Is Greece the next Egypt?

It seems that Greek farmers are getting ready to protest following the break down of talks with the government. If this does take place then they will become yet another group that has decided that the only way Athens will listen to their demands is to take action and in the case of the farmers this usually means blocking highways.

More and more employees are refusing to buckle down and accept the bitter medicine prescribed by the IMF, European Central Bank and the EU. Doctors are currently on strike and have been occupying the Ministry Of Health offices, public transport employees in Athens are continuing their strikes, teachers and chemists are also following the same route. Whilst the protest movement against massive price hikes in road tolls and bus ticket prices grows ever stronger and despite villification in the mainstream press remain popular.

On the other hand the ruling PASOK party has been reduced to fighting this growing tide of civil disobedience with a mixture of police crackdowns and slurs which are dutifully repeated and amplified by pro - government TV stations in their news bulletins. The reality, however,  is that support for Giorgos Papandreou is at an all time low and the loathing that ordinary Greeks feel for their politicans is so intense that PASOK cabinet members travel only under conditions of strictest security whereby itineries are often not announced till the last minute and public apperances are almost impossible unless those present are carefully vetted. Even then they are accompanied by hundreds of the quasi - military riot squad, known as the MAT in Greek.

While both PASOK and New Democracy parties have once more swept the Siemens and Vatpoedi corruption scandals under the carpet they insist that many of the protests are illegal and that the law should be applied. One can't be helpthink that if that were the case a large portion of Parliament would either be in prison or in exile with Tunisia's Ben Ali.

There is such a huge disconnect between rulers and ruled in Greece that I wouldn't rule out Egyptian style mass demonstrations  before the year is out. In both cases corruption, nepotism and incompetence can no longer be tolerated by people whose living standards are being depressed by those who live in the lap of luxury. It is a bitter irony that Greek MPs whose income is often more than 10,000 euros a month are demanding those who do not earn that in a year make sacrifices in the name of competiveness.How long this massive inequalities can be sustained is a matter of debate and given the intense feeling of anger and disappointment it is very hard not to see Greece as parched forest in which just one spark will set off a wildfire which will quickly rage out of control..

"ΤΑ ΦΑΓΑΜΕ ΜΑΖΙ" - "WE'RE ALL TO BLAME"

"ΤΑ ΦΑΓΑΜΕ ΜΑΖΙ" - "WE'RE ALL TO BLAME", originally uploaded by Teacher Dude's BBQ.

The report of the Siemens bribery scandal was released today and as expected Greek parliamentarians are working hard to make sure that even the most outrageous abuses of political power are swept under the carpet.

Δεκάδες Ελληνες υπουργοί συνιστούν την Siemens - Dozens of Greek ministers recommend Siemens

Δεκάδες Ελληνες υπουργοί συνιστούν την Siemens - Dozens of Greek minister recommend Siemens, originally uploaded by Teacher Dude's BBQ.

ξέπλυμα χρήματος μέχρι και στο μισό χρόνο.
Αυτόματη αναγνώριση όλων των κομμάτων


Launder your money in half the time or less!
Automatic recognition of all parties.

Yet another political scandal gets swept under the carpet by the Greek parliament. Today it was the Siemens corruption case involving accusations that the company spent millions in bribes to PASOK and New Democracy party officials in return for contracts for the 2004 Athens Olympics.

Το νέο λογότυπο της ΝΔ στην εποχή του Αντώνη Σαμαρά

The Machine is dead. Long live the Machine. Is it the end of business as usual in Greek politics?

Greece's political machine grinds to a halt, originally uploaded by Teacher Dude's BBQ.

For the best part of four decades the two major parties in Greece have relied upon their ability to provide jobs in the public sector as a means of winning public support and elections. For many “a place in the sun” as a civil service job is called in Greece has been a powerful motivator since such positions offer far more security, better pay and conditions than in the private sector where low wages and flagrant abuse of labour legislation are now the norm.

In the past when the economy was growing at rates that made Athens the toast of the European Union Greek governments were happy to ignore such abuses as employees could easily find work elsewhere and the State could easily fund the ever growing number of people on the public payroll. However, with access to cheap credit seemingly at an end and the IMF and EU breathing down its neck for cuts the country is about to undergo radical changes that will not only alter the nature of its economy but also the relationship between rulers and ruled.

Greece's creditors are insisting on a massive reduction in the size of the state and in particular has demanded that for every new hiring, five public sector workers leave. Given the size of the civil service in relation to the rest of the economy this involves a severe jolt to the labour market and is likely to lead to even higher unemployment as the private sector is also shrinking at an unprecedented rate and will not be able to absorb the tens of thousands of new job seekers. This, in turn will push down wages and purchasing power for those employed so further worsening the government's economic position as more businesses close and tax revenues plummet.

In the long term the inability of the ruling party to offer incentives to its supporters in the form of jobs will lead to a breakdown in the network of patron – client relations which is the lifeblood of the modern Greek political system. Whether nominally socialist or conservative the two largest parties, PASOK and New Democracy which have dominated parliament since 1974 have regularly used power to reward followers with state jobs.

While the leader of the right wing New Democracy, Kostas Karamanlis may have promised to reform the state and cut public spending his party followed the internal logic of the system and added employees to the public payroll on an unprecedented scale.

Similarly, while the socialist PASOK vowed to improve public services the reality was that while those working in the education and health rose steadily the quality of services offered dropped to the point that whilst the country had one of the worst school systems in Europe it employs four times the number of educators working in Finland, home to the world's highest ranking schools .

At first glance such moves may seem contradictory but they fit in perfectly with the logic of a political caste that despite marching under different ideological flags differ little in terms of day to day policy. The job of the ruler is to stay in power and once you understand that and leave aside political lablels everything else starts to make sense. If you cannot reward followers then the well oiled party machinery that can deliver votes quickly starts to break down.

The problem is that there are no longer jobs or contracts to hand out. The insistence of the IMF/EU/ECB troika has seen to that by standing tough despite Papandreou's claims that the new austerity measures will not lead to more civil service job losses. However, this hasn't stopped PASOK, state run TV channels and the government's supporters in the media in general from pushing the line that some will still be hired.

