Thursday, 3 December 2009

Antidoron: New Democracy under Samaras

Last Sunday, former culture minister Antonis Samaras won the New Democracy party leadership with a surprising majority against former foreign minister Dora Bakoyannis. His 50.2 percent of 770,000 ballots cast nationwide by anyone who cared to vote was especially stunning in view of the fact that until a month ago Bakoyannis, who reaped 39.5 percent, had been the presumed favourite. Samaras trounced her in some of the first opinion polls, but by last week the gap between them had narrowed beyond worthwhile scrutiny. Within a year, Samaras has gone from a seat in parliament to leader of the opposition.

Samaras' rises and falls have generally been precipitous. Konstantine Mitsotakis plucked him out of the parliamentary ranks at age 37 to be finance and then foreign minister in 1989. His disagreement with the government over the Macedonia issue forced him to resign that post barely 29 months later (though curiously, his curriculum vitae mistakenly gives February 1992, not April, as the end of his tenure).

He rocketed back into the limelight that year with a new party, Political Spring, touting social justice and an affinity to the common man. In October the following year Political Spring won a respectable ten seats on 4.88 percent of the vote. For a while it looked as though it might avoid the shooting star fate of breakaway parties, but then failed to win re-election three years later. Samaras spent the next eight years in political exile, as Konstantine Mitsotakis, whose government he had fatally undermined, did his best to ensure that he never got a job in New Democracy again.

As prime minister, Kostas Karamanlis, whose uncle founded the party, gradually began to rehabilitate Samaras. He secured him a place on ND's Europarliament ballot in 2004, and on the national ballot for his native Messinia three years later. Try as it might to ensure a smooth succession for former foreign minister Dora Bakoyannis, the Mitsotakis family was unable to prevent the appointment of Samaras to the cabinet in the January reshuffle this year. As far as the media were concerned, the two-horse race for the leadership was on.

Why did Samaras win, and why did Bakoyannis lose? A Public Issue poll taken last month found that a majority of Greeks felt Bakoyannis struck more of a leadership profile and came across better on television, but was dependent on special interests. Samaras, in contrast, came across as more genuine, a politician who was closer to the common man and who put people at their ease.

Many voters were put off by Bakoyannis' support for America's ill-considered missile defence shield in eastern Europe last year. Samaras, in contrast, has made his name on standing up for Greek interests, not kowtowing to the interests of powerful allies.

There is another issue here. Bakoyannis is a second-generation politician. New Democracy went down in flames under Karamanlis, who essentially inherited the party from his uncle. After the spectacular, ten-point election loss to Yiorgos Papandreou in October, conservatives evidently decided that renewal rather than royal succession conduced to survival.

The historic newspaper of the right, Estia, put it diplomatically in a front-page editorial on Monday: “This party is emerging from an unprecedented electoral defeat. The 33.5% result was a huge shock for New Democracy voters... It was to be expected that ND folk would turn towards the candidate who had not identified himself so much with five and a half years of government policy.”

Bakoyannis probably had little choice but to run as the continuity candidate. She spoke up noticeably against corruption in her party only once, in January 2008. The occasion was low key – a book presentation – and the remark - that the political profession was in crisis largely because ministers refuse to tell hard truths - more than warranted given a recent sex scandal at the culture ministry. Yet the media widely interpreted it as a lance in the ribs of then prime minister Kostas Karamanlis.

Before such highly tuned expectations there were no options for Bakoyannis between co-operation and outright rebellion. Rebellion is how Pasok's Kostas Simitis won the prime ministership in 1996, and how Samaras made his mark on political history in 1992. But rebellion sits next door to betrayal; Bakoyannis' father branded himself a traitor in 1965 when he agreed to form a government without his party leader. Bakoyannis evidently felt that one apostasy in the family was enough. Unfortunately for her, not only did the consensual approach fail; it also stifled much of her creativity during four years as foreign minister. Not wanting to bear the political cost of any foreign policy strategy, she instituted none.

How will Samaras' tenor as opposition leader affect foreign policy as Papandreou seeks to make a deal with Skopje and revivify the UN process on Cyprus? Observers will be nervously listening to his language on the Macedonian issue. Back in 1992 he rode a wave of nationalist fervour that helped scuttled Mitsotakis' moderate line in favour of Nova Macedonia, which Skopje was willing to accept. Seventeen years later, Greece has reverted to the same position (inserting Northern in place of New), while Skopje plays the nationalist card. Were the Makedonski leader, Nikola Gruevski, to agree to a composite name containing the M-word, it would be a disservice to both countries and to the EU for Samaras again to upset an agreement.

Samaras says he is sailing the party for a refit in its right-wing ideological drydock. Whatever that now means remains to be defined. He gave a hint in his first policy speech as leader to the Hellenic-American Chamber of Commerce on Tuesday. It was a call not to penalise private enterprise for the crisis, but to unburden it of the costs of an inefficient state, and lower its social security contributions and taxes. In calling for the state to take on the burden of cost-cutting and monitoring a fair market, Samaras has picked up the pulse of small and medium enterprise owners.

What will the return to conservative values mean socially? Samaras will surely bid to wrest back that 5.6 percent of his voters who've bled to LAOS. His most powerful ally, former health minister Dimitris Avramopoulos, is a social conservative who rejected the political centre as meaningless in an opinion/editorial on November 29. Specifics are pending.

But Samaras cannot win a general election without swing voters, and that means sailing his refitted ship back to the centre at some point. Party moderates like former education minister Aris Spiliotopoulos and former development minister Kostis Hatzidakis chose to back his rival. Together with Bakoyannis they are too big a group to ignore. Samaras says he will embrace the ND moderates, but what level of pluralism will he allow? Will he support a national line in foreign policy?

They are the big questions that remain. Newspaper editorials have been encouraging Samaras to strike a new tone of responsible opposition and to confer privately with Papandreou. After their first meeting on Monday, Samaras offered only one sly indication of his opposition style: that he would ride shotgun with the prime minister on some issues but hold up the stage wagon on others.

Thursday, 26 November 2009

Assertion and timidity: Foreign vs. economic policy

The socialist government has started its term with a daring foreign policy and a timid economic policy. On the one hand, Alternate Foreign Minister Dimitris Droutsas has grandly announced Strategy 2014, a revived plan to usher the Western Balkans into the European Union over the next five years, and carried out a whistlestop tour of the region. On the other, Greece is about to re-enter Excessive Deficit Procedure for the third time since it entered the eurozone in 2002 because it refuses to cut general government expenditure. Foreign policy is, in the long term, built on economic performance. One wonders for how long this dissonance is sustainable. What is Greece's power to persuade in Brussels, and what is its credibility with regional allies, when it literally cannot put its house in order?

Papandreou's foreign policy is actually cleverer than it sounds. Greece is using EU membership as a carrot to resolve differences with neighbours, much as it tried to use imminent Cypriot membership to achieve a political reunification of the island more than five years ago. So it is cunning and wise for Greece to take Balkan nations by the hand and say, as Droutsas did at his first press conference on October 22, “We want to be the locomotive for EU entry of all in the neighbourhood.” Translation: We want to make sure everyone enters the EU on the right terms with us. Fair enough. It is the prerogative of every member to veto prospective members, and having good terms with the incumbents is an official requirement. Greece is using the leverage that it has.

Papandreou has lost no time spelling out his terms. On his first official visit to Cyprus two weeks after the election, he told Turkey that if it didn't recognise Cyprus at least commercially, Greece's influence would be apparent when the European Council reports on Turkey's candidacy in December. He and Cypriot President Dimitris Christofias have co-ordinated their recommendations to Brussels, demonstrating unity and effectiveness.

