Friday, 6 February 2009

Substance, not politics, please

It would take the hardiest spirits to look upon the events of the past week with anything improving upon dismay.

Greece acquired a new terrorist organisation, Revolutionary Sect, which, judging from the unfocused anger, vacuity and poor Greek of its first proclamation, could be the country's first nihilistic group. Previous urban guerrilla groups have hailed from the left and attempted to proselytise the public with lengthy economic and political ramblings. Revolutionary Sect, which left its proclamation on the grave of slain teenager Alexandros Grigoropoulos, seems to be out to win only the support of the self-indulgently irate.

In the very same week a Special Guard seems to have taken leave of his senses when he fired upon and seriously wounded a private security guard outside the US ambassador's residence. It was a member of his elite police unit that killed Grigoropoulos on December 6, so the incident was grist to the mill of those who believe that Grigoropoulos was targeted by a psychopath in uniform.

Rounding up a disastrous fourth week on the job for Alternate Interior Minister Christos Markoyannakis, who oversees the police, was the political reaction to his approval of the use of teargas on Cretan farmers who landed their tractors at the port of Peiraieus. Markoyannakis was roasted in parliament for preventing them from driving up Syngrou Avenue and bringing the capital to a standstill, much as their Thessalian comrades had choked off the country's highways.

That the December riots should spawn a new group bent on violence is, perhaps, not terribly surprising. There are enough people in the country with little to offer society except exploitation of its problems.

What is surprising is that the government should do anything as foolish as to float electoral challenges to its opponents, instead of focusing on the crises at hand; or that the opposition should react to a dangerously incompetent administration and back-seat prime minister with a politics-as-usual attitude.

Greece is sailing into dark waters. Surveys consistently point to a prolonged recession and a weakening of our fragile social fabric.

Polling company VPRC's annual poverty survey, released last week, sustains these concerns. It found that a quarter of the population could not do at least three of four things last year - go on holiday for a week, eat meat or fish every other day, face incidental expenses or adequately heat their home - up six points on 2007.

The survey also found a dramatic increase in the number of people who said they had difficulty paying their regular household bills, from 27 to 35 percent; and that roughly a quarter of the nation had trouble paying off loans and credit cards, up by seven points.

These figures are drawn from a year in which most households did not feel the pinch of the international financial meltdown palpably, so the outlook for 2009 must be considerably worse.

How much worse is largely a matter of guesswork. The General Confederation of Greek Workers' Labour Institute (INE-GSEE) estimates that some 80,000 jobs will be lost this year - about 1.7 percent of the people in work. That would reverse a year's worth of progress under New Democracy, bringing Greece back to 2007 employment figures. Employment Minister Fani Palli Petralia evidently has a similar estimate; she wants the prime minister to give her the green light to put 60,000 unemployed people on the public payroll for a fixed term.

Such direct interventions will come at a significantly higher price tag than usual. Finance Minister Yannis Papathanasiou's revised stability pact estimates that Greece will borrow this year at an increased average interest rate of 5.3 percent, up from 5.1 percent last year and 4.9 percent the year before.

Turning from fiscal discipline to politics, however, things are even tighter. Polls show New Democracy still trailing Pasok by at least four points. As the downturn bites deeper into the economy this year, waves of people can be expected to storm the capital for handouts. Construction, tourism, manufacturing and shipping are all expected to suffer significant job losses.

What really tips the scale in favour of borrowing, though, is that public opinion on the whole tends to empathise with the demands of particular groups. As farmers blockaded Greece's highways and border crossings for almost two weeks, polls showed that majorities of more than 50 percent supported their claims even as they disapproved of the sit-ins.

When asked whether the government should err on the side of higher taxation and lower borrowing, on the other hand, only 35 percent of Greeks gave an unequivocal yes.

The political climate suggests unequivocally that the empathetic Greek character will prevail on a 151-seat majority government to borrow now and pay later, simply to keep society from falling apart. Papathanasiou's scope for achievement will be in how much waste he can trim from current spending. Every euro he doesn't have to borrow is an investment in our fiscal future.

This is clearly a time for serious and, if possible, bipartisan action, not politicking, either by the government or by the opposition. New Democracy's MP Katerina Papakosta put it best when she suggested that the next election law should forbid governments from manipulating the timing of elections, and oblige them to serve out their term. Since 2007 New Democracy and Pasok seem to have occupied themselves with little else.

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