In the recent vote the PASOK candidate for the position of Mayor in Thessaloniki, Greece's second largest city committed himself to creating 50,000 new jobs. This at a time when Papandreou has been forced to cut 40,000 places. Even then the government NET news spoke of 8,000 new openings but failed to mention  that any “new” positions created will, in fact be filled by people transferring from other sectors of the civil service.

As the reality of the situation filters down you are likely to see a fragmentation of the party political scene as party members and functionaries jump ship either to join other parties or quit politics all together. The record low turn out in the latest local elections is just a symptom of this sea change in public life and is likely to intensify as the crisis worsens as Athens sits by on the sidelines unable to influence an economic policy decided upon in Brussels, Frankfurt and Washington.

Already Dora Bakoyianni, who was until last year a contender for the leadership of New Democracy has created a new party with the aim of challenging her former colleagues for the centre right vote. Such moves are likely to be replicated in PASOK if MPs and cabinet ministers fall out with the leadership or see that the party is doomed at the polls.

Does this means that the political scene is about to change for good? Probably not in the short term if the tactics and strategies displayed during November's local elections are anything to go by. Too many of the major parties' nomenclature are wedded to the present sysytem which has brought them power and personal wealth for decades to give it up without a fight. Instead they will keep on down the same road but with fewer and fewer resources to back up their promises. In the place of a corrupt, mismanaged political system which costs hundreds of billions you will have a corrupt, mismanged one that runs on far less money.

Greeks cast a vote of no confidence in present political system

At first glance embattled Greek government must have much to celebrate concerning the results of yesterday's second round of local elections. Despite predictions of an electoral meltdown (by me as well as others) the ruling PASOK party mananged to elect mayors in both the Athens and Thessaloniki, the country's second largest city and in both cases decades of rule by conservative candidates has come to an end. Boosted by these victories prime minister, Giorgos Papandreou went on national TV to declare that the results were a vote of confidence in the government's handling of the current financial crisis.

However, Papandreou's address was not aimed at the Greek electorate who decided not to vote in unprecedented numbers but the world's international money markets and in particular the IMF/EU/ECB troika who arrived this morning in Athens to discuss the terms of the nexrt stage of Greece's bailout package and the revised Eurostat figures for government deficits in 2009. Instead of 13.6% the deficit has now been estimated at 15.4% and uch a large readjustment coupled with falling tax revenues means that there is little chance will reach the goals set for the reduction of state debt in 2011.

On the one hand Papandreou has staked what remains of his political capital on promises that there will be no new austerity measures for pensioners and wage earners, yet with the numbers coming up and the prospect of Ireland set to seek EU money the odds are that the the leaders are likely to be in no mood to let Greek leaders off the hook as far as commitments to reduced spending are concerned. If new measures are introduced they will fatally wound Papandreou's standing in PASOK and confirm in the eyes of many Greeks the fact that he has lied to them repeatedly over the causes and consequences of the financial debacle Athens finds itself in.

Behind the initial good news (for PASOK at least) lies another story which threatens to put an end to business as usual for Greek political system as yesterday's vote saw an unprecedented low turnout which when coupled with the number of spoilt votes means that those elected across the country garnered less than a quarter of the popular vote. Whilst such low turnouts are par for the course in many European countries they represent a new phenomenon in Greece where voting figures have been traditionally high. For many media commentators the causes of the lack of voter interest reflect the breakdown of the complex web of patron client relationships which the two main parties, the left of centre, PASOK and the centre right New Democracy have used to retain power both on the national and local level.

With the pork barrels empty mainstream politicians have little to tempt voters apart from extravagant promises which are now being viewed with contempt by the public, convinced that in the current economic crisis the parties can offer nothing in the way of jobs or career advancement for themselves and their families. The claim by PASOK backed candidate for the head of Thessaloniki county council Markos Bolaris that he would create 50,000 new jobs in the city was just one of a plethora of widely optimistic campaign pledges that left the electorate indifferent knowing that instead of creating new positions the state in all likelihood will be forced to fire even more public sector employees.

In some districts such as in the Greater Athens area turnout was a mere 30%, meaning that most voters did not care who won the elections or believed that the winner would make no difference. This means that not just Papandreou but also Antonis Samaras the leader of the main opposition party, are failing to convince the bulk of the Greek population that they can change the country for the better. In the light of such a damning indictment of the current political system talk of victory and popular support of either party is just PR hot air designed to placate the party faithful. The reality is that Greece's semi  - permanent political caste are being faced with an unprecedented vote of confidence which they are rapidly losing. In the absence of  convincing mainstream political answers the road opens for groups and parties offering more extreme solutions to the nation's seemingly intractable problems.

In Greek elections everyone's a winner

Election night - Thessaloniki, Greece, originally uploaded by Teacher Dude's BBQ.

After weeks of campaigning, the first round of the Greek local elections is over and it seems the world's money markets are breathing a sigh of relief that the ruling PASOK government has decided not to hold early national elections. Normally, Wall Street, The City and the Frankfurt DAX pay little attention to the small time Hellenic politics but this time prime minister Giorgos Papandreou embarked on a game of high stakes poker and repeatedly declared that a crushing defeat for his party on Sunday would mean a new round of parliamentary elections, perhaps as soon as December. The election campaign quickly transformed from being a debate on mundane local issues such as how often garbage get collected and assumed the dimensions of a referendum on how the Greek government was dealing with its dire financial crisis.

The news, which was quickly labelled political blackmail by his political opponents sent the cost of Greek government borrowing on the world's financial markets through the roof with CDS's topping 900 points. A reaction that reinforced Papandreou's claim that if voters did not support PASOK candidates the alternative would be financial disaster and political chaos.

Whether the high stakes bluff really prevented an all out electoral rout for PASOK is debatable with polls showing that 2/3 of Greeks rejecting the PM's dilemma. However, the use of such dramatic tactics so early on in the current administration's term is indicative of the massive drop in support for the government and growing dissatifaction with the austerity measures which have hit middle and working classes especially hard. Evidence of the effects of the economic crisis can be seen everywhere from a thousands of closed businesses to the growing number of homeless begging in the streets.

Many families are struggling even to pay utility bills as witnessed by recent statistics published in the Greek press which show that 1 in 4 electricity bills have gone unpaid. In addition the country's largest telecom provider OTE reported that half a million bills are overdue.