Ten days later, Papandreou also spelled out Greece's red lines to Fyrom's prime minister, Nikola Gruevski, at a private meeting in Brussels. Greece will accept a name solution that qualifies the word Macedonia geographically and applies to all of Skopje's international and bilateral relationships. This is a pre-requisite to allowing Skopje's EU prospects to continue.

But what about the economy?

Papandreou's personal prestige as head of the Socialist International and brilliant past performance as foreign minister ensure a respectable reception in Brussels. This is not the case when it comes to economic policy. Our European partners are fed up with our statistical service lying to them and our incoming governments revising the budgets of their predecessors (the conservatives did it twice after 2005 and the socialists did it this year).

When Finance Minister Yiorgos Papakonstantinou first met with his eurozone colleagues on October 19, the experience was bruising. He revealed that the deficit this year would be not two percent of GDP as originally forecast, not 5.7 percent as revised by the finance ministry after the election, but 12.7 percent.

Eurogroup leader Jean-Claude Juncker said that Greece's revisions had to end or they would cause problems for the credibility of the entire group. “The game is over,” he said in irritation. Finance Commissioner Joaquin Almunia and European Central Bank Governor Jean-Claude Trichet echoed the sentiments. In statements, they have singled Greece out as the eurozone's worst consistent performer.

Papakonstantinou initially presented a budget that would cut the deficit to 9.6 percent of GDP in 2010, later pushing that to 9.1 percent. Our European partners are still unhappy. Their November 11 report explains why: “The budgetary policy by the Greek authorities did not comply with the Council's recommendations (permanent measures, mainly on the expenditure side) and seems insufficient to address Greece’s fiscal imbalances in a sustainable manner.”

The European Commission expects our debt to skyrocket from about 99 percent of GDP now to 135 percent in just two years, unless we take serious action now. It believes we are riding on windfall savings because state arrears to hospitals and the privatisation of Olympic Airways were chalked up to this year's budget. So were the costs of two elections. There is little in the way of permanent expense cuts, it says.

It is unhappy that Papakonstantinou has thrown the weight of budget balancing on income during a year when the economy will shrink by about 0.3 percent. He aims to raise 4.5 billion euros from higher income tax on the rich, on tobacco, on lucrative listed companies (a one-off measure), VAT and other indirect taxes. And the government's insistence on making good on its pre-election promise of giving state employees a 1.5 percent pay rise is, by the strictest standards, irresponsible.

What would make the European Commission happy? It reckons that failure to collect taxes and cost overruns unrelated to the financial crisis accout for half the deficit this year. Correct those two problems and you can theoretically reduce the deficit to six or seven percent next year, it implies. Papakonstantinou's refusal to commit to something so severe is perhaps understandable. Even Bank of Greece Governor Yiorgos Provopoulos, a whistleblower on the deficit, believes we should aim to reduce the deficit by five points over two years. The 2010 budget is consistent with that. But Provopoulos also agrees with the Commission that Papakonstantinou should save twice as much money as he raises. His failure to deliver a sharper cut in expenditures is a worrying sign that even on the stength of its landslide victory, this government is afraid to invest its political capital in painful measures while it can.

Papakonstantinou hopes that he has bought enough goodwill in Brussels by agreeing to start the dialogue on revising social security immediately (it began on November 26). But the General Confederation of Greek Workers (GSEE) has placed such strict preconditions on talks as to render them almost pointless. It will not discuss raising age limits or reducing pensions. So the only useful topics can realistically be financing methods and the revision of the arduous and unsanitary professions regime. GSEE also insists on the withdrawal of New Democracy's 2008 law, a Pasok promise. Brussels' goodwill will partly depend on the resulting social security bill, and you cannot please both Brussels and GSEE.

The world has noticed our failings. Last month, the credit rating agency, Fitch's, demoted Greece's government paper from A to A-, following the skyrocketing deficit and debt figures. A week later, Moody's said it, too, is reviewing Greece's A1 status. Provopoulos warned parliament on November 24 that as the European Central Bank draws to a close its line of cheap credit to eurozone governments and banks, Greece may find it increasingly expensive to borrow. Moreover, it could one day find its paper difficult to sell. The remarks caused uproar, and Provopoulos was accused of spreading panic. Such is the refusal, in some political quarters, to face facts.

Over the long term, the Greek battle is for greater competitiveness. Achieving that will create jobs, lower the public and private sector deficits, and even reduce corruption. In the short term, however, the Greek public sector has simply got to spend less money on itself and on those not terribly competitive bits of the private sector that have made much of their living from a single client. Are there enough people in parliament who believe this to allow it to happen? There certainly seem to be enough voters who do.

Thursday, 19 November 2009

November 17, 2009

November 17 marked the 36th anniversary of the night in 1973 when a colonels' junta violently suppressed an uprising at the Athens Polytechnic. The event is broadly credited with helping to restore parliamentary democracy the following year by dealing a fatal blow to the junta's authority.

Today's student generation still sees the Polytechnic as the iconic political event of postwar Greece, and longs to prove its ideals as indelibly. The slogans churned out this year spelled as much. For example:

Οι εξεγέρσεις δεν μπαίνουν στα μουσεία,
Εμπρός για της γενιάς μας τα Πολυτεχνεία.
(Uprisings don't belong in museums; onward to our generation's Polytechnics)

And the anarchically defiant:

Σ'αυτόν τον τόπο, σ'αυτήν την κοινωνία,
Οι εξεγέρσεις γίνονται, δεν είναι ουτοπία.
(In this place, in this society, uprisings are a fact, not a utopia).

Thursday, 12 November 2009

Reason versus the nation

Reason and the scientific method have taken a beating in recent years. George W Bush was famously against both, but at the grassroots level, too, on both sides of the Atlantic, there seems to be a groundswell towards mysticism, religion and nationalism, and away from the Enlightenment.

Institutions are left to fight for the values on which both the US and the EU were founded. On November 4 the European Court of Human Rights ruled that crucifixes had to be banned from Italian classrooms. The Vatican said it would fight the ruling.

Here is a debate that has troubled Greece again and again. On the one hand rationalism cannot be taken for granted - it has no church to represent and reinforce it. On the other, there are non-rational things which contribute to a people's sense of identity. Italy is not the only case of a European Union member with a default religious identity. Here in Greece it would be considered a form of national betrayal for the government to enforce a similar court ruling. The Orthodox church is still enshrined as the official faith in articles 1-3 of the constitution, and forms an inseparable part of the Greek sense of nationhood.

Monday, 2 November 2009

Turning a page: Lessons from print journalism

With Rupert Murdoch's new-found resolve to make internet browsers pay for content, the suffering news industry may finally begin to turn a corner back to profitability. For a number of years now the marketplace's proposition to newspapers has been untenable: “You pay for journalists to report the news and make as much money as you can from dwindling news stand and advertising sales; and we will choose to either buy newspapers or read them free online, and even steal their content to create virtual news stands.” 
Newspapers accepted the proposition because they had no choice. All the media were moving online from the mid-1990s onwards, and everyone had to fight for a share of the exposure even at a loss of traditional income. The reasoning was that online attention would multiply each medium's viewership or readership (the New York Times sells about a million copies a day, but has 20 million readers online) and a way would be found to make money from that traffic eventually. But traditional revenues have dried up faster than internet advertising has grown, and US newspapers this year began to shut down or lay off staff. The result is a dying industry and fewer original articles being researched and published, but a massive duplication of them on web sites around the world. 

Now newspapers are fighting back. If News Corp. successfully leads an industry-wide about-turn to do the unthinkable and charge for online content, newspapers may stop the decline in their revenues. 

Last June I stepped down as Editor-in-chief of the Athens News after a decade at the helm. It was an exhilarating time – not every editor enjoys complete editorial independence – but also a challenging time to run a paper. The Athens News' trials during this decade are a case study in what works and what doesn't work in turning a newspaper around; they also point the way to possible future solutions for that minority in mainstream media – newspapers and magazines – that still charges for content. 

