Independent coverage and analysis of Greece and the region
by John T. Psaropoulos
Monday, 10 August 2009
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.