The announcement of yesterday's results was greeted by all parties as a victory with Giorgos Papandreou announcing that it showed that the country was behind his government's attempts to save Greece from bankruptcy and so ruling out new elections. Antonis Samaras, the leader of the largest opposition party New Democracy hailed the vote as an endorsement of his party's anti – Memorandum stance. Aleka Papariga, leader of the Greek Communist Party noted that her party was the only won to increase its share of the vote .

Although the Left benefitted somewhat from the anti – PASOK protest vote it failed to make enough headway to upset the political status quo, similarly, the far Right LAOS party who at one point seemed poised to supplant the more mainstream New Democracy in opposition paid the price for its support of the government's measures.

However, the fact that so many Greeks choose not to vote has worried many political commentators. That voter turn out was at a historical low reflected the disgust and antipathy many feels for the political choices on offer. Amongst ordinary people there is a growing sense of dissafection with the two major political parties and families who have dominated Greek politics since the restoration of democracy in 1974.

In the capital, Athens turn out was especially low with nearly 60% choosing not to vote, a figure that is nearer 70% if spoilt and unmarked ballots are included. After a succession of governments on the right and the left promising and failing to reform Greece's underperforming state, fight corruption and bring development only party die hards remain convinced that those in power can bring about the much needed changes required if the country is to survive in 21st century.

Feeling betrayed and angry with the “politics as usual” attaitude of the larger parties some voters, especially in Athens have turned to more extreme alternatives. The neo – nazi Golden dawn party received over 5% of the vote in the capital as a whole though in some districts the figure was over 20% guaranteeing them a seat on the Athens municipal council

Show them the money - Business as usual in run up to Greek local elections

With Greece set to go to the polls on Sunday the pressure on prime minister Giorgos Papandeou to avert electoral disaster for the ruling PASOK party grows ever stronger and so the sudden slew of government promises to the unemployed, mothers and pensioners over the last few weeks. Today brought the promise of 1000 euros for every unemployed Greek in the form of coupons which can spent on training and education. In addition the state run ERT news service reported that mothers  with childen under 18 who have the requisite number of national insurance stamps will be still able to retire early and comes hot on the tail of Athens promise to give retirees an extra 300 euros in December.

Of course, none of this is new and very much marks business as usual as far as election campaigning is concerned. Just as PASOK has promised to fund training through coupons Kostas Karamanlis's New Democracy administration also promised to give every school pupil entering junior high school 450 euros which could be used to buy a computer in the run up to 2009 general elections. However, such campaign pledges have been seen by much of the press and public as an attempt to buy votes by promising one -  off payments in return for support on Sunday.

The coupon scheme in particular smacks of last minute panic and provides a classic example of how the Greek economy got into its present mess. Public money is desperately flung around in order to bolster support for the party in power leading to huge costs and minimal benefit for the country as a whole.

The idea of giving those out of work the chance to upgrade their skills is based on sound logic, at least at first glance but is doomed to failure for a number of reasons which the government is probably well aware of.

1 - First and foremost where is the money going to come from? Even if the EU provides 50% of the funding, with the official unemployment rate at 12% and rising fast this means hundreds of millions will be need to be spent to train the unemployed. Currently, the country is having difficulty raising money to pay basics such as medical supplies to hospitals, back wages to government employees and even heating in schools.

2 - Who is going to provide such training and under what oversight? Much of Greece's private education and training  is subject to few checks and inspections (I worked 20 years in various language schools and never witnessed a single inspection). Given such lax rules the possibility of abuse and fraud is ever present. The reality is that many such institutions only survive through connections with corrupt local officials and politicians who mandate who gets sent where. In such an environment the chances of getting the high quality training most modern economies demand is limited.

3 Lack of training and education is not the cause of the present unemployment crisis.Indeed unemployment is highest amongst the young who have far more qualifications than previous generations. The problem is not lack of skills but lack of businesses that can utilise the massive pool of talent already available.Put bluntly, the economy can only absorb a fraction of the educated youth entering the job market every year.

4 The availability of coupons will push up prices for those who do not qualify and wish to do training courses. The example of the one lap top per student scheme introduced last year by the conservatives is a recent example of how the private sector raised prices of computers to make the most of the coupon scheme implemented. While it allowed students and parents to buy PCs it also pushed up prices meaning that everyone else wanting to buy such equipment paid more.

5 As with the measures promised mothers and pensioners it is a one off measure that does not deal with more fundamental issues such as what is going to happen to the present wave of people made redundant when their unemployment benefits run out in six months time.

The economy is in free fall and with two businesses closing for every one that opens the future for Greece's most vulnerable groups looks bleak with a bankrupt, mismanaged state leaving the poorest to fend for themselves. Likewise the electorate is rapidly losing faith in any political party to offer a way out of the impasse Greece finds itself in and promises of yet more money and funding is convincing ever fewer voters.

Will Greece go to the polls in December? The elections no one wants to win.

Greek elections 2007, originally uploaded by Teacher Dude's BBQ.

In contrast to previous years the run up to the local elections in November is a lacklustre affair without the usual frenzy of electioneering that marks Greek politics. In the streets few people are particularly riveted by the choices on offer and despite a concerted effort by the media to inject drama into the event many have turned their back on politicians, and instead are concerned with more immediate worries such as paying the bills and making ends meet.

No one in the present political set up, either on the left or the right set up has been able to turn an intense feeling of voter dissatisfaction into concrete electoral support. Obviously, the great loser in all this is the centre left PASOK party led by prime minister Giorgos Papandreou whose popularity has nose dived in the wake of the austerity measures imposed at the behest of the EU, ECB, IMF troika. However, the main opposition party, the conservative New Democracy has been unable to made much headway in the polls tainted as they are by their role in the country's economic meltdown. Even their newly elected leader Antonis Samaras's populist rhetoric has failed to convince many other than the party faithful.

On the other hand smaller parties of the left and right of the two main parties are also struggling to generate voter interest. On the far right LAOS, led by Giorgos Karatzaferis has failed to poach votes from New Democracy in the numbers it was expecting, the result, in part of its parliamentary support of the PASOK in passing the legislation and measures demanded by Greece's lenders.