When Christos Lambrakis offered me the job in 1999, the Athens News was known as a venerable 47-year-old beacon of free speech whose founder, Yannis Horn, had become the first newspaper publisher to suffer imprisonment under the colonels’ censorship law in 1972.  
Under the bombardment of imported titles, new English-language titles published in Greece and the internet, we decided that the Athens News’ best chances of survival were as a weekly. The transition was stormy. We had to continue to produce a daily while conceiving, designing and engendering the new product over a mere eight weeks. To achieve this we divided the newsroom into two teams, and ultimately succeeded in leaving a gap of just one day between the disappearance of the daily and the appearance of the weekly. 

Normally when a new product appears it thrives off the curiosity factor for a couple of issues before settling into its true circulation furrow. The weekly Athens News did precisely the opposite. Its first edition sold 4,331 copies in Athens and Peiraieus, its second 4,517, its third 4,862 and its fourth 4,947 – an average rise of 4.5 percent per edition. Sales across the country also rose in these weeks, signalling that we had overshot reader expectations. 
The market responded well enough during the first four years of the weekly Athens News that we turned our balance sheet around - from 670,000 euros in losses in 2001 to 74,000 euros in income in 2004. This came at a price, though. The payroll shrank to roughly half its original size of 45, and over the ensuing years would shrink further to about 16. 
We rose to the challenge of the Olympics in our break-even year by creating a Special Daily Edition for the two weeks of the Games. The trick of going from a weekly to a daily for a brief period was to avoid a massive outlay in extra staff so as to keep the enterprise profitable. Just before the Games we did hire half a dozen temporary writers and copy editors to boost the time-sensitive front of the book. But the key to success was that we built up the back of the book months in advance by commissioning and pre-paginating feature material. This necessitated no extra hires. Together with permanent fixtures such as maps, travel advice to tourists, plus two pages with the latest results and the next day's programme, we were able to flesh out a 40-page daily that became highly popular with visiting journalists and readers alike. A limited bound edition of these newspapers sold out within a few days after the Games. 
The challenge to the Athens News after 2004 was to reverse its declining news stand sales. In the years 2001-2007 we suffered an average annual drop of 5.4 percent. Though devastating to a small newspaper, this was less than half the average circulation losses taken by major Greek national dailies and a testament to our readers' loyalty. 
We settled on a dual strategy. One effort was aimed at generating a new revenue stream through books based on Athens News talent. They were relatively cheap to produce because the material had already been paid for and edited; they cost nothing to advertise because they were being published by the advertising vehicle itself; and productive columnists were happy to be turned into authors with a royalty into the bargain. The 17 titles we published over the decade were, in total, a success, becoming about five percent of the newspaper’s turnover of just over a million euros. 
The second - and more important - prong of the turnaround strategy was to focus on new forms of distribution. While we kept honing content (a task that never ends), we felt that means of delivery was the real problem for print journalism. News stand sales still generated about sixty percent of the Athens News’ revenue in 2008, but we came to see this form of distribution as shrinking irreversibly because of new technologies such as the internet and mobile telephony. The classic print distribution model simply will not occupy the market share it once did. 
When it comes to niche markets such as that of an English-language newspaper in a non-English speaking country, the decline in sales is even more ominous. Publications with sales of under about 20,000 copies in Greece must print far more than the legal limit of sales-plus-20-percent to cover the nation’s approximately 14,000 sales points. Below print-runs of about 25,000, therefore, one has to distribute selectively. That is a fraught process. Newspaper distribution is a closed profession that cannot be challenged through open competition in the key markets of Athens and Thessaloniki, where about 70 percent of the population lives. Newspaper distributors therefore tend to be less than zealous about accommodating publishers' requests. 
Our response was to shift our focus at the end of 2006 to subscriptions and the internet. Two thirds of Athens News readers are in the greater Athens area, where competitive courier services are readily available. Print readers who buy from a news stand or periptero currently pay between 37 and 50 percent of the cover price to the distributor, whereas courier services, which are openly competitive, would give us quotations as low as 20 percent of the cover price. We decided to shift the benefit to our readers, offering a subscription package with a discount of up to 30 percent, home delivery and annual incentive gifts. That also allowed the newspaper the perquisite of coming into a direct relationship with a growing proportion of its customers, which entails enormous marketing and quality-of-service advantages over an unaccountable distribution system. 
An early vindication of this strategy was that in 2007, the first full year of the new emphasis on subscriptions, the Athens News made a modest one percent gain in revenue from sales solely thanks to a 31 percent gain in subscription revenue and despite a decline in revenue from street sales. It was the first year in which the weekly newspaper increased its sales revenue without a rise in cover price. 
Adjustments in paper distribution notwithstanding, it is clear that the internet is the tool of the future for newspapers. The Athens News was the first Greek newspaper to establish a site in 1995, and we rebuilt it twice, in 2001 and in 2009. The site consistently enjoyed 20,000 unique visitors a month, 83 percent of them from overseas and half of those from the US. 
Starting on that basis, we set out three years ago to electronically scan every newspaper published since 1952 using optical character recognition software. This creates word-sensitive archives and enables users to search the database. Had we succeeded, we would have created a searchable archive of over a million articles – easily Greece's biggest online news database in English. The plan was to add such value to the site through this and other standing databases that it would become possible to create a paid subscription to the website with services beyond those available to the free visitor. 
The task proved larger than we could ultimately bring to pass. In September 2008 the Lambrakis Press decided the close the newspaper with the scanning job only half done. We were forced to focus on the more germane task of finding a new owner to avoid closure. This was a battle the entire staff took a part in, and the newspaper survived largely thanks to an overwhelming response from its true owners – the people who read it. 
Hundreds of letters that poured into our office during those days told us why we had survived. Our readers appreciated our independent reporting and insightful analysis. Two things made that independence possible: the fact that our publisher, Christos Lambrakis, had allowed us to exercise an aloof, Western style of reporting that separates news-gathering priorities from political and commercial ones; and the fact that the newsroom was comprised almost exclusively of bilingual, bi-cultural Greeks who combined a love of Greece with a native grasp of English. 
But for all these years the Athens News stood out for another reason. In a country with the slenderest of traditions in unmanipulated journalism, it had an understanding of journalistic integrity and the need to strive for an objective viewpoint. To the extent that it had an ideological bias, this was a natural bent towards liberalism – an inevitable leaning in a newspaper that addresses itself to bi-cultural Greeks and expatriates interested in what goes on under Greece's skin. We developed strong beats in the areas of greatest social change: education, immigration and the environment. The newspaper developed strong reporting on these topics rivalling - and in some instances exceeding - the accuracy and timeliness of much larger media organisations. 
We focused on attempts at reform in the disappointing second term of Kostas Simitis and, after 2004, the transition to conservative rule after 23 years of almost continuous socialist government. And we built community, believing that a newspaper is at its healthiest when strengthening its readers even as it draws strength from them. 
What we tried to do for a decade was to provide encouragement and self-awareness to that section of Greek society that holds the key to its future – those who believe that Greece can take its place among competitive societies without losing its traditions or its identity. In a sense, we were trying to create for our children the Greek society we expected to find when we repatriated. Our editorial emphasis for greater accountability, transparency and meritocracy followed naturally. We supported economic liberalisation, greater competitiveness, smaller government and paying off the national debt, which mortgages future generations. In short, we strived to be a voice of reason and an indispensable component of a Greece that is yet to come. 
What worked for the Athens News can be summed up as follows:
  • Lowering overheads: Newspaper publishing is a highly leveraged business. It involves enormous up-front expenses in printing plant, distribution networks, adequate newsroom staffing, contact-building and marketing. We managed to lower payroll expenses, which were under our jurisdiction, but not shared corporate overheads for services such as legal and accounting, which were beyond our control.

