Sunday, 8 April 2012

Elections in Greece?

Officially the meat eating season for the devout finished few weeks ago. However, the Carnival in Greece seems to have been postponed for after Easter. There is wild speculation that Greece would go to the polls in early May, with the 6th of May as a highly possible date.
Greek elections are, like the carnival, never boring. The next ones are promised to be even more so. It would be the first time that the Greek people would have the chance to express their views on what has happened to them the past three years.

Let me recap what has happened and what are the choices. The Greek economic model of a socialist/communist state with capitalist consuming habits as Prof Azariadis cogently described it collapsed under the weight of a massive debt. For the past 30 years Greek politicians had it very easy. All they had to do is either get European subsidies or borrow extensively to fuel consumption and get re-elected. And guess what! Not only they got re-elected but also pushed out prudent policies. Political discourse degenerated in a meaningless battle of populist slogans and irrelevant hysteria. The massive influx of money with no strings attached completely changed the political landscape. The few conscientious and capable politicians were either discouraged or pushed out of public life altogether. The Greek political elite are rooted on client and family relationships and the last thing Greek democracy needed was money for nothing to propel this practice to a full blown state policy. A politician in order to get elected had two choices a) offer money or b) promise even more money. Both choices worked for some time, till the markets realized that Greece has no hope in hell of repaying them at least under the current economic model.

PASOK (socialist) vs ND (conservative)

The major proponent of this spend policy was PASOK, the socialist party. It was rather unfortunate that PASOK and its demagogue leader Andreas Papandreou got into power barely few months after Greece joined formally the then EEC (European Economic Community). Being a socialist comrade in brotherhood with the mainly French (remember frère” Jacques Delors or Mitterand?) dominated EEC of the time, he was able to trick and sometimes blackmail Europe into giving more money (Incidentally, Thatcher did not fall for it). Financially, using this free ride, it established itself and as a result it ruled Greece for 21.5 years out of the last 30! It bred irrational expectations and militant unions. It fostered good media relations by giving the media moguls construction (every self-respecting Greek oligarch must have a construction company) contracts and advertising revenue. The main opposition, the conservative party ND followed suit. When PASOK fell from grace under the weight of corruption, ND filled the gap admirably. One has to stress that in the past 30y, there was never a change of government instigated by policy shift or policy ideals. In all cases ND and PASOK lost power to each other because of massive corruption scandals. ND proved that what the PASOK can do once they can do ten times. For ND it was simply adapting to the times. ND and the center-right had lost the battle of ideals since there was none. Furthermore ND was depleted of even mildly able politicians. After all what is the point of joining a so-called government party like ND when they are almost never in power. PASOK and the free European money had irrevocably changed the political dynamics. ND had to become a copycat of PASOK in order to get their hands on the honeypot of European subsidies.
The entry of Greece into the Eurozone was manna from the markets for both ND and PASOK. As subsidies began to dwindle they found borrowing far more efficient and effective. It was a spend race to bankruptcy. The debt bomb was passed from PASOK to ND and vice-versa. It finally exploded.  

Election Choices. Predictably Irrational

In all the other countries that had elections since the peripheral debt crisis began there was massive electorate change (Spain, Portugal, Ireland). You might mistakenly think that this is the path Greece would take too. But Greece and Greek politics are anything but ordinary.

Greek voters would go back and vote once more for the two main parties, ND and PASOK that destroyed the country. This as irrational as it sounds is what is going to happen. It’s the devil they know and they are the only parties that can pretend to offer protection and shelter. It is like marrying your rapist to guard you and protect you from other rapists. Furthermore, Europe seems to broadly support them and voters know who is still buttering their bread. In my mind Europe is making a big mistake even though one can argue that they really have little alternative. Europe rests its hopes to the same parties that caused the problem. It is like asking the former East German leader and head of the Stazi Eric Honecker to reform East Germany by giving him money and political support.

Why the alternatives are not there? It is a sad fact that after almost three years of major crisis in Greece there are very few green shoots either in politics or in society. There are plenty of dark shoots and weeds though.
·         Dark shoots and weeds. For the first time the neo-nazi Golden Dawn (Xrisi Augi) shows 5% in the polls. If we are to believe the polls the new right wing party founded by Mr Kammenos (Independent Greeks) is polling 12%! They claim to be pro Europe but want Greece to be independent and for Greece to denounce the debt as odious and to stop paying. LAOS the other right wing party that originally supported the bailout has lost popular support and is polling near 2%. Then we have the plethora of leftish parties that come in all shades of red. The true-red communist party KKE seems to have doubled its support, currently polling 12%. This is the friendly party to Fidel Castro, Hugo Chaves and North Korea’s Kim Jong il. When Kim died KKE send its deepest condolences!  The left coalition (SYRIZA) is a milder mutation of the Communist party currently polling around 10%. Yet one more breakaway left party DEMAR was founded by Mr Kouvelis. DHMAR is an offshoot of SYRIZA. The leader is a soft spoken man with grey hair that seems to be capturing popular support. Although clear about a European path for Greece it has not as yet formulated practical solution on how to reconcile the liberal economy with the left ideology (Social state with capitalist consuming).
·         Green Shoots. I classify two parties in this space but they may be more. DRASI the party founded by a former conservative finance minister Mr Manos and DIMIOURGIA XANA (Recreate Greece). DRASI is a party that supports not only the European path of Greece but also has a consistent economic reform agenda and creative policies. It recently joined forces with the Liberal coalition of Mr Valianatos (Greek equivalent of Peter Tatchell). It supports the liberalization of the economy and reducing the massive influence of the state. Miranda Xafa the renowned Greek economist and former Greek representative to the IMF supports DRASI together with many other Greek intellectuals. Sadly, it does not poll more than 1-2%. DIMIOURGIA XANA on the other hand is a totally new party that seems to draw support from the everyday professionals and people who are fed up with the current system. They too are pro-European and support a liberal economy. Unfortunately, both parties have very little support and this may reflect a deeper fault of the Greek society that seems to have lost its ability to regenerate and rejuvenate.

The forthcoming elections are not going to prove life changing for Greece. Due to the electorate system that gives a bonus of 50 seats to the first party, ND and PASOK would be able to govern one more time with ample majority. At the risk of being totally wrong, I expect them to collectively poll close to 55-60% much more than what they currently poll and have near to 200 out of 300 parliamentary seats. But numbers may be deceiving.  The next parliament would be asked to implement the changes demanded by Troika. Support for the government would wane very fast as unemployment reaches 30% and the recession cuts another 6-10% off the GDP. Given the fact that both parties have not renewed their useless and incompetent members, implementation of any reforms would be difficult. Unless, the safety valve of immigration opens and Greeks find jobs elsewhere (like in the 50s) it is going to get rough. Europe must be prepared for the next round of hand-outs to Greece.