Nor is the picture much better on the left with people wary of the Greek Communist party's old school ideological stance and its unwavering allegiance to the state run socialist economic model favoured by the Soviet Union in its heyday. The other reformist left wing coalitions languish in the polls, internally divided and struggling to get their message across in the media.

Underlying the growing indifference of Greek voters to the choices on offer is the realisations that whoever is in power their ability to change the present economic climate is limited as virtually all major economic decisions taken have to be okayed in Brussels, Strasburg and Washington. In addition an even deeper feeling of distrust of those in power comes from the deeply rooted idea that the country's rules are above the law and so free to abuse their position. This is hardly a new innovation and one that is central to modern Greek mindset but what has changed is the fact that the political caste's greed and incompetence has brought the nation to the edge of the abyss and so is no longer considered the acceptable price of getting things done.

Such extreme notions are reinforced by parliament's handling of recent corruption and bribery scandals involving the cases such asVatopedi Monestary, Siemens and the 2004 Athens Olympic games. These are just a few of the dozens of scandals that have racked Athens over the last few years and yet despite endless investigations not one politician has been convicted of a single misdemeanor, let alone spent time in jail. Many ordinary Greeks have come to the conclusion that whoever is in power, nothing will change and that once in charge the first priority of politicians is to line their own and their family's pockets at the expense of everyone else.

Given such cynicism and anger political analysts and leaders both left and right are worried about how this backlash will effect the vote in November and how the political landscape will be changed. Already the prime minister has warned that a major defeat for his party may result in the country going the polls again in a round new parliamentary elections. The national daily, Nea also published reports that Papandreou is considering a snap election as soon as December 12th in such an eventuality.

For Papandreou and many others the November elections are in reality a referendum on the bailout package and should his party lose badly that would require his government seek a new popular mandate. On the other hand political commentators have interpreted his words as political blackmail, a high stakes bluff aimed at getting reticent PASOK voters to the polls. If so, the costs of such a strategy are high indeed with the world's money markets jittery over the prospect of a change in government in Athens. Over the week Greek CDS's soaring once again above 800 points reflecting the financial world's unease at the prospect of a vote.

If Greece does go to the polls in December, both Papandreou and Samaras face the same dilemma that whoever wins is in no position to change the basic parameters of the current bailout deal and therefore will be associated in the popular imagination with job losses, painful spending cuts and a severe economic downturn.

The trick will be how to run a credible campaign yet not win, a feat the previous New Democracy leader, Kostas Karamanlis pulled off during his lukewarm campaign in 2009. Faced with immediate financial meltdown Karamanlis called early elections is September much to the annoyance of members of the party who wanted to wait till Spring 2010. However, they were unaware of just how dire the country's finances were and that by running early and losing New Democracy would still remain a coherent political force that could present itself as a credible alternative to PASOK once they had dealt with the financial mess at huge political cost.

Like the card game Black Maria in which the aim is to foist the Queen of Spades unto your opponent both main parties are supposedly gearing up to slug it out at the polls whilst secertly hoping that they will not have the misfortune to be in power.

Greek PM's press conference fails to convince voters

Greek prime minister, Giorgos Papandeou (left) leaving the St Demetrios cathedral - Thessaloniki, originally uploaded by Teacher Dude's BBQ.

Last night Greek prime minister took part in a Q & A session with journalists from the country's largest TV stations. The decision to organise such an event in the run up to the local elections in November was criticised by opposition parties who consider that the Papandreou is campaigning on behalf of his beleaguered PASOK party who have been trailing in the polls, affected by the harsh austerity measures that have seen living standards plummet as job losses, higher taxes and galloping inflation have combined to make for a perfect storm for those on lower incomes such as the unemployed and pensioners.

The harsh new economic reality facing Greeks can be seen in a slew of reports that show that many household are now struggling to pay basics such as power and phone bills. The state run electricity board says that 1 in 4 bills are overdue whilst the OTE telecommunications corporation has 500,000 unpaid accounts to deal with. Even in Greater Athens area, which one of richer parts of the nation 1 in 11 are receiving food handouts via breadlines according to research carried out by the Athens University of Economics recently. In Greece's second city, Thessaloniki, home to over a million nearly half the population is living on either savings or loans whilst another 40% say that they can barely make ends meet.



Even consumption of basics such as bread has dropped by 30% whilst other areas of the economy such as real estate and car sales have ground to a virtual halt. The Greek chamber of commerce says that 4,000 small businesses are closing every month with thousands more being added to unemployment figures.

With such a bleak outlook Giorgos Papandreou decided to hold a press conference to set out his party's policies and to explain to the nation what he believes has to be done to save Greece from bankruptcy.

The interview which was carried out by seven journalists lasted two hours and was followed by millions of viewers nationwide. In the first round journalists were allowed to ask one question and one follow up. A recipe which allowed the PM plenty of wiggle room and produced a predictably sonorific result as Papandreou was free to simply set out party positions that have long been made clear in previous briefings. While the questions were hard hitting, the lack of follow up meant they were easily sidestepped with waffle and set speeches.

The second half of the interview proved more interesting with reporters able to pursue points made and get the prime minister to do more than simple PR.



However,the basic tenet of Papandreou's message remained the same that the current crisis was the results of years of fiscal mismanagement that the previous New Democracy administration had failed to take seriously and that if Greece did not have any other choice but to implement the painful measures set down by the EU and IMF. He also made it clear that his government sees the forthcoming elections as a referendum on the measures intimating that if PASOK suffered a serious defeat then this would be seen as a loss of the popular mandate necessitating national elections in the near future.

For Papandreou the choice is clear; either accept the cuts in public services and wages set out or vote for the opposition New Democracy party led by Antonis Samaras whose brand of populist rhetoric is full of heat and passion but light on concrete proposals on exactly how different his right of centre party would deal with a 400 billion debt load without severe cuts in public spending or higher taxation.



Yet despite growing dissatisfaction with both major parties it seems business as usual with both sides making lavish promises to voter in order to persuade people to support them. The ruling PASOK party has vowed to help local income families and farmer with extra funds before the end of the year, though where exactly the money is coming from is unclear especially with so many employees of the state run organisations and pensioners who have been waiting months to be paid. Next week heating oil distributors have threatened to suspend deliveries from 1st November in protest over delays over the return of tax payments promised earlier. Likewise hospital report running low on basic supplies after pharmacutical companies stopped taking new order until the government pays outstanding debts, some going back years.