  • Creating new revenue streams: Large-circulation weekly papers are now in the business of selling magazines, CDs and DVDs with news as an added virtue; hence the practice of obscuring the front page titles with the giveaways - the news is no longer the point. Those gifts are being sold at cost (each disk costs about a euro in rights and production, which is added to the cover price). The benefit is in maintaining circulation in order to remain competitive and sell advertising. So the print news industry is essentially becoming a branch of the entertainment industry with a news flavouring. 

    At the Athens News we lacked the circulation to make such a system profitable, but we also wanted to remain in the news business. The revenue streams we created were a line in book publishing, which had obvious economies of scale with newspaper publishing; and we were in the process of creating a revenue stream through a paid online subscription. (Mysteriously, both the Athens News' former publisher and its present one have eliminated the online archive, which is one of a newspaper's chief assets). 

  • Shifting to a subscriber distribution model: With the inexorable, industry-wide shift away from news-stand sales, publishers have to hold on to their readers. The best way to do so is to enter into direct communication with them, pass on the economy of cutting out the distributor, offer gifts and draw direct feedback. 

  • Below-the-line marketing: Few print media can afford the scattershot methods of television and street advertising to find their readers. Extracting needles from haystacks is best done by holding a magnet over them – in other words, organising events designed to draw out of the social mix a particular profile of reader. At the Athens News we did this through our anniversary, our book presentations, focus groups and tie-ins with other community organisations. We also made the most of free or low-cost publicity through the internet and our friends in the community. 

  • Integrity: In the ever-more crowded field of self-observation, humanity is becoming confused about what to observe and which observers are credible. A newspaper's most important investment today, over and above marketing, payroll strength, paper and printing quality and advertising, is in its own strength of character. People will remain loyal to the media that demonstrate a loyalty to them. At the Athens News our loyalty was always to the reader first. 

    The country is awash with newspapers that consider the reader a close second priority to the business-to-business deals made between the publisher and members of the government. In such deals, the newspaper sells image-making services for state advertising, state protection and state contracts. The journalists who serve such newspapers are fully aware that their paymaster's interests will dictate the next day's front page, not the beat reporting done by them. We are so steeped in this kind of journalism that we barely notice it. But it is a flawed business model. Publishers who did well in the blackmail business in the 1980s have come and gone, or shrivelled beyond recognition. In any case, no-one, not even the government, can take a publisher without integrity seriously. The newspaper that establishes a consistent record of independent and objective reporting and analysis will ultimately win. 

    Related reading:
    New Europe on print media.

Wednesday, 21 October 2009

Greece begins to unpack its Cyprus policy

Prime Minister Yiorgos Papandreou is seizing an initiative in an area where Kostas Karamanlis' government was allowing opportunity to escape – Cyprus.

Where New Democracy undertook no new initiatives in five and a half years in power, Pasok is beginning to create a new momentum. As Alternate Foreign Minister Dimitris Droutsas told parliament on October 16, “We are going to change the way in which Greek foreign policy is conducted. Our aim is for Greece once again to … be a bearer of initiatives; to seek solutions; to make proposals.” This sort of enterprise diplomacy had all but died.

Standing before the Cypriot parliament on October 20, Papandreou brought Greece back onto the offensive, defining Greece's role as reminding Turkey that it has an interest in a successful reunification of Cyprus.

Monday, 12 October 2009

Pasok's first week: A breath of fresh air

Prime Minister Yiorgos Papandreou's opening speech to his cabinet on October 7 was like the opening of a window in a stuffy hospital ward. He told his ministers to collaborate, following up on a pre-election promise to avoid feudal departments. He told them to pre-emptively account for their actions to parliament, the media, independent authorities and the justice system, following up on a promise of accountability. He told them that one of the first new rules being prepared by the interior minister will mandate the publication of their acts online, following up on a promise of transparency. And he told them to dismiss every committee convened under the auspices of their ministry and hire administrators on the basis of ability, to make good on a promise of meritocracy.

Wednesday, 7 October 2009

Greece's new cabinet

The ministers sworn in on October 7 are as follows:

Prime Minister and Foreign Minister: Yiorgos Papandreou

Vice-president of the government, with particular responsibility for the Government Council on Foreign Affairs and Defence and the Committee for Economic and Social Policy: Theodoros Pangalos

Minister of the Interior, Decentralisation and E-government: Yiannis Ragousis
Deputy Ministers: Dinos Rovlias (Athens), Theodora Tzakri (Thessaloniki)

Minister of Finance: Yiorgos Papakonstantinou
(Deputy Minister: Philippos Sahinidis)

Sunday, 4 October 2009

The challenge facing Greece's new prime minister

Socialist leader Yiorgos Papandreou will be Greece's next prime minister. His party, Pasok, won 43.92 percent of the vote and 160 seats in parliament, comfortably avoiding the need to form a coalition. He defeated his conservative rival, Kostas Karamanlis, by an astounding margin of just over ten percentage points. Looking devastated, Karamanlis conceded and resigned from the conservative party leadership.

The political challenge for Papandreou is threefold: to balance the budget and pay down the national debt; to make the economy more competitive and reverse the high trade imbalance; and to introduce greater transparency, accountability and meritocracy in public life. He has promised to do it all. Difficult though they are, the tasks cannot be separated because lack of progress in one area would undermine the others.

Saturday, 19 September 2009

The Greek election: Judging the parties on the issues

Half-way through the election campaign sparked on September 2, the socialist opposition appears in opinion polls not only as the probable winner, but in some scenarios even manages enough MPs to form a government. Pasok had a six-point lead even after Prime Minister Kostas Karamanlis announced ruling New Democracy's policy platform on September 5. That lead may have broadened after Pasok leader Yiorgos Papandreou announced his party platform on September 12. By some reckonings Papandreou may even win single-party sovereignty in the first round.

Pasok and New Democracy platforms compared

New Democracy and Pasok have both made some sweeping and, in a few cases, radical proposals.

Both are broadly in favour of greater transparency and accountability in the public sector. Both want to bring the public debt under control by striking at tax dodgers and through better economic planning (three-year rather than one-year budgets). Both want to increase economic competitiveness, for instance by making it easier to set up a company. Both want to give secondary school students free laptops.

Sunday, 6 September 2009

The first shots

Pasok and New Democracy are rejecting the idea of a grand coalition if neither of them achieves a large enough majority to rule on October 4.

“Right now we have big political differences with Pasok,” said Prime Minister Kostas Karamanlis at a press conference in Thessaloniki on September 6. “It hasn't recognised that there is a deep crisis. Second, it has no plan. Third, it has adopted a very accusatory rhetoric towards the government while sweet-talking voters. We know the crisis. We articulate it. We know what needs to happen to deal with it. We are prepared to take bold decisions to face it. There aren't the objective criteria for a coalition.”

In written responses to Sunday Eleftherotypia, socialist leader Yiorgos Papandreou cited the crisis as well. “We believe people will prefer a strong, independently sovereign government at the present time,” he wrote. Like Karamanlis, he rejected collaboration on the basis of incompatibility. “There is a clash of two views of our society and country. One view is self-serving, assimilating public wealth for private gain... the other is a belief in a Greece based on values.”

Saturday, 5 September 2009

Karamanlis' inaugural election speech

Prime Minister Kostas Karamanlis was due to deliver his keynote speech on Saturday September 5 at the Thessaloniki international Fair. It is normally the most important scheduled speech the PM delivers, announcing economic and social policy for the coming year.

This time it is also the inaugural speech of an election campaign for a third term, and comes as the worst international financial crisis in 70 years really begins to bite into the Greek economy.

Given these circumstances, the speech outline distributed by his office is disappointing. Rather than unrolling a platform of new initiatives to stimulate the economy, send green projects into hyper-drive, protect the environment and bring the expensive deficit under control, Karamanlis is largely repeating last week's speeches.

