Thursday, 10 November 2011

The Bill for Incompetence Has Arrived

Having lost financial credibility and then political credibility to pull itself out of its sovereign debt mess, Greece has now lost credibility even in the media. No one seems to be sure if or when a new government will be announced.

Prime Minister George Papandreou has brought this upon himself and the country. New Democracy committed itself to talks resulting in a national unity government last Sunday. Papandreou has the parliamentary majority and constitutional prerogative of naming the next premier. Instead of leading talks, he allowed himself to be dragged through four days of postponements. He has now bid farewell three times: in a speech to parliament last Friday, in a cabinet speech last Tuesday, and in a national address last night. Such prolonged death scenes do occur in the opera, but without the notes they lower the dignity of the reluctantly departed.

The plot of this particular musical theatre suits it more to the genre of operatic farce, with suitors and jealous ministers hiding in closets and passing notes. The media, like the public, have been played like a sounding board, broadcasting the names of jumped-up hopefuls or of personalities who had no idea they were up for the job. Finance Minister Evangelos Venizelos circulated his name, and is said to have secretly approached opposition parties in a parallel negotiation to the prime minister's. Someone at Pasok party headquarters told Reuters it would be Vasilis Skouris, the Greek head of the European Court of Justice. Apparently he never received a phone call. Greek media outlets aligned with New Democracy claimed with certainty that it would be former Euro-MP Ioannis Koukiadis, a friend of conservative leader Antonis Samaras.

Among the more respectable names floated is that of Nikiforos Diamantouros, the successful and well-regarded founder of the Greek ombudsman, who went on to preside over the European ombudsman. But it is the candidacy of Loukas Papadimos that serioius parliamentarians consider to carry the most weight in Europe. He has served as head of the Bank of Greece and went on to become deputy head of the European Central Bank in its first years of operation. His credentials and connections among Europe's governing elite are without doubt his strongest suit in managing a government whose chief aim is to gain credibility and implement a eurozone-sponsored bailout.

Banking sources tell The New Athenian that Papademos wants at least six months in office to get the job done of approving the second bailout and entrenching austerity reforms. He would likely bring National Bank governor Vasilis Rapanos as finance minister, and wants both socialists and conservatives to commit themselves to the cabinet politically by staffing it with top party figures.

A commitment to a government neither of them controls is understandably a big step for Papandreou and Samaras. But by pussyfooting around they have lost time and authority. Their grip on their own parties is weakening as a result. Papandreou wants to ensure that his legacy is protected and is increasingly acting like a man who does not intend to abandon the party leadership. That raises questions about whether he plans to attempt a comeback in the next election. Samaras refuses to invest himself too deeply in an interim government, fearing that his party will have lost too much of its political virginity if it goes into an election after spending six months in bed with the socialists. Then there are the concerns of party insiders. Papapandreou is under evident presure to ensure a political career for Venizelos. And many conservative hardliners seem to fear that Samaras has already compromised too much. All these pressures drove Papandreou in the direction of Parliament Speaker Philippos Petsalnikos, a socialist party traditionalist rather than a reformer. He would keep Venizelos as finance minister, protect Papandreou's reputation and give the interim government a sufficiently socialist feel to becalm conservatives' fears of too much hanky panky.

Petsalnikos was probably the man Papandreou had settled on when he mentioned an "institutional choice" in his farewell speech last night. The trouble was that by that stage he was said to have received irate phone calls from many in the party who saw the choice as insufficient to impress Europeans. The announcement was thus scuppered, and the farcical nature of the evening's proceedings were topped off by right wing Laos leader George Karatzaferis storming off in a huff over being sidelined.

Papandreou and Samaras must realise that the longer they spend thinking about their personal priorities and the pressure groups beneath them, the less likely they are to make a sound decision that benefits the country. They must also realise that this attempt to save the nation is really an attempt to save it from themselves. If Papandreou had had the maturity to realise he would need Samaras' help last year, they could have spoken on a better basis. If Samaras had had the maturity to accept Papandreou's ham-handed overture in June, we would never have breached the European taboo of discussing a Greek exit from the eurozone.

If Messrs. Papandreou and Samaras again botch this compromise, they will have killed the idea of a national unity government and brought Greece to the far worse option of immediate elections. That will put Greece's bailout at risk and point the country firmly in the direction of disorderly default. It is difficult to imagine the madness that will be released in an election campaign under such circumstances, but it is a fair bet that Pasok and New Democracy will be punished, possibly splintered, and ultimately unrecognisable as the parties of their founders. Given how poorly they have governed since the 1980s and particularly over the past decade, that would be fair comeuppance. But a culturally Western democracy that has enjoyed all the benefits of being saved from the communist bloc, won membership in Nato and the inner core of the European Union, should not have to plumb the depths of bankruptcy, social division and international disgrace to rid itself of political incompetents.


  1. John

    Thank you for providing well written and authorative insight as to what is unravelling in Athens.

    I feel truly sorry for the Greek people who mostly deserve better from these spoilt prima-donnas.

    Best wishes

  2. all this is interesting speculation, but, the Greek people have now seen, and shown the rest of Europe, that if they refuse to accept the blame for mistakes made and crimes committed in their name but without their consent, they can influence thing: bigwigs in europe started running round like headless chickens when Papandreou, for whatever reason,but probably because he saw he wasnt going to manage to impose draconian conditions on the rebellious populace, said he thought a referendum would be a good thing. That way the people could impose them on themselves, in which case they would possibly stop complaining and whining about being jobless broke and without hope for the future the way they so annoyingly keep doing.Finance whizkids can`t easily understand these fears- in the words of the greek proverb, "the well fed never understand the starving"
    Anything that has the effect of upsetting the powerful and making them on some level aware of the outrageousness of their demands Must be a blow struck for the power of the people against a system that has let them down and impoverished them.
    Iceland`s doing OK and is smaller, Argentina`s doing Ok and its bigger. Why can`t Greece do OK being medium? and why not prefer disorderly default to endless serfdom to the bankers ?
    Iceland put the crooks in jail. That`d be fun here, too.


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