As mainstream parties unite behind the rescue deal, opposition becomes the preserve of the fringe.

 By Joseph C. Sternberg, Wall Street Journal

In August, recall, those creditors extended Athens another €86 billion ($96.97 billion) in bailout funds, tied to demands for reforms no one seriously expected Greece to deliver. The real game was to buy voters a few more years to reconcile themselves to the strictures that euro membership places on their politics.

Sure enough, this latest campaign has revolved around the major parties’ promises to keep Greece in the common currency by implementing the bailout deal more or less in its entirety. The traumas of this year—acrimonious negotiations with creditors, capital controls, very nearly plunging headlong out of the euro—seem to have triggered a realignment of Greek politics that would cheer Germany’s Chancellor Angela Merkel and other eurozone leaders.

To start, the radical left-wing party Syriza, whose election victory in January sparked this mess, is revamping itself. Its leader, Alexis Tsipras, has purged the party of its most radical leftists. That group, roughly one-third of Syriza’s members of parliament, have formed their own Popular Unity party. It’s more honestly anti-euro than Syriza ever was, and as a result its support is sinking fast. It may not win a single seat.

The remaining new-look Syriza is now trying to position itself as a more respectable party of the left, pledged to abide by the deal Mr. Tsipras struck. Syriza could do so with a surprisingly revived Pasok, the old socialist party that was badly discredited as the ruling party that signed Greece’s first two bailouts, in 2010 and 2012. Under its new leader, Fofi Gennimata, Pasok is polling between 5% and 6%, compared to the 4.7% it won in January. Mr. Tsipras has signaled he would be open to a coalition with Pasok. A socialist old guard with governing experience could help temper Mr. Tsipras’s more radical urges.

Another development creditors can cheer is that Greece has a center-right again. The New Democracy party is back, after looking like a spent force when it was voted out of office in the January election. Its hapless former leader, Antonis Samaras, stepped down this summer, and most observers assumed the party would need a longer spell to stage a comeback.

Instead, it has pulled nearly even with Syriza in most polls, at around 25% support each, under a caretaker leader who never expected to become prime minister. Evangelos Meimarakis, a former speaker of parliament, is an old-style politician with a reputation for evenhandedness and a penchant for earthy slang on the campaign trail. He scores Mr. Tsipras for incompetence and promises to be a more reliable executor of the bailout. New Democracy might be able to form a government, perhaps in coalition with the small Potami party of free-market liberals and social democrats.

It looks an awful lot like Mrs. Merkel’s dream of a Greek election: Both major parties promising to implement (most of) August’s bailout deal, with the voters going along.

Yet this success could come at a high cost, as other trends in this campaign warn. The problem is that thanks to the bailout’s laundry list of specific and largely inflexible conditions, the major fault-line in Greek politics now isn’t over how best to transform Greece into a competitive modern economy, but over whether to stay in the euro at all. The effect is to empower the fringe.

That helps explain why the neo-Nazi Golden Dawn party’s support has grown. The party is now garnering around 7% compared to the 6.3% it won in January’s election, and it typically outperforms its poll numbers. With creditors having neutered Syriza, Golden Dawn is the only major opposition party left to truly oppose anything. If it comes in third, it will be the largest party in Parliament standing against the Syriza-New Democracy-Pasok-Potami consensus.

On the other side, the danger is that such a strict bailout will stifle debate about bigger and better supply-side reforms. The bailout agreement is deeply flawed, relying heavily on growth-killing tax increases. Policy reforms and privatizations, as bold as they sound, are limited to whatever Syriza’s leftists and social-democratic European politicians could agree on.

Mr. Meimarakis and some elements in New Democracy, and most of Potami, understand this. Mr. Meimarakis has argued belatedly that Greece needs to exceed the reform targets to return to growth. Options could include more aggressive privatizations, liberalization of education or product markets omitted from the deal, or the like. But large swathes of his party remain unconvinced, and it’s hard to see how the public can be brought along when their main experience of “reform” will soon be the crushing tax increases mandated by the bailout.

This sets up an odd asymmetry. Any Greek reformers who want to oppose the government by offering a different pro-euro, supply-side program that would trade more thorough liberalization in exchange for leeway to implement a pro-growth tax cut will require creditors’ permission. They may not get it. Meanwhile, Golden Dawn, the Greek Communist Party and others don’t need anyone’s permission at all to keep opposing the euro.

After five years of Greek failures to reform, creditors had every reason not to trust Athens when crafting August’s deal, which is why it’s so inflexible. The idea was that rather than risk a Europe-wide crisis by allowing Greece to leave the euro, creditors would tell Athens exactly what to do. And perhaps this election vindicates the theory that Greeks will do the right thing if given no alternative.

But voters generally prefer competitive politics, and Greece has already seen one protest movement—Syriza—emerge against a coalition between the old parties of the right and left in service of bailout agreements. Mrs. Merkel and other northern Europeans now have to hope either that Greeks are too beaten down to care about politics anymore, or that some form of reasonable competition will arise before the unreasonable competition gains more ground.