Karamanlis plans to summarise his policy successes and predict a difficult two years ahead. He will repeat the three-pronged recovery strategy announced on September 2, namely reducing public spending, collecting due taxes and making structural changes to the economy. This will leave reporters only the Sunday morning press conference to glean more policy specifics in these critical areas.

Thursday, 3 September 2009

The dubious election

The Greek press is having a field day. “We failed, but vote for us again,” blared the banner headline on opposition-friendly daily Ta Nea. “Voluntary redundancy,” sniggered the similarly slanted Ethnos.

Prime Minister Kostas Karmanalis' declaration of snap elections on September 2 hardly came as a surprise, though. Ever since he reshuffled his cabinet in January, many political commentators have opined that it was his battle formation for an attempt at a third term. This was mainly because he purged the cabinet of anyone with a lingering connection to the Vatopaidi scandal, and ditched then-finance minister Yiorgos Alogoskoufis, who had associated himself (unforgivably, it turns out) with fiscal discipline. The question was whether Karamanlis would hold the general election around Easter, or simultaneously with European Parliament elections in June.

Greece heads for elections

The Greek prime minister has declared a general election, just days after his administration came under severe criticism for its management of a massive forest fire that burned 50,000 acres of forest land and threatened homes in Athens.

Prime Minister Kostas Karamanlis' decision announced late on Wednesday did not come as much of a surprise. The government's reputation has been ebbing almost since it was elected to a second four-year term just two years ago. A series of economic scandals last year followed by the economic crisis took their toll, but also weighing heavily against the conservative New Democracy party has been its environmental record.

Forest fires in 2007 destroyed record acreage; both then and again last month, they denuded the smoggy capital of its main sources of oxygen. The socialist opposition had vowed to trigger elections next March, when New Democracy would need bipartisan support to re-elect the president. so Karamanlis decided that despite trailing in the polls, he will move the fight up to a month from now.

The reasons Karmanlis himself gives are sound. The country cannot flail in an electoral frenzy between now and March if economic measures are to be taken that set the foundation for a long-term recovery two years from now. He cited three main areas: Shrinking government (which is responsible for two thirds of Greece's national debt), tightening up tax collection and restructuring the economy in key areas.

Karamanlis did not go into details, saying he will fill in the specifics at the Thessaloniki International Fair on Saturday September 5. The devil is clearly in those details. Shrinking government is something no government has taken on wholesale; tax evasion is what keeps many employers in business; and restructuring the economy must include a painful pruning of the social security system socialist and conservative governments shied away from in 1992, 2001 and 2008.

But the race is clearly on; Papandreou is expected to answer with an electoral policy platform on Thursday September 3, meaning that his appearance at the TIF, like that of Karamanlis, will be an official campaign launch.

To hear the related NPR report, go to

Wednesday, 2 September 2009

Massive blast marks new departure in Greek terrorism

A massive bomb exploded outside the Athens stock exchange at 5:35am local time on Wednesday. About half an hour earlier a telephone call was placed to Eleftherotypia newspaper warning that a van filled with explosives would explode.

All that remains of the van, police say, is an axle. The blast blew out the windows of the multi-storey building and caused damage to neighbouring buildings. A cleaning woman was lightly injured by flying glass 500 yards away. Despite internal damage to the stock exchange offices, the exchange announced it would operate.

There has been no claim of responsibility yet, but a local terrorist organisation called Revolutionary Struggle attempted to blow up a Citibank building in similar fashion in January. On that occasion the intended bomb was a car trunk full of petrol and fertiliser.

The Citibank plot was foiled because a night guard saw Revolutionary Struggle parking the car, went out to talk to them and was told to leave the building because he would be killed. He had the presence of mind to call the police, who defused the bomb.

But from that point on it became clear that Greece was making a qualitative leap in terrorism. The old model of targeted shootings against businessmen and foreign diplomats 17 November had stuck to for 27 years (1975-2002) was over. Greece would sooner or later experience a Timothy McVeigh-style Oklahoma City event. Thanks to a tradition, for want of a better word, of seeking grassroots popularity and not claiming unintended victims, Revolutionary Struggle is at least avoiding Oklahoma City-level casualties. But Once you start planting vans full of explosive on the street, an unintended victim is only a question of time.

Friday, 28 August 2009

The tally of destruction

The fires that struck Attica last weekend have resulted in millions of euros' worth of damage - and a heavy political price tag, too.

Greece's public works ministry says 65 homes were completely destroyed by last weekend's wildfire east of Athens, and a further 143 partly destroyed. The blaze tore through more than 2,000 hectares (200,000 stremmata or 50,000 acres) of pine forest according to a preliminary tally by the Word Wide Fund for Nature (WWF) after the fire service lost control of what had begun as a small fire on Friday 21 August.

The fallout is now threatening the government's stability. The leading opposition socialist party has called the ruling conservatives genetically incompetent, and says it will force an election next March; that's when the conservatives need bipartisan support to elect a new president.

Unless the government makes progress in protecting the environment as well as surviving the economic crisis, its days could be numbered.

To hear my reports, as well as other news, go to (click on Hourly News).

Thursday, 27 August 2009

Pilot killed fighting fire

Summer wildfires in Greece have claimed their first fatality this year. A pilot was killed while dousing a fire on the island of Kefalonia, about 170 miles west of Athens.

The pilot was killed in the Katelios area of the island after he steered his single-seater aircraft over the fire, and made his drop. Authorities cannot yet explain why he steered into high voltage power lines as he lifted.

The Polish-built Petzetel aircraft he flew carried about a tonne of water treated with fire retardant, and was originally designed as a crop duster. Greece owns a large fleet of these planes, converted to firefighting use, because they are quick off the ground and very manoeuvrable. They are meant as a first line of defence, dousing fires while they are still small.

But it is a dangerous business, because pilots must fly low to the ground and cannot always control the aircraft's behaviour after discharging the enormous weight of water they carry.

"He was a very good man, he had done a great deal for Kefalonia," said prefect Dionysios Georgatos. The Katelio fire, which had threatened homes, had successfully been put out, he said.

Greece lost two pilots to a similar accident in 2007. They were experienced pilots flying a new Canadair aircraft over fires in Evoia. After dropping their six tonnes of water they experienced the usual uplift, but in this case it was followed by a sudden drop. As they were operating at very low altitude, they had no time in which to lift themselves by using their engines.

The Petzetel was one of nine aircraft fighting three separate fires across Greece. The other two were at Aspro Horio, on the island of Paros, and Karystos, in Evoia.

You can hear my radio reports at (click on hourly news).

Tuesday, 25 August 2009

A helitanker picks up water from a purpose-positioned municipal tank off Pendeli Square on Sunday 23 August. At least two such helitankers buzzed around the squafre like angry wasps, dropping two tonnes at a time on fires that threatened homes under the canopy of the pines.

This fire engine was flagged down by local residents to put out a yard fire off Pendeli Square on Sunday 23 August. It soon flared up again as the fire burning deep inside the wood resurfaced..

This municipal tanker truck put the yard fire out a second time... but left a burning limb on a large pine tree.

This volunteer tried unsuccessfully to saw off the burning limb. Another succeeded him up the ladder with a bucket...

... finally, he managed to extinguish the limb. A great shout of triumph rose from the gathered volunteers.

A smoker watches the fires being fought on Pendeli mountain on Sunday 23 August.

Monday, 24 August 2009

Why did the fire get out of control?

A major difference between the fire that burned a large portion of Attica over the August 22-23 weekend and the devastating fires of 2007 is that no-one is blaming arsonists or claiming a conspiracy against the nation. That was Prime Minister Kostas Karamanlis' position on August 25, 2007. This year, the government is simply blaming the elements.

