Structural considerations for a prosperous Greece
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Prime Minister Antonis Samaras marked one year in the job on Friday by becoming the leader of what was effectively Greece’s fifth government in four years after Democratic Left’s decision to drop out of the coalition left his New Democracy party and PASOK as the two that remained from a previous partnership of three. The dire economic situation, the pressure of its lenders and the historical absence of consensus politics in Greece meant it was always going to be a challenging job. Samaras enters the second year of his premiership on an equally shaky footing.
Democratic Left’s departure had been in the making for some time. The three parties that formed the coalition in June 2012 did so knowing that Greece had been balancing on the precipice but their intention of moving the country to safer ground soon lost its potential to drive this three-wheeled vehicle on. Beyond securing Greece’s place in the euro and rebuilding trust with the skeptical troika, there was no grand, or even less pronounced, vision to spur the coalition’s efforts. As the drachma risk faded and lenders were placated, so the three-party government’s raison d’etre dissolved. It was replaced by friction fuelled by each party’s desire to stake its claim to any positive development and distance itself from anything negative. As the stardust was blown away, the political and ideological splits were revealed.
Samaras, feted by some of the international media as the man who turned Greece around, saw an opportunity to create more political space for himself and New Democracy. There were a series of minor differences with his coalition partners but also some major ones. The dispute over the anti-racism law, an issue that had nothing to do with fiscal targets, underlined that the common thread running through this government was wearing increasingly thin. It snapped with the closure of public broadcaster ERT. Samaras’s decision to ignore the objections of his two partners, Evangelos Venizelos of PASOK and Fotis Kouvelis of Democratic Left (DIMAR), tested the government’s tolerances to breaking point. Given that it was never the soundest of constructs, the coalition broke.
Kouvelis was left in an impossible position: continue and be regarded as a political stooge or quit and be seen as an opportunist who risked upsetting fragile stability. DIMAR had been under attack from the beginning of its involvement in the coalition. The left blasted it for kowtowing to Samaras and his troika-dictated agenda. The right, and a smattering of liberals, lambasted it for not acquiescing over a range of interventions and being too concerned about defending its left flank. Rather than fulfilling its goal of acting as the voice of conscience in the coalition, DIMAR ended up losing consciousness in its dizzying attempt to please all sides. There was always going to be a point where this political balancing act would tip over and had it not been ERT, there would have been another deal breaker soon enough.
Unlike PASOK, Democratic Left has little political capital to lose by quitting the coalition. Formed only a few years ago and with a modest showing at the ballot box last year, DIMAR has no aspirations of courting sizeable public support at the next elections. For PASOK, though, it’s a different matter. Like the spaceman who has touched down on Mars, Venizelos knows that if he steps out into the desolate environment, he will be deprived of the oxygen he needs to survive. PASOK in government, even with New Democracy, has a reason to continue. PASOK out of power risks being swept away into oblivion. Opinion polls have consistently shown the Socialists would struggle to get anywhere near double digit support in a general election and face a humiliation so substantial that there would be little reason for the party, let alone Venizelos, to continue. PASOK’s best hope is to cling on as part of the government and hope that it can cash in on any dividend from contributing to the country’s turnaround, if such a change of fortune materializes for Greece.
Similarly, the most effective way for Samaras to fend off SYRIZA and win back the New Democracy voters that have drifted away, particularly to the extreme right, is to remain at the head of the government that can say it guided Greece through one of its most turbulent patches in modern history. Having secured a form of stability over the past few months, Samaras now seems intent on being seen as the instigator of major changes, the Great Reformer: albeit one whose government has failed to make any decisive changes in the economy, public administration and justice over the last 12 months and which continues, for instance, to resist attempts to allow tax collection to be truly free of political intervention.
The way ERT was handled does not inspire great confidence. For all its ills, the national broadcaster was a fall guy for the failure to conduct genuine reforms elsewhere, such as the closing down of unnecessary public organizations and the evaluation of civil servants. In trying to pick the low hanging fruit, Samaras almost brought the whole tree down. Samaras’s supporters are attempting to portray his actions as the confrontation with the status quo needed to give structural reforms momentum. Events, though, speak of a kneejerk move of desperation that tried to cover up for a lack of ideas. Last Tuesday, ERT was taken off air so it could be replaced by a new broadcaster employing 1,000 people at the end of August. By Friday, Samaras was offering his disillusioned coalition partners the compromise of opening a transitionary service over the next few months. By this Tuesday, and with the Council of State ruling that Greece should not have been left without a national broadcaster, this had turned into an offer for a service with 2,000 staff. People are free to see this as the fallout from an act of bold political reform if they choose but it bears all the hallmarks of backpedalling prompted by ill-advised, on the hoof decision making.
Samaras says the time has come for him to “break eggs” in order to address Greece’s structural problems. He may be right but, to paraphrase George Orwell, when you talk about breaking eggs, at some point you also have to serve an omelet. A glance at the make-up, history and motivation of his government suggests an end-product is far from guaranteed. After five years of recession, three years of bailouts and months of political upheaval, Greece finds itself being governed by the two parties that have ruled since 1974 and which share the burden of responsibility for the country’s plight. Samaras’s biggest challenge is getting New Democracy and PASOK to confront their past and then undo a large part of it. He is likely to rely on a thin majority, depending on the stance that DIMAR takes. While this parliamentary advantage is workable, it is not a springboard for major structural incisions. Last November, seven PASOK and New Democracy MPs were ousted from their parties after failing to support the latest spending cuts demanded by the troika. The austerity package only passed with 153 votes. The support of these deputies is now vital if the government is going to achieve its goals, including overcoming an imminent fiscal gap. Can Samaras count on their unflinching support? He insists he will complete his full four-year term but at the moment seeing out a second year as prime minister would constitute a notable achievement.