However, the 600lb gorilla in the room is the possibility of still harsher cuts when Eurostat revises Greek debt figures for 2009. The organisation delayed publishing figures citing the need for more time to untangle Greece's often tangled web of public spending statistics until 15th November just after the second round of local elections. This has been seen in many quarters are an attempt not to upset PASOK's election chances still further with more bad news. On the one hand Papandreou has stated on a number of occasions that there will be no further measures for wage earners and pensioners whilst European Commissioner Olli Rehn has made it clear that higher than expected debt load will mean more sacrifices on the part of Greece in 2011.

Attending celebrations in Thessaloniki today Giorgos Papandreou was met with boos and jeers by some worshippers outside the Saint Demetrios cathedral and was quickly whisked inside the building with church bells ringing in order cover the sounds of protests from TV crews covering the event. Hundreds of riot police were also on duty in the surrounding area ready to keep disgruntled state employees at a safe distance while people shouting anti-government slogans were swiftly confronted by uniformed and plain clothes officers in the crowd.

Athens faces prospect of yet more austerity measures

Giorgos Papakonstandinou - Greek finance minister, originally uploaded by Teacher Dude's BBQ.

On Thursday the European Statistical agency Eurostat will announce revised government debt figures for Greece in 2009. Despite being in power for over year the left of centre PASOK government headed by Giorgos Papandreou has still not been able to produce a clear idea of how much Athens actually owes.

Years of creative accountancy coupled with official incompetence means that no one is quite sure what the state has spent over the last decade. Today's Naftemporiki newspaper article lists measuresthat have been used to hide the true extent of debt load including the credit swaps organised by Goldman Sachs as well as other tricks such as delaying health service debts for years and the creation of "special funds" totalling billions of euros which were not included in budget figures.

On the other hand the heads of Greece's two largest parties are engaged in name calling in the run up to the November local elections with both prime minister Giogos Papandreou and head of the opposition New Democracy party, Antonis Samaras exchanging jibes over who is to blame for the current economic crisis.

On the one hand claims by Papandreou that he had no idea of the depth of the country's economic woes is proving hard to sell especially in light of claims by both former German finance minister, Peer Steinbrueck and Eurogroup leader, Jean Claude Juncker that he was perfectly aware of the scale of government debt before he took -power in 2009.

On the other hand Samaras who served as a cabinet minister in the New Democracy government is claiming that his party left the country in good economic shape and that it is PASOK mishandling of the economy which produced the current crisis. A claim also challenged by Juncker's claims that fellow European leaders warned Greece about the consequences of its debt load in 2008 but which then prime minister, Kostas Karamanlis chose to ignore.

What we have unfortunately is a political clash in which both sides are seemingly unwilling to accept blame for the dire state of the economy and who indulge in populist mudslinging.Despite the severity of the situation the election campaign seems to see the parties operating on a business as usual basis.The consistent pattern of lying and evasion is undermining what little credibility the Greek political system has in the eyes of many voters who give little credence to political party claims and counter claims.

The only thing most people are sure about is that their living standards are rapidly dropping with 92% of people in the greater Athens area saying they have reduced spending even on food. As the political elites argue over who is not to blame one in three young Greeks are unemployed and the country is looking at even harsher measures which will make this winter one of the most difficult in living memory.

Fiddling while Athens burns - Greek media's love affair with the political establishment shows no sign of ending

It's a measure of how far the Greek political system and its supporters in the local media are out of touch with the rest of the country that the recent uproar over the remarks by Jean Claude Juncker,  head of Euro Group that been the subject of some much air time and print columns during the last few days. According to an off the record remark made by Juncker in Washington a Greek prime minister told him that Greece was a country of corruption, a revelation on par with learning that the French eat rather a lot of cheese or that it can get awfully cold in Russia.

The fact that Greece has one of the highest corruption indices in the European Union or that the present PM, Giorgos Papandreou made much the same comment after taking power in 2009 seems to have been ignored by  the Greek political establishment and the country's media who went into a feeding frenzy in their attempts to identify which Greek PM had made such an outrageous statement. Kostas Simitis, head of the 2000-2004 PASOK run administration, Kostas Karamanlis, PM from 2004 till 2009 and finance minister Giorgos Papankonstantionou on behalf of current PM Giorgos Papandreou all rushed to say that they had said no such thing. (Juncker later made a statement saying that it was Giorgos Papandreou)

And so it has gone on, with endless speculation in the press as to exactly let the cat out of the bag. The fact that the Greek state is corrupt, of course comes as absolutely no surprise to anyone living in the country. Indeed Transparency International calculated that Greeks spent an average of 1355 euros in bribes in 2009.
Actually, the problem is not that the Greek political establishment turns a blind eye to corruption (see the Vatopedi land swap scandal) but rather everyone now knows. Worst of all, foreigners know just how venial Greek politicians are. How embarassing when one is putting one's best foot foward in Brussels, Strasburg or Washington that the rest of the world sees you as little more than a robber baron. For people as image conscience and ego driven as Greek politicans in power this comes as a terrible blow.

Perception, rather than reality is everything which is one of the reasons why the country is in such as mess. Why bother attempting to make difficult political decisions when all you need is a handful of IOUs and promises which you may or may not honour. Even now the opposition New Democract leader, Antonis Samaras is touring northern Greece in the run up to November's local elections giving his word to open factories, fund development and the like knowing full well that he would have no more financial freedom than the current PASOK administration to act. (The fact he was a cabinet minister in the previous government which ran up such huge debts seems to have slipped his mind at present).

Such a cavalier attitude to the truth also explains the chronic distrust of the average Greek concerning any promise politicians make. Indicative of this is the refusal of truck drivers to end recent industrial action despite promises by the government to discuss their demands. It wasn't until the proposals were put in writing that truckers agreed to stop strike action. Of course truck drivers know that even written reassurances mean little to politicians but it does give them a little less wiggle room.

But while the country's TV talking heads and their partners in crime and print have talked endlessly about what Juncker's statement means the country slides ever deeper into depression (both financial and psychological) with schools unable to pay fuel bills, hospitals running out of medical supplies and and an angry electorate bracing itself for a winter with 30% hikes in heating costs. For many patience is running out with the endless self - referential charade of the current political setup.

