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

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.

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.