It is less sexy, but closer to the truth. On Saturday the fire service spokesman referred to the fire as a “natural disaster”. That same afternoon Karamanlis visited the fire service's operations centre and simply emphasised the self-sacrifice of the men and women in uniform. Later that day he called for calm. On Sunday, visibly weary, he simply said that “the situation continues to be difficult.” No blame was apportioned, no witch-hunt for a conspiracy of arsonists begun.

No one seems to want to comment on who, or what, started the fire. Instead, mayors and community leaders in the stricken areas are raking the government and fire service over hot coals (no pun intended) for what they see as tardiness and sloppiness.

The leader of Grammatiko, Nikos Koukis, where the fire started on Friday night, says the battle could have been won if air drops of water had taken place early on Saturday morning: “The fire… could have been contained if air drops had happened by 6:30, 7:00 or even 7:30 on Saturday morning,” he told The New Athenian. “These drops did not happen, the fire spread into a thickly wooded ravine and spread in an hour to Varnavas and in about two hours to Marathon.” Other locals gave similar descriptions of the fire service losing the battle in the small hours of Saturday. The moment is critical. It was the last chance to contain a conflagration.

The people of Grammatiko have also drawn a connection between the fire and a landfill being constructed near their town. Police have had to be stationed on the road to Mavro Vouno, where the landfill is being prepared, since July 6. Their role is to stop vandalism or burning of the excavators and bulldozers working at the site, after numerous threats.

The only real connection between the landfill and the fire seems to be that the fire began at a point called Pyrgathi, about 300 metres from Mavro Vouno, where the landfill is being built. Koukis thinks the police, who would have been among the first to spot it, could have done something to stop the fire, or at least alert him. (In the event, he was informed by the community leader of neighbouring Varnavas about half an hour after the fire service was informed).

Koukis goes far enough to voice a conspiracy theory: “There are rumours that this was not accidental but an attempt to overcome the reactions of locals [to the landfill], who say 'this is a paradise and why do you want to bring us the landfill here?'” The theory is a little far-fetched, perhaps, but it is a response to those who accuse of local activists of realising a threat to burn out the excavators.

The tit-for-tat accusations over the landfill are a measure of the passions for and against the landfill that has been imposed by court order on this idyllic community. The enmity between police and the local community even after the fire is an example of a heinous lack of coordination between authorities even to avert disaster. How can we protect a natural heritage no-one owns if we are willing to cut off our noses to spite our faces?

Sunday, 23 August 2009

The problem of flareups

Firefighters battling the blazes east of Athens faced rapid flareups where they had previously put out fires during the day on Sunday. There does not seem to be a co-ordinated enough process to ensure that what is put out stays put out.

This is the main complaint made by residents to media, since they are usually the first to notice new fires while they are still small. Aware that the fire service is caught in a triage process, devoting assets only if their situation worsens dramatically, they have taken to beating the flames with branches and spraying them with garden hoses wherever they can, assisted by volunteers.

Still, the fire service seems to have picked up its rate of response through the day, indicating that it may have broken the back of this devastating fire that began on Friday night. For example, fires were extensive in Pallini and Pikermi, just east of Athens, on Sunday morning, whereas the response time was faster in Agios Stefanos and Kaletzi by evening, resulting in smaller burnt areas.

Agios Stefanos, a few kilometres northeast of the city, flared up in the middle of the day but was out by about 4pm. Kaletzi, about 15 kilometres northeast of the city, was reported to be flaring up around that time, but by 630pm it was out, having burnt only a few acres of trees.

I saw the ease with which wood re-inflames itself off Pendeli Square, in the eastern suburbs. Fire reached the front yards of houses off the square in the middle of the day. It nestled in some piles of dead wood in an untended plot and jumped from there to the branches of a large Aleppo pine.

A fire truck put it out once, followed by a municipal water tanker a second time. It reignited yet a third. It was left to a few young men and women with buckets of water and branches to carry on the fight.

One of them climbed a ladder and took a saw to a flaming branch. It was too thick to cut. Another climbed up with a bucket of water and doused the limb. But it was a small victory in a small yard. Around the volunteers smoke filled the air and helitankers circled overhead like angry wasps in an orange sky, a reminder that the size of this task requires superhuman machinery.

Much of this machinery has been mustered, leading to a new high in resources at hand: The fire service reported 162 fire trucks, 70 tanker trucks, 14 water-bombing airplanes and seven helitankers in operation in Attica on Sunday. The fire service had 650 men in the field, and army hundreds more. This buildup may have played a key role in allocating resources to fires quickly enough to prevent them from becoming unmanageable.

Co-ordination seemed to be another problem. Residents on Pendeli stood in the doorways of their houses and flagged passing tanker trucks and fire trucks like taxis. These vehicles did not seem to have specific instructions. They patrolled and stopped randomly to spray a flareup here or there, and seemed amenable to instructions from locals.

The armed forces say they have been actively involved putting out fires, not merely patrolling burnt areas. I saw them with bladders on their backs which were connected to spouts for spraying, and platoons with shovels and pickaxes were also deployed.

The pine forests of eastern Attica have been devastated. Thousands of acres on the southern, eastern and northern slopes of Mount Pendeli lie blackened and smoking. Around Marathon Lake, considered by generations of Athenians a spot of particular beauty, the forests are gone.

Some fronts remained active by evening in Nea Makri, Mount Kithairon and the area of the ancient site of Rhamnous. Should they burn until nightfall removes aircraft from operation, there is a chance that they could present the fire service with a new challenge on Monday.

Inevitably after these fires people argue about how they started and whether the fire service strategised its response well. But the key question is what is being done to prevent them. Why forest floors are not cleared, dead wood cut away from trees and networks of early warning heat sensors installed in the forest are the questions the government has to answer.

Fires burn eastern Athens suburb of Pendeli

The eastern Attica fire finally reached Pendeli, Athens' easternmost suburb, on Sunday morning.

The entire region between Pallini due north to Anthousa, Drafi and Pendeli has been burned in the second night of the Grammatiko fire which started on Friday night. It has travelled about 40 kilometres from Grammatiko due south and east, burning almost every tree stand and all shrubland in its way.

The landscape is lunar. Pine forests lie charred down to the stumps - around them foliage burned to reveal blackened stones. Here and there smoke billows out of holes in the ground and there are frequent minor flareups.

Seven-force winds have been the key to this fiery onslaught. Many houses were saved precisely because the wind urged on the fire so fast that it hadn't time to digest homes. But anything lying outside garden walls – trees, power pylons and rubbish dumpsters - was devoured.

Many local residents had spent the night protecting their homes. On Sunday morning they were still doing what they could to put out small fires near their homes, beating them with olive branches and shovels, or forming human chains to relay buckets of water filled using yard hoses. The air was thick with acrid smoke, and people were covering their faces with T-shirts, kerchiefs and towels to work. Many had come to help friends and relatives. Occasionally the siren of a passing fire truck could be heard, but the fire was so widespread that many people didn't expect one to stop for them.

Despite 600 firefighters, 132 fire trucks, dozens of tanker trucks, 12 Canadair water-dousing planes and seven helitankers, foreign aid has had to be called in. Two Canadairs were due to arrive from Italy; another four were due from France and Cyprus.

The fire has been advancing over Pendeli mountain, a posh eastern suburb. By 1pm it had reached Pendeli's main square, and an evacuation order was given. A helitanker flew low over the square, dousing flames that leapt just a few dozen yards away. The smoke in places was so thick that visibility was only a few yards. Tanker trucks patrolled the main Pendeli road spraying down flareups in the pine stands that survive. The frequency of fires on this mountain has been great in recent years. Much of the growth now burning is only about four feet tall – not old enough to seed another generation.

Many Pendeli residents were waiting until the last moment to evacuate their houses. The roads were still lined with parked vehicles in late morning. Many people were waiting outside their homes, faces covered, their dogs beside them on leashes. From the invisible depths of the smoke explosions were audible – natural gas tanks, perhaps, or cars exploding.