Just one more thing to consder, though when considering the role of corruption in the current financial debacle is that Iceland, whose per capita debt is even greater than Greece's, was ranked the world's 7th least corrupt government (Athens came in at 71) in 2008.

One may smile and smile and be a villain

Αντώνης Σαμαράς - Antonis Samaras, originally uploaded by Teacher Dude's BBQ.


As leader of the main Greek opposition party, New Democracy, Samaras in campaigning hard in the run up to the local elections in November. The vote is likely to be a crash test for the country's two largest parties who between them have dominated parliamentary politics for the last three decades and are seen by many people as the cause of many of the financial woes Greece faces.

Despite the fact that until 2009 the conservative New Democracy party, of which Samaras was a senior member of, the party is insisting that they had nothing to do with the massive deficicit that triggered the EU/ECB/IMF bailout and the concurrent austerity measures which have brought the economy to its knees.

According to Samaras the fact that his party lied consistently about Greece's debt load (stating repeatedly in early 2009 that it would not exceed 4%) is nothing compared to the revelations that then opposition leader, Giorgos Papandreou knew perfectly well that the figure was nearer 15%. A fact that didn't stop Papandreou making a plethora of election campaign promises that he knew his PASOK party woud not be able to fulfill when it took power.

Faced with the choice between two failed political entities whose leaders have repeatedly mislead the electorate and continue to indulge in a frenzy of barefaced lies and deception it's not hard to predict that the turn out for the elections will reach an all-time low. On the one hand New Democracy is selling the idea that it has a secret plan to get the country out of recession, a lie so bold that one is reminded of Richard Nixon's secret plan to end the war in Vietnam during the run up to the 1972 elections. 

On the other hand New Democracy party hacks are flooding the airwaves with claims that the country's debt load is a largely a figment of PASOK party's imagination, deliberately inflated to make their conservative predecessors look bad in the polls. This must come as quite a revelation to the EU statistical agency, Eurostat which has repeatedly found yet more hidden state debt since it arrived and is beefing up its Athens team in order to figure out how much Athens really owes.

On the other hand prime minsiter Papandreou has repeatedly stated that PASOK will not introduce new austerity measures even while stating to the EU/ECB/IMF trioka that his government will take any and every step to meet the conditions of the bailout plan.

What neither party seems to have understood is that in our wired society the idea of internal and external audiences is rapidly disappearing as people use the internet to quickly gather and publish news whatever it takes place and in whatever language it is published. Yet old habits die hard and the temptation to promise anything to whoever you have in front of you without taking into consideration future consequences remains a key ingredient of Greek political rhetoric.

How did it come to this? The roots of the current Greek economic crisis

Looking into the abyss - Giorgos Papandreou, prime minister of Greece, originally uploaded by Teacher Dude's BBQ.

This article was originally written last February but I thought that I would post it again since most of the points remain valid and especially in light of the fact that Eurostat has warned that Greek debt numbers are to be revised upwards for the years 2006-2009.

Much of the current media coverage over Greece's debt crisis is focused on how the country is going to raise the funds necessary to cover the $400 plus billion it owes creditors. Scenarios concerning the role of Germany and/or France in bailing out Athens are discussed constantly on national TV and in the newspapers and what will need to be done in order to convince Greece's European partners to cover cost of lending the billions needed just to keep the country afloat.

However, whatever happens in the coming months the question of what Greece does next in a world in which its financial choices are closely scrutinised by whatever monetary institution steps into the breach to save the country from bankcruptcy has not been addressed.

The prospect that an elected socialist government will be obliged to implement a conservative fiscal policy controlled by unelected officials raises all kinds of political dilemmas which Giorgos Papandreou's PASOK administration will have to deal with in the immediate future.


Papandreaou will be forced to challenge directly exactly those public sector trade unions which have put him and PASOK in power. In addition he will be forced to cut areas of spending which have been used by successive government to ensure political support.


The prospect of a place in the Greek civil service has long been the source of political power for parties on the right and left of the political spectrum. This combined by the promise of public sector contracts to economic elites in the private sector form the basis of the country's feudal political structure and in no small measure contributed to its present woeful economic situation.


Instead of land and power being swopped for military service the present Greek version of feudalism sees votes and political support flowing up the system in return for public funds and the influence it garners flowing downwards. It is a structure of patron-client relations which links the heads of the major parties to the humblest villager and is the lifeblood of modern Greek politics.


The ebb and flow of such influence and the complicated web of personal, familial and political relations that it engenders helps explain much of the apparent confusion and chaos of modern life in Athens and other major cities. Much of the country's infrastructure is divided into a patchwork of competing fiefdoms that have formed as a result of the present political setup. Each participant owes their position and continued economic well being to maintaining the right connections with those above and below them in the hierarchy. In such a system qualifications, skill, effectiveness and ability play second fiddle to being able to stay in with those who are in a position to advance your career.


Another by - product is chronic inefficiency and confusion as its duty of every fiefdom to ensure that it gets the maximum amount of resources in order to guarantee its survival. Co-operation and cost cutting mean giving up exactly those resources one needs to make sure that money and influence continues to flow to those whose support you need.


The effects of this system also affect the private sectors as the companies competing for contracts with the public sector, a huge player in the Greek economy, do so on the basis of political, personal and family connections. In some cases this takes the form of outright bribery but many others there is the mutual understanding that favours given must at some point be returned. It is no coincidence that many of the country's richest men have media wings attached to their business conglomerations which can be used to promote or attack parties and politicians .


The upshoot of this unholy alliance is that crony capitalism and "licence Raj's" dominate the economy stifling innovation and competition. There is little incentive to cut the cost of your product or improve the quality of your service in such a system. As a result Greek companies will dominant nationally rarely have the expertise to break into developed markets where transparency means that methods used at home cannot be employed.


Whilst foreign observers often point the finger of blame at Greece's powerful public sector unions for lack of competiveness and low productivity the reality is that pay in the private sector has remained stagnant for years and that much critised worker protection laws are rarely applied to non - public sector businesses. Despite a pool of cheap, educated labour which can be hired and fired at will the private sector has done little to prepare the demands of a modern globalised economy and instead reaped the benefits of European Union's lowest wage while raising prices far beyond the rate of inflation safe in the knowledge that an invisible web of cartels and unofficial "gentlemen's agreements" mean that they will not be faced with any real competition.


