Monday 5 January 2015

Greek Election Campaign

Many are asking the rather obvious question. “What is the endgame?” Clearly the answer is not an easy one. Not least because, there are many moving parts but also because the parts are moving wildly and in many ways unpredictably.

It has been a week since elections were declared in Greece and already the signs are clear. It is going to be short, intense, dirty and void of any substance. They say the first casualty of war is truth and the same must be said about election campaigns especially if run in Greece. The situation is not helped by the fact that many journalists or media are trying to pick on every word local politicians are uttering. Politicians of such importance, they are not even recognized by the porter of their block of flats. It gets however, worse when major international news media use sensationalist headlines that are also reproduced in Greece in order prove or refute a point or even influence the elections.

Let us go through each party and its election campaign strategy and their chances.

New Democracy or ND (allegedly conservative)

ND is on the ropes. It is the major government party (together with the allegedly-socialist PASOK). They are clearly fighting a rearguard battle. Samaras, the prime-minister, most probably lost his nerve after losing the Euro-elections to Syriza in 2014. He dropped every promise and signature and in his panic dropped the idea of expelling the IMF (which did not go down well). When he realized that he could not finish the Troika review he dropped another bomb. He moved forward the presidential elections knowing pretty well that the chances of winning it were slim. By doing so, he passed the hot potato to the new government. It is not the first time that Samaras has brought down his own government. In fact, it is the third! When in the 90’s he was the foreign minister he basically brought down the conservative government of Mr Mitsotakis on the nationalist issue of the name of the Former Yugoslavian Republic of Macedonia (FYROM, long story). Subsequently, in 2012 he brought down the national unity government of Mr Papademos (former vice president of the ECB) in order for him to become the PM. In the process he risked Grexit in the double elections that followed. Now he has brought down his own risking again the Grexit scenario. Perhaps psychologists are better equipped to explain this kind of behavior than political analysts.  
In any case, ND is now fighting a battle where the initiative has been lost. The main argument is “don’t vote for Syriza because you stand to lose your deposits”, and “Greece may exit the Euro”. The electorate has heard these arguments before and even though the cry wolf may be truer this time it is not believable. Scaring people is never a good electoral strategy especially if you have used it once before.
Thus if the fear strategy campaign does not work then ND is going to lose these elections. The margin would depend on the details of the campaign. On the other hand, if fear prevails then ND does stand a chance of coming up first if other parties like the newly formed party by former PM Papandreou (remember him) steals enough votes from Syriza. On current balance probabilities are for a Syriza win, but with 20 more days ahead of us anything goes.

Syriza (allegedly radical left and anti-European)
Syriza on the other hand clearly has the momentum advantage. To speak in military terms, Syriza moved from parity to superiority but has not managed to gain supremacy. They have followed an anti-European campaign (also anti-German or rather anti-Merkel) but this seemed to have reached the limits of its applicability.
Most Greeks do not wish to challenge Europe or Greece’s positions inside Europe. They are very angry (using polite terms here) with the austerity imposed but dropping out is too much. Thus Syriza upped the rhetoric. Instead of saying “out of Europe” they changed the theme to “We are the force of European change”. In many ways, this is identical to increasing the lie so that it becomes more believable, a standard trick in every propaganda war. Many have fallen for this trick. It gives a virtual vision and a dream. And everyone likes a good dream. The mountain can sometimes go to Muhammad rather than Muhammad go to the mountain.
The rest is mere detail. Syriza ostensibly cares about the misery and poverty 6 years of recession have caused. It has shown, however, little willingness to remedy this, unless they are political-vote gains for them. They say no to everything. For example, one may presume that they would be allies to Troika’s effort to fight tax-evasion or even corruption but he would be mistaken.
All this mean one thing. The day after they win the elections, they would have to make colossal U-turn on almost every pre-election promise. And this is where the risk lies. Too many of its party members have seen the “light” and converted to that intransigent almost jihadist gospel. Syriza would need support from other parties to govern whether they technically have enough MP’s or not. Chances are that they would be short majority by around 15-20 MP. In other words, they would have 130-5, when they need 150+. But given the possibility of losing from the left flank, Tsipras (Syriza’s leader) would have to make major concessions.
As always it is not the turn but the timing of the turn that is important. If it comes to late then Greece risks a major confrontation with European partners that may lead a change of status within the EU similar to what happen in Cyprus. This is the nightmare scenario. Currently, we don’t give high chances for this scenario despite the scaremongering. Tsipras wants to become PM and in order to achieve it he needs the consent of the creditors, sorry, I meant European partners.

Potami (new center party)

Potami is a new party that was formed less than a year ago by an ex-journalist. It managed to get 6.6% in the European elections. It has a clear pro-European agenda and a reformist agenda. It believes that many things need to change but without destroying everything in the process. So far, it has managed to draw support from the left and from the right in a balanced way. On the down side it is a new party and it may get squeezed by the dilemmas that are bound to reign in the election campaign. However, it stands to elect between 20-25 MP and in this case would hold the balance of power. Chances are that Potami would be the third party and they would get the invitation to form a government in a hung parliament.
In many ways, Potami has sawn the seeds of a new grand centrist party in Greece. The forthcoming elections would be a testing time. If it survives, it will replace the ailing PASOK and would become the major pro-european greek party.

The former PM decided to split from the party his father founded and he was a PM. His dislike of the current PASOK leadership (Mr Venizelos) is legendary. This is the wild card of the elections. Many predict that it would cut enough votes from Syriza and this may tip the balance. Others, believe that it would split the PASOK down the middle with neither party gaining the 3% needed to enter the parliament. In many ways, this is the last stand of Mr Papandreou and his family legacy that started with his grandfather in the 1940’s. There is no policy or position. His party aims for the reminiscent voters the disgruntled voters and banks on the family legacy and network.
Pasok too fight for survival as they poll around 4-5%. Papandreou would cause damage to them. If they survive then they would play a role in a national unity government the day after.

Democratic Left (DHMAR)
Not much to say here apart from the fact that its leader managed to shot himself and the party straight to the head from pointblank range. He apparently made a deal with Syriza not to vote for president and to bring down the government and then Syriza performed the double-crossing of the year (many more to follow, I guess). They unceremoniously dropped them right after. The elections would only put the RIP sign at their headquarters.

Independent Greeks (ANEL)
We have dealt with them before not least because their leader believes in the chemtrail conspiracy. They have a total anti-European policy but from the right. They seem to be losing support and although currently they stand to enter the parliament (>3%) given the polarization they may fail. They may be a natural ally to Syriza in the aftermath. After all, Mr Tsipras, the leader of Syriza called them credible and honest!

Golden Dawn
This is the big unknown. Although half of their MP including the leadership is in jail they still have strong support as the anti-everything party. The revelation that it is a Nazi party did not seem to repel too many voters. They are aiming for third place.
If there is a hang parliament then the president can give the order to form a government to the first three parties. Thus although no party would be willing to talk to them, semantically they may the invitation to form a government if third.

All the above point to a messy campaign and a messy few weeks after the election. Fasten your 7-point airplane aerobatic seatbelt harness for some serious moves and possibly bailouts.