Saturday, 22 August 2009

Athens fires to spread overnight

The fire that started at 8:46pm on Friday 21 August in Grammatiko, about 30km northeast of Athens, has split into several fronts going in all directions. One front threatened Varnavas, Grammatiko's neighbouring town to the north-northwest. Another burned its way to Sesi, the beach local to Grammatiko, due east, and was by one report threatening the ruins of Rhamnous, the 5th century Athenian garrison fort. Another front has burned west-southwest to Lake Marathon and another, further in the same direction, threatened homes in Stamata and was bound for Dionysos, which can be described as an outlying suburb of greater Athens. The fronts are so many that even well-funded local media have had trouble keeping track of them with the aid of helicopters. No one has ventured a number. The fire brigade speaks of one fire broken into many fronts.

The fire is eating its way through thick pine forest and shrubland. Houses and farmsteads have been burned, but no-one knows how many. Television images suggested that outlying houses in the town of Grammatiko itself were about to be licked by flames 10 metres high.

Firemen fought hard to douse a blaze in Magoula north of Athens yesterday. But a tally of the resources brought to bear gives an idea of the scale of this fire: At the height of operations today, 78 fire trucks supported by 32 tanker trucks, 12 Canadair water-dousing planes and eight helitankers along with a total of 260 men were losing this battle badly.

The sky over Athens told the whole story. Half was azure blue and cloudless, as nature meant it to be on this day. The other half was an evil mixture of charcoal-black opening to brown, so thick that it eclipsed the sun.

Summer camps and homes have been evacuated, with many people suffering from smoke inhalation. No casualties are yet officially reported. Even the army has retreated from a base in the area, no match for the seven-force gusts that are the key to the strength of this fire.

As we go into a second night of the blaze, it is unclear whether the fire fighters will be able to bring greater resources to bear on Sunday. Sixty fires started across Greece on Friday, another 65 on Saturday by late afternoon. With such tallies the fire brigade has to keep assets spread far and wide in anticipation of other potential disasters. Add to this the fact that a windy night favours fire because aircraft cannot operate in the dark. It is safe to say that dawn will reveal a very different eastern Attica to that which we knew until last week.

Monday, 17 August 2009

How bad is it, really?

The gulf between Greece's predictions about its economy and the predictions of international monitors begs an obvious question: What is the truth of our situation? Are we due for a massively painful comeuppance in the autumn?

Take growth. The original 2009 budget predicted a rather gallant 2.7 percent, down only slightly from last year's 2.9 percent. The European Commission suggested in January that 0.2 percent was more realistic. Incoming Finance Minister Yannis Papathanasiou revised his predecessor's estimate to 1.1 percent in February, and revised it again in June to “around zero”.

First quarter GDP growth was just 0.3 percent, year-on-year, and second quarter growth was -0.2 percent.

It seems highly likely that Q3 will also run negative. It is heavily dependent on tourism, responsible for an estimated one fifth of the economy. The Bank of Greece announced a drop in January-May travel receipts of 17.9 percent as compared to last year. The key industries of shipping, construction and domestic retail are also suffering.

It now appears that 2009 GDP as a whole will be negative. The International Monetary Fund, which last spring had agreed with the Commission's estimate of 0.2 percent growth, published a revised estimate earlier this month of -1.7 percent. The Organisation for Economic Co-operation and Development (OECD) also thinks the Greek economy will contract, by 1.25 percent.

The deficit is another area of statistical disagreement. The original 2009 budget optimistically forecast that revenues would fall short of expenditures by a mere two percent of GDP this year. The European Commission opined 3.5 percent in January, later revising it to five percent. In a biannual survey of Greece released on July 31, the OECD said that Greece will top six percent of GDP in borrowing this year, rising to 6.75 percent next year. The IMF on August 6 predicted deficits of 6.2 percent and 7.5 percent of GDP this year and next.

Who is closer to the truth? Papathanasiou, or the OECD and IMF?

Greece has, for the second time since joining the euro in 2002, incurred the EU's Excessive Deficit Procedure. It has been given until October to come up with a radically revised Stability and Growth Plan. That plan must explain not only how Greece will contain expenses; it must also put in place a programme of structural changes that will cut the public payroll, improve public education, save social security from bankruptcy and make healthcare viable. Until that plan is made public in October, along with the 2010 budget and Q3 results, we are unlikely to know how the Greek government really sees things.

There are early signs that the government is coming around to international pessimism. Papathanasiou told reporters on August 4 that he may ask the EU to extend its 2010 deadline for bringing the deficit under three percent of GDP by a year. A three-year plan had been his original preference, and his return to that position is a sign of lost optimism.

But Papathanasiou also argues that gloomy predictions ignore a windfall of 5.7 billion euros' worth of Public-Private Projects (PPPs), which it will fast-track now after years of bureaucratic wrangles. It also claims it will front-load the programme of EU-funded infrastructure projects, which is worth 24.3bn euros over seven years. Fine, but can the government pull off what it promises?

Greece also claims that international predictions ignore the parochialism of its economy. It is not export-driven, and the forecast 19.2 percent decline in its exports this year (IMF) will affect it less than they would, say, Germany; its banks are not heavily invested in toxic assets; and more than half of its workforce is employed by small and medium-sized enterprises (companies of fewer than 20 employees) rather than multinationals. These points are all true, but they can only limit damage. They do not replace lost growth.

There are also some counter-arguments. The IMF and OECD point out that Greek banks' heavy investment in the Balkans means they are exposed to nonperforming loans there due to economic slowdown and currency discrepancies. And as Bank of Greece Governor Yiorgos Provopoulos warned earlier this year, Greece will suffer from underemployment as opposed to unemployment, so the statistics may be misleading as to the extent of the social damage.

Most importantly of all, the challenge for Greece is not weathering the crisis but recovering from it. Many economists think it can only do so with structural reforms in social services and by lowering public expenses. These are reforms the European Commission, the IMF, the OECD and the Bank of Greece have all called for. So has a chunk of the Greek electorate.

Just as the recession has come to the Greek economy with a delay factor of a few months, so will the impetus for reform as a result of that recession; but come it shall. Press reports suggest that Prime Minister Kostas Karamanlis and Papathanasiou are planning to announce a restructuring programme in the autumn. The socialist opposition will probably attack it, bent on elections. Voters will have to keep their ears open to the argumentation on both sides. Who embarrasses whom in this debate will be important.

Monday, 10 August 2009

Deciduous government

Political reporters in Greece have one hot topic this month: Whether the ruling conservatives will declare an election in the autumn, or wait for the opposition socialists to trigger one in March. The Panhellenic Socialist Movement (Pasok) has declared that it will do so by refusing to renew Karolos Papoulias' tenure as president.

In favour are some powerful arguments:

The end is nigh: If Pasok is making elections inevitable, the government may as well use the element of surprise as well as it can, while it can. No good news for the Greek economy is likely between now and March. On the contrary, companies may step up layoffs as they mend their balance sheets ahead of the fourth quarter, on which 2010 business plans will be based. Early September brings the PM's economic outlook at the Thessaloniki International Fair, which cannot realistically be rosy, followed by a necessarily tight budget in October. Prime Minister Kostas Karamanlis has already been upstaged at the TIF once. Last year he gave a realistically downbeat assessment of his scope for handouts. Pasok leader Yiorgos Papandreou inspired Greeks with a less realistic but more visionary speech of economic and moral reconstruction a week later. The polls turned in Pasok's favour and have remained that way ever since.

Pass the poisoned chalice: Some argue that if New Democracy is going to lose, it may as well go this year and let Pasok bear as much of the recession as possible. There is the moral gain of going out knowingly rather than ambushed. There may even be some reason to hope that ND can make a comeback if it leaves Pasok an impoverished state unable to carry out high-flown pre-election promises, and then triggers an election in March.

