kammenos, who’s also leader of Tsipras’s coalition partner Independent Greeks, insists his party won’t agree to any deal that includes the word Macedonia.
Any wavering of internal support could put Tsipras’s thin parliamentary majority at risk ahead of national elections scheduled for next year, a grave concern at a moment when the main opposition party, New Democracy, is leading in the polls.
The political uncertainties coincide with questions on the economic front, as Greece sets to exit its bailout program in August. After eight years and three bailouts, Greece and its euro area and International Monetary Fund creditors will have to decide whether the country will need some sort of post-bailout program.
While Tsipras insists the completion of the country’s fourth and final bailout review before a scheduled euro area finance ministers meeting in July, combined with some form of debt relief, will allow for a “clean bailout exit,” critics are not so sure this will play well among the electorate.
“The government has made the big mistake of playing the ‘clean exit’ card too early, despite the lack of a plan for Greece’s economy in the post-bailout period,” said Wolfango Piccoli, co-president of consultants Teneo Intelligence in London.
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