Sunday, 10 June 2012

Which Greece Will Show Up?

Which face of the Greek electorate will show up at the polls next Sunday in the second general election within six weeks? The angry, petulant, anti-everything voters who cast their votes for the extreme left and right in a fury of protest against the so-called ‘establishment’ blamed for bringing humiliation and poverty to Greece? Or will the slightly more sober side of Greece, afraid of being isolated and scorned outside the Euro,  hold its nose and vote for the charisma-challenged Antonis Samaras and the other parties ostensibly in favour of maintaining the tough reforms required to keep Greece in the Euro?
Will This Greece Win ?
This national schizophrenia was clearly seen in the latest polls that show a neck-and-neck race between the traditional centre-right New Democracy with its muddle-through policies and the anti-everything coalition of vaguely leftist groups under the banner of Syriza. The election rhetoric, if anything, has increased since the inconclusive results of the May 6 election when no group got enough votes to form a government.
Tourists Are Choosing The Baltic Over This
 While the politicians dither the economic situation deteriorates rapidly. The country is running out of money. Unemployment is at record levels with the proportion of young people without jobs topping 50%. Banks are paralyzed, and most sources of liquidity have dried up. Tourism bookings are dropping like a stone with many Europeans deciding that the North Sea or Baltic beaches are suddenly more attractive than Mykonos or Santorini.
No Comment Required
 Syriza’s cunning plans for breathing life into the comatose Greek economy range from unwinding all the half-hearted reforms made to date to increasing taxes on the rich and the shipping companies. Syriza conveniently ignores the fact that the rich and the shipping companies are much smarter than politicians and will always stay at last three steps ahead. Essentially, Syriza wants to maintain the very system that brought Greece to its knees. The only difference is that Syriza people would be in charge of the patronage.

New Democracy and its supporters don’t really have much to say, but thunder on anyway about the disastrous consequences of leaving the Euro. They say that only they can achieve the unachievable – have the creditors moderate the terms of the reform program and keep Greece in the single currency. Left unsaid in the New Democracy campaign is the humiliating reality that northern European technocrats will continue to exert enormous influence on the Greek economy and public administration.

The extremist parties have no real program other than yelling invective at each other, throwing glasses of water, and getting into slug-fests on television. The head of the neo-Nazi Golden Dawn party was quoted as saying he really didn’t believe in elections in the first place, and that they haven’t done any good for Greece.
Political Debate Greek Style
 International economists, like an ancient Greek chorus, offer a steady drumbeat of unsolicited advice. Most of them think Greece should leave the Euro and take its chances with the drachma. This might work if Greece had anything to export or had the industrial infrastructure to replace expensive imported goods with domestic goods. But it doesn’t. Other pundits wring their hands in desperation and moan that Europe really ‘should do something, anything’ to keep the grand Euro dream from becoming a nightmare. Unfortunately, they don’t really have a clear idea about exactly what should be done, or what could be done given the political realities of the European Union.
Will The Drachma Return?
There are faint whispers that voters just might opt for the reform program they know rather than jump into the unknown with Syriza. This theory says that Greek voters got all their complaints and frustration off their chest in the first election, but will ‘come to their senses’ in this election. Maybe, maybe not. But it is quite possible that the physical aggression shown by the neo-Nazi party Golden Dawn during a TV show might have shocked people into realizing the danger posed by extremes of either wing. Many people remember the vicious civil war that Greece suffered not that long ago, and they have no wish to repeat that particular tragedy.

There is another theory that says Greece would benefit from a total collapse that would force the entire system to be rebuilt from the rubble. As one Greek friend pointed out, the problem with this theory is who, exactly, would do the rebuilding. There is no obvious or credible alternative to the discredited existing political establishment.

Is there room to re-negotiate any terms of the existing program? The Germans continue to talk tough, but could this change slightly after the elections? The head of the IMF, Christine Lagarde, had a good point that may gain some traction. Her idea was to ease up on the budget cuts and give priority to the structural reforms that must be changed if the Greek is to have a chance to grow.  Maybe there is room to shift the priorities of the program and stretch out the savings program to ease the immediate pain.

The May 6 election seemed like a wake-up call for many Greeks. They were driven to the edge and didn't like what they saw in the abyss. This is their chance to pull back and return to the hard, long-term task of reforming their beautiful country.

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