Entropy: Karamanlis may need to renew his mandate merely to run his shop. Leading backbencher Yannis Manolis says he will resign his seat on September 7. Others may follow if they feel their reputations are best served by abandoning ship. Sixteen MPs from Larissa formally entered the back benches with a July letter asking the PM to restructure the party following corruption scandals. The fashion could catch on. Karamanlis declared an end to the last parliamentary session in May, six weeks earlier than usual – an indication that he cannot survive much legislative criticism.

The legislative challenge: Finally there are national concerns. Leading economists (central banker Yiorgos Provopoulos among them) believe that Greece may not emerge from the current recession without overdue structural reforms. Only a stable government can see through tough labour, social security and education reforms as well as a tough 2010 budget which will, in theory, be Greece's last chance to bring the deficit below three percent of GDP.

Arguments against early elections are currently weak:

New Democracy is likely to lose: Some, like Manolis, opine that whether it does so at its own instigation or Pasok's matters little, and that the party should instead retrench itself.

Possible good news in the economy: A better-than-expected August tourism industry, accelerated privatisations and early signs of an end to the recession by March may justify the government's disciplined budget. This scenario stands better chances of success if September opinion polls fail to convince voters that Pasok can win outright, and that the alternative to ND is an unstable coalition floating on promises. Finance Minister Yannis Papathanasiou may even convince the European Commission to offer an extension to its 2010 deadline to bring the deficit under control. In such a scenario, a reshuffle may be enough to appease backbenchers and give the government renewed impetus.

Let Pasok take the blame as well as the power: Whoever calls elections will suffer for it somewhat. Large electoral majorities are currently against the expense and upheaval that elections involve. If New Democracy waits until March, it can rake Papandreou over the coals for sparking an election on constitutionally dubious grounds, and disputing a highly popular president hailing from its ranks. The numbers might even convince Pasok to pull back from its strategy.

National concerns: Greece arguably needs to have more than a caretaker government in power in October when the European Commission presents its report on candidate nation Turkey and EU hopeful Fyrom (The Former Yugoslav Republic of Macedonia), so that it can conduct foreign policy. Pasok can accuse ND of putting party self-preservation before national interests.

Ultimately the prime minister's decision will turn on the economic outlook and the late August/early September opinion polls. The bizarre element in this finely balanced calculation is a possible death wish. Karamanlis is visibly fed up of trying to reform Greece against sometimes nonsensical opposition, a party propensity for scandal and an unfavourable economic environment that greatly reduces his options and therefore his power.

If he believes that prolonging his tenure will only produce more unpopularity and disgrace, Karamanlis might call it a day and leave Papandreou to taste the sweetness of governing the ungovernable, while Foreign Minister Dora Bakoyannis and Culture Minister Antonis Samaras battle it out for the succession. He could then retire to Rafina for a term and wait for Papandreou to offer him the presidency.

Sunday, 2 August 2009

Replacing King Log

The most interesting and passionate political debate in Greece this year is that now taking place over the re-election of President Karolos Papoulias.

The socialist opposition, Pasok, has thrown down the gauntlet by declaring that while it supports Papoulias on substance, it will trigger a general election by not voting for him next February. Papoulias is a Pasok former foreign minister who enjoys enormous popularity, so Pasok leader Yiorgos Papandreou's position has raised eyebrows. The 151 ruling conservative MPs would need to build a two-thirds majority (200 MPs) to elect him in two voting rounds, or a three fifths majority (180 MPs) in a third round.

If New Democracy fails to garner the votes, article 32 of the constitution allows for a further three voting rounds under a new parliament, which means a general election. Given Pasok's recent lead of anything between two and five points in the polls, it expects to win either outright or as senior coalition partner. After that, Pasok says, it would re-elect Papoulias in a fourth round (again requiring 180 MPs), a fifth round (requiring 151 MPs) or a sixth round, which selects the stronger of two candidates.

New Democracy did this once before, in April 1990, deliberately triggering the fall of an ecumenical government to assume one-party rule and elect its elder statesman, Konstantine Karamanlis, as president. The difference is, New Democracy did not state its intention.

Is Pasok being refreshingly candid or is it abusing the constitution? Greece's top legal scholars have argued both ways.

Athens University's Yiorgos Kasimatis, who was involved in drafting the 1975 constitution, is of the opinion that a party can only reject a presidential candidate on the basis of his character and suitability (interview in To Paron, July 12). Panteion University's Dimitris Tsatsos agrees (interview in Kathimerini, July 19). Both think that Pasok is abusing the constitution; but their criteria are as much political as legal.

Kasimatis advised Andreas Papandreou to remove the presidential power of dissolving parliament in the 1986 constitutional revision. That removed the biggest threat to the dominance of the executive. Tsatsos is against the election trigger that remains in article 32, which allows an opposition party to undermine the parliamentary majority. (Presidential elections have, since 1975, always taken place between general elections, and have therefore loomed over every democratically elected government). In other words, both Kasimatis and Tsatsos hail from an a priori position that parliamentary democracy must be as unfettered and functional as possible.

Athens University's Nikos Alivizatos takes a different view. He does not think that Pasok is abusing the constitution. He thinks that the clipping of presidential power in 1986 left the opposition veto as “the only institutional counterweight to the excesses of prime-ministerialism. In other words, the only check on what [Alexis de] Tocqueville called 'the tyranny of the majority'.” (Interview in Kathimerini, July 26). Like his colleagues, Alivizatos interprets the constitution using political as well as legal criteria. He does not believe parliamentary democracy needs to be strengthened but balanced, and describes the Greek polity as “the most centralised parliamentary system in Europe.”

Alivizatos has previously argued for creating a judiciary counterweight to executive power. He favours stripping the cabinet (effectively the PM) of the authority to appoint the presidents of the Supreme Court, the Council of State and the Court of Audit, the country's three highest courts, and allowing the judiciary to produce its own leaders. Other constitutional experts share Alivizatos' suspicion of concentrating so much power in the hands of the ruling party. The late constitutional expert Yiorgos Papadimitriou, for instance, supported giving parliament's Audit Committee, made up of politicians and senior judges, more sweeping authority to investigate the finances of politicians and parties.

The public dialogue among experts has not answered the question of whether Pasok is acting unconstitutionally, but it has opened up the larger question of whether the constitution is flawed.

Five years of conservative rule have proven Alivizatos right in political terms. New Democracy's impressive track record of financial scandals indicates the need for authorities independent of the body politic. Where those authorities have existed, New Democracy has abolished them to protect itself. Who can forget the disgrace that was the abolition of the independent authority against money laundering last year, just as it was about to produce a damning report on bonds the conservative government issued in 2006? Suggestions have now been made that the government's greatest source of power, the budget, be taken out of the political realm and drafted by an independent financial authority.

Even without New Democracy's appalling lack of transparency and accountability, though, the Greek system is far too centralised. In a non-presidential system, where the executive springs from and controls the legislative branch of government, one set of checks and balances is already done away with. In the absence of a bicameral parliament, another set is done away with. When MPs vote the party line and party leaders are given power over the judiciary, it is difficult to see where dissent will come from except from the back benches, and we have a weak backbencher tradition.

So who will be the government's conscience? The media are a flawed court because the preoccupation of newspaper owners is often to leverage corporate benefits from the system rather than to foster a tradition of objective journalism. As Alivizatos points out, we do not have universities and think tanks wealthy and independent enough to speak truth to power. At times, it seems as though the 1975 constitution did away with vasilevomeni dimokratia (monarchic democracy) only to introduce a self-styled dimokratiki vasileia (democratic monarchy). Like the frogs of Aesop's fable who asked for a king to replace the log in their pond, we have received a stork.