It is difficult to see how an economic and political system run on such principles can reform itself in the kind of time scale being proposed by Europe and controlled by exactly those people who helped run the country into the ground in the first place. The obvious answer is that Greece will not be able to implement the kinds of reforms being demanded and that in trying to square the circle the country will tear itself apart as different social and economic groups turn on each other to preserve a semblance of their priviledges and power.


Already there has been a growing wave of political violence with terrorist attacks now forming a staple of the daily news. That combined with a burgeoning crime rate form the background to a society that appears to be gradually coming apart at the seams.

http://www.nowpublic.com/world/greece-morning-after

Despite crisis business as usual for Greece's politicians

Κώστας Καραμανλής - Costas Karamanlis. Prime minister of Greece, originally uploaded by Teacher Dude's BBQ.

Towards the end of the ex - Greek prime minister, Konstantinos Karamanlis's second term yet another corruption scandal erupted which would ultmately be the death knell for the ruling conservative New Democracy party in the 2009 general elections. After less than two years in power the party founded by his uncle, also called Konstantinos Karamanlis in 1974 lost power to the left of centre PASOK party lead by Giorgos Papandreou, son and grandson of previous Greek PMs Andreas and Giorgos Papandreou.

The revelations that senior New Democracy officials had collaborated in a highly dubious land swap in which a remote lake in the north of Greece was exchanged for a large piece of prime Athens real estate outraged public opinion and ultimately ended in Karamnlis calling for early elections.

The details of the deal which featured the Greek Orthodox monastery of Vatopedi are as convoluted as they are legally dubious. However, an insightful article in Vanity Fair by Michael Lewis paints a lucid, if dark picture of corruption and lawlessness at the heart of the Greek political establishment. According to Lewis it was exactly the ability of polticians to operate without oversight or restraint that helped create the present financial crisis and massive debt load.

Yet even as the country set to enter its third year of recession with the prospect of still more cuts and the economy set to shrink even further the the political establisment in Athens are still playing the same constitutional games, seemingly untouched by the financial maelstrom embracing Greece. Evasions, denials and endless parliamentary manouevering still rule the day and even after the appearance plethora of evidence indicating wrong doing the former prime minister of Greece can say that neither he, nor his administration have any repsonsibility for either the Vatopedi scandal of the dire state of Athens's coffers.

It would be nice to think that by ousting a corrupt government Democracy has once more won out. The reality of the situation is that one corrupt poltical oligarchy has been replaced by another. The current rulers of Greece, PASOK have a rich history of scandal and corruption which has been not resulted in a single conviction, The Sieman's bribery case and a list of pay offs by other German firms to PASOK officials in the run up to the 2004 Olympic Games has also been put on the parliamentary back burner, to be quietly dropped at a future date.

Given that the current political scene is full of exactly those officials who presided over the creation of Greece's present woes its is very hard to have faith in their ability to not repeat the mistakes of the past. In all probability the future holds more of the same just on a smaller scale reflecting the country's dire fiancial state.

It's a bitter irony that Kostas Karamanlis was elected on a reform ticket by an electorate fed up with the corruption of the previous PASOK government lead by Kostas Simitis. His promise to clean up politics and reform the dysfunctional Greek state stroke a chord with voters who hoped that the right of centre New Democracy party would change the status quo. As history has shown the differences in ideology between Greece's two largest parties are nothing compared with their inability to resist the financial temptations offered by power.

Faced with the failure of both PASOK and New Democracy to control the greed of their own officials the local elections in November may prove to be the beginning of the end of the current Greek party political scene.

Stress test claims one Greek bank

The National Bank of Greece, Thessaloniki branch, originally uploaded by Teacher Dude's BBQ.

The much hyped stress test of Europe's banking system is intended to ally fears in the world money markets over the ability of the continent's financial system to weather a meltdown. In the end just seven of the 91 banks failed to make the mark, five Spanish, one German and one Greek.

Athens is claiming this as proof of the rude health of Greece's banking institution and the state run TV channels are running the story as if it was a 5-1 victory in the World Cup. However, by strange coincidence the one institution that failed the test is the state controlled ATE (Agricultural Bank of Greece) which is also responsible for hundreds of million in loans to the country's two largest parties. The ruling PASOK party lead by Giorgos Papandreou owes 98,6 million euros whereas the opposition New Democracy party which was in power till last September has debts of 105 million.

In addition the parties also owe sizeable amounts to Piraeus bank which narrowly escaped the same fate as ATE. It seems strange that the two banks which fared worse in the stress test are the one so intimately associated with parties in government.

A mind more suspicious than my own might come to the conclusion that ATE and perhaps Piraeus have been used as a private piggy bank by those in power and that much of ATE's present weakness comes from the Greek State's chronic inability to maintain a distinction between the needs of the Party (whatever ideological colours it purports to fly) and the needs of the country.

Do you feel grateful? You've got to be kidding, right?

Just got off the phone with the BBC. I got a phone call earlier today asking if I would like to take part in a discussuion on the their Have Your Say programme and I said that I would be delighted to take part, especially after the BBC employee me asked me why Greeks were not feeling more grateful about the recent bailout deal. People here have a number of reactions to the EU-IMF brokered deal but gratitude is certianly not one of them. Anger, outrage, frustration and fear are far likely to be quoted but no one, and I mean no one I have heard discuss the matter considerd the current situation something to celebrate.

This seemed to puzzle some of the other participants on Have Your Say and many of the listener who sent in emails. Perhaps this stems from the fact apart from the raw economic facts people living outside Greece have only the vaguest idea of how things work here and how big a shock the present crisis is to people throughout the country. As I said to the presenter imagine being mugged and then being asked to contribute to your mugger's legal costs, which is basically what many Greeks are feeling at the moment.

Whilst everyone here is aware of the extensive faults of the Greek government (we live them daily) and the problems with graft and waste the the sheer size of the deficit created by the past two government's came as much as a surprise to ordinary people here as it did to the world's financial markets. Now it seems that the two major parties have not just sold off the family silver but mortgaged the future of the whole nation for at least a generation the mood of seething anger lies over the country like some kind of toxic fug.

