Friday, 19 January 2007

Avoiding a chain over-reaction

IN THE rocket-propelled grenade attack on the US embassy, familiar errors are discernible on both the Greek and the US sides. US Ambassador Charles Ries refrained from calling it a terrorist attack when he met with journalists on the asphalt of Vassilissis Sofias Avenue just hours after the attack. But in an interview on state television a few days later that position had changed. Ries termed it a "serious terrorist attack" that had diminished Greece in the eyes of the world.

As the Greeks have long maintained, there is a great qualitative difference between home-made bombs consisting of pressurised gas canisters strapped together and set off in the early hours to make a statement without hurting anyone, and a car bomb or an ambush by militia. But to State Department analysis, these are all points on a sliding scale.

Both sides have a point, but to use the T-word more than five years after George W Bush started using it is to dignify a small group of people trying to make a patriotic name for themselves by targeting the most powerful embassy in Athens. The US is not about to go to war over Greek terrorism, nor is the latter in any way that we know of connected to the jihadists and other madmen of the Middle East and Central Asia.

The Greeks are also persisting in old errors. Hitting the US embassy two years after November 17 was put behind bars returns Greece to an age of adolescence. We have no reason in the world to offend Americans, who are essentially benevolent towards us.

Most likely, the Greek terrorists are sprouting from that same trunk of Leftism that hates the US for saving Greece from the clutches of communism, and has lost faith in a political system that globally is dominated by a single superpower and domestically by two parties, Pasok and New Democracy, in which the KKE and Synaspismos need never be heeded.

Yet the best response to this symbolic terrorism, however insulting it may be, is to accord it its proper place, not to elevate it in public, and that is a question of chosen style. When November 17 carried out an identical rocket-propelled grenade attack against then German ambassador Karl Heinz Kuhna in early 1999, he quickly defeated whatever psychological impact the attack could have had. Waving a cigarette as he met journalists on the street outside his stricken home, he asked the terrorists not to disturb his neighbours in future, and criticised them for being "not very good shots".

British ambassador David Madden was quieter about it, but he, too, defied the terrorists after Al Qa'ida bombed the British consulate in Istanbul in November 2003, killing the consul. He continued to travel frequently on foot, and kept a Saturday morning tennis appointment at the British School gardens with his wife, Penelope, with absolute regularity.

Charles Ries, too, showed that he is not afraid of the terrorists. He came out of the embassy to meet with journalists no fewer than three times on the morning of the attack; and he kept a scheduled lunch appointment with this newspaper just hours later.

But the new line coming out of the State Department, whether it is American-inspired or requested by the Greeks as a way of strengthening their hand, is a mistake. It is one thing to work closely with the Greeks to ensure that they are taking terrorism seriously, and another to sound as though the country as a whole is at fault. Worrisome as the latest attack is, it should not put domestic terrorism back in the centre of the Greek-American relationship.

Friday, 5 January 2007

A Make-or-Break Year for Reform

Most Greeks don't think 2006 was a year of improvement for the country, and only a third of them expects 2007 to be. That is the broad conclusion of three public opinion polls taken during December and published on the last day of the year.

A reformist government ought to find these gloomy results encouraging. Greeks typically think of the coming year with trepidation. The pessimism over 2007 should be taken with a pinch of salt because through the gloom some figures sparkle. Although two thirds of Greeks appear to oppose the privatisation of OTE, by and large people support privatisation when it is put to them as a broader movement.

That suggests that the name of the public telecom has, through the inevitable game of political soccer, become highly emotional - perhaps in the same way as Olympic - but that the battle for hearts and minds is not unwinnable.

Despite the merciless battering dealt to the idea by the Left, a majority polls in favour of non-state controlled universities. That leaves the 59 percent who said yes to the idea last January essentially unscathed by eight months of political strife. Just to drive the message home, only three percent of people polled by Kapa Research thought 2006 was a good year for Alekos Alavanos, leader of the Left Coalition, which was the protagonist in opposing education reform; and only 2.2 percent of respondents thought he should be prime minister from among the party leaders.

Education reform was the government's greatest failure in 2006 and full privatisation of OTE is probably its biggest gamble in 2007. Both have drawn the opposition's heaviest fire. That public opinion still gives the government this much credit is a victory and leaves it no excuse to postpone reform for another year.

Historically Greeks have championed labour over capital and sought the hand of the state in almost every area of life. Yet creeping favour for the private sector now seems inexorable: 55 percent of those questioned named it as the key to improvement of the economy, while only a quarter thought the public sector was the key.

Even though the state directly or indirectly still controls just under half of the economy, people seem to have understood that in the long term this godfatherhood is ending. The conservative and heavily statist society that is Greece may have begun to turn a corner.

Waning public sector support also appears elsewhere. Sixty percent of those questioned told one poll that they support abolition of tenure in the public sector, a government proposal.

A vote of confidence in the government comes in the overwhelming opposition to early election. Even if Greeks aren't thrilled with the economy under New Democracy, they blame past Pasok governments for their woes more than this one (35 percent versus 19 percent, according to Kapa Research).

Greeks seem ready for less representation and more direct democracy - an area where socialist leader George Papandreou has traditionally made bolder proposals than Prime Minister Costas Karamanlis. Eighty percent declare themselves in favour of a directly elected president and 70% in favour of referenda they could initiate through signatures - both Papandreou proposals. Seven in ten even think the number of MPs chould be reduced by a third.

The economy is always paramount. At the end of 2005, as now, Greeks' main concern was their purchasing power and their ability to find a decent job.
Interviewees list the economy and unemployment as two of the three areas they would like the government to prioritise most this year.

Greeks told one survey that a decent wage is about 1,500 euros, presumably take-home pay, when the average pre-tax wage for 2005 stood at 13,749 euros according to finance ministry tax data.

That means the government has a long way to go - about 400 euros cash-in-hand - to convince Greeks that they are winners in a reforming economy.

Some progress is being made. Non-taxable income rose by 1,000 euros on January 1, meaning an automatic raise for salaried workers and pensioners. Unemployment has fallen to 8.3 percent for the third quarter of 2006. And the government is making good on electoral promises to raise unemployment benefits and additions to low-end pensions.

Inflation could threaten all those gains, however, forecast at above three percent for the year compared to 2.1 percent in the eurozone. 

At the end of the day the course of the economy will be determined by the government's success in liberalising it and shrinking the public share of it, while maintaining decent minimum wages and improving health and education. The main obstacles in its way are a small number of unionists with ties to political parties, and its own timidity.

If it fails to push reform for a second year in a row, New Democracy may still win early elections expected in the autumn but could quickly fall into the paralysis that plagued the Simitis government from 2001 to 2004. If it succeeds, both labour and capital, those eternal foes that are completely necessary to each other, could begin to be openly happy by next December's poll.

Kapa Research Telephone interviews with 1,803 adults nationwide, 18-21 December 2006. Published in Sunday Vima on 31 December 2006.

VPRC Telephone interviews with 599 adults nationwide, 22-23 December 2006. Published in Sunday Kathimerini on 31 December 2006.

Metron Analysis Telephone interviews with 801 adults nationwide, 20-23 December 2006. Published in Proto Thema on 31 December 2006.