How did it come to this? Where did all that money go? How come the country owes so much? are just some of the questions on everyone's lips. Now those who are responsible for getting the country into this "death spiral" as the BBC put it are now calling for a joint national effort to pay off an impossible mountain of debt. I swear that if the leader of either PASOK or New Democracy made a public appearence at the moment they'd be lucky to escape a lynching by a baying mob.

A measure of the fear that the present administration feels over the strength of popular resentment that it announced the fact that the country was going to go to the EU-IMF from the island of Kastellorizo which about as far away from Athens as it far to get and still remain in Greece. This is akin to Gordon Brown announcing the most regressive social measures in a generation from the Outer Hebrides.

Judgement day for Greece

Today Greek prime minister will announce the full details of the deal that it has negotiated with the EU-IMF-ECB over the conditions of the bailout package. So far the media here have been coy about saying what exactly the agreement contains but the general consensus is that it will include painful cuts across the board in terms of pay and conditions in both the private and public sector. In addition there are likely to be large job cuts as many civil service positions are axed.The most likely tactic will be a change from permanent contract to fixed term ones which when they run out will not be renewed.

As well as cuts in income Greeks are also going to be hit by yet another round of rises in VAT and other indirect taxes (the second in six months). Already the local public tranport authority here in Thessaloniki has announced 20-100% increase in bus ticket prices.

As you can imagine there is a lot of popular anger from people affected by these measures and this is likely to fuel a wave of protests and strikes in the coming months. Already the Greek communist party (KKE), which is the third largest has delared that it will fight the austerity package and is calling on workers to raise up. Other groups are also oganising different ways to try and fight against the government's plans with direct action and protests which have been scheduled for the coming week.

While everyone in Greece agrrees that the present situation is dire and things cannot continue as before they are bitter and angry that the very same politicians who failed to avert the present economic crisis either due to incompetence, corruption or indifference are now calling upon ordinary Greeks to make sacrifices. This would be a steep order for any country even in the best of circumstances but giving the extreme corruption of Greece's ruling political and economic nomenclenture none of country's leaders retains the moral stature necessary to convince people to take the difficult steps that lay ahead.

THe ruling PASOK party headed by Giorgos Papandreou has done little to clean up ts own house when it comes to graft and influence peddling and despite court cases in Germany and the UK, the scandals its senior members were involved in during their last term in power have yet to result in any criminal charges being brought against those involved here. On the other hand the newly elected leader of the defeated New Democracy, Antonis Samaras heads a party whose members presided other one of the worst periods of corruption in Greek history yet few have even been fired let alone been the subject of a court trial.

What people are enraged about is that such incompetence and corruption is likely to be repeated since no one is in a position to put a stop to the pevious abuses of power. The judiciary is little more than an extension of whoever is in power and can be ignored at will while the media is suppine in the face of the temptation of rewards from those in power in the form of state jobs, contracts and advertising revenue. Sometimes it seems that the news here is a choice between a Hellenic version of Fox News or Pravda, with very little objective reporting.

The clashes witnessed in Athens during May Day are likely to be repeated in the following days as the general strike this week is going to a catatlyst for people's rage and frustration.

Greece and the IMF - The Day After

The Greek government is currently negotiating the details of the EU-IMF brokered emergency loan pakage and as a result TV stations are covering the story non-stop, much in the manner of some kind of natural disaster with breaking news interrrupting regular programming. Whatever the final details are the reality of the situation is now painfully obvious to everyone.

The country is, in essence bankrupt and now faces the prospect of massive economic dislocation with huge cuts in wages and most likely a sharp rise in unemployment. Local newspapers are talking about one million without work (Greece has a population of 11 million) before the year is out.

The question on everyone's lips is, "How did it come to this?" People are still in a state of shock and there is a numbness as if Greeks cannot quite fathom what is happening to them. But beyond that there is a feeling of intense anger that the ruling political parties have betrayed the country and left its inhabitants at the mercy of outside forces. Soon, once the initial dismay has worn off and the effects of the crisis appear in wallets and pockets there is going to be a massive backlash against both Greece's two largest parties, PASOK who and New Democracy who swopped places in last year's general elections.

Already there have been protests and marches in many cities as as the weeeks go by these are set to increase in size and frequency. Buses full of riot police are now to be seen regularly in city centres and few believe that the demonstrations will remain peaceful. There is no way the current political establishment can ask sacrifices of people when they themselves have been mired so long in a constant tangle of corruption and scandal. Neither PASOK nor New Democracy seem to think that the Greece's plight is their fault and simply feel that it is business as usual as far as campaigning goes. I think that they have seriously misread the feeling of the country and are likely to be the victims of this backlash in the local council elections this year.

It will be interesting to see how the current PASOK government manages to deal with fact that they can no longer buy support through the traditional method of handing out contracts and jobs to supporters. Once the intricate web of patron-client relationships starts to fray what will take its place? For decades both the major parties have used such tactics to shore up their electoral base and ensure powerful "friendships" with the country's economic elites. With the system now under close scrutiny from both the IMF and the EU political leaders will have little to offer apart from promises, which have come to mean virtually nothing to most Greeks.

What we are witnessing is not just a economic but also a moral bankruptcy with a deeply corrupt and amoral political apparatus collapsing under the weight of its own inadequency.

For more on the background to the present economic crisis check out this previous post which analyses its roots.

A plague on both your houses

Just a quick post then it's off to pick up Lydia. There's plenty happening on the political front here in Thessaloniki with both New Democracy and PASOK holding party conferences here. Actually, despite what the Greek media is saying the PASOK conference is being held 100km outside the city in Halkidiki. Party officials know full well that any appearance by Giorgos Papandreou in the city would provoke massive street protests. On the other hand the ND conference featuring Kostas Karamanlis is taking place in the centre but you can be sure that there will be enough officers there to police a small nation.

I was thinking of going there, despite the security there are ways of taking pictures but I decided not to. I haven't had the chance to see my daughter in some time and that is far more important than any photo and secondly, I'm sick of those in power, sick of their lies, arrogance and sense of entitlement. The same people who got the country into this mess are now exhorting people to make sacrifices. A bitter irony from those who earn more in a month than many pensioners get in a year.

"A plague on both your houses"