12/01/2015 - Analysis
Ten million Greeks are to renew the 300 members of the Vouli Ton Ellinon
, the only chamber of parliament on 25th January. This general election, which is taking place 18 months ahead of time, follows the failure of the presidential election in December, which in itself also came two months ahead of the planned date. Indeed MPs did not manage to elect the successor to the head of State in office, Carolos Papoulias, whose second term in office will come to an end in March and who was not allowed to stand again.
On 29th December Stavros Dimas, the only candidate standing, with the support of New Democracy (ND) of Prime Minister Antonis Samaras and the Pan-Hellenic Socialist Movement (PASOK) led by Evangelos Venizelos, won 168 votes, 12 less than the required 3/5th majority (180 votes) in order to be elected in the third round of voting. He won a similar number of votes on 23rd December in the second round when a qualified 2/3 majority was required (200) and 160 votes on 17th December in the first round. The failure of the presidential election led to the dissolution of the parliament on 31st December and to the organisation of general elections.
Prime Minister Antonis Samaras decided to organise the election as quickly as possible and set 25th January as the date. According to a poll by Kapa Research, published in the daily To Vima
, six Greeks in ten (59.9%) were against the idea of the snap election. The latter qualified as "the most important election in decades" by the Prime Minister appears to be turning into a referendum on the government's austerity policy.
The Athens stock market fell sharply during the three rounds of the Presidential election and after the announcement of the organisatio of general elections. Interest rates on the Greek debt soared. Across the world stock exchanges plummeted (the price of oil is also behind this collapse), showing Athens that the country cannot finance itself alone.
On 3rd January the on-line edition of the weekly Der Spiegel
stressed that according to contacts close the Chancellery, the German government deemed that Greece's exit from the euro zone was almost inevitable if the leader of the Radical Left Coalition (SYRIZA), Alexis Tsipras, managed to form a government and gave up budgetary austerity and decided not to continue paying back the country's debts after the general elections. Germany's intervention together with that of the European Commission via its spokesperson and that of Pierre Moscovici (see below) was both logical (the European States are Athens' creditors and Chancellor Angela Merkel (Christian Democratic Union, CDU) has always promised the Germans that financing Greece would not cost their country a penny) and counter-productive. In all Greece has borrowed 194.7 billion euro from the euro zone (52.9 billion of which from various countries, notably Germany and France). The President of the European Commission Jean-Claude Juncker provided his support to Stavros Dimas prior to the presidential election, a first in the Union's history. But it was not an enterprise that was crowned with success.
And what of Greece's situation?
Since 2010 Greece has been on a financial drip: that year the International Monetary Fund (IMF) and the European Union committed to lending it 240 billion euro in exchange for the introduction of reform and painful political austerity for a major part of the population.
The first assistance plan of 110 billion € was granted to Athens between 2010 and 2012; the disbursement of the second plan of 130 billion € which covers the period 2012-2014 were undertaken progressively, taking on board the introduction of the reforms demanded by the creditors. The last tranche of 10.8 billion € was due to be paid before 31st December but the parties did not come to agreement on the draft budget 2015, and on 8th December the European Union gave the country two additional months to close the second aid plan that should finally help to make safe the country's finances. A compromise must therefore be found before the end of February. The snap election complicates matters and has now weakened Athens' position.
On a positive note we might quote the return of growth: after six years of recession the Greek economy is due to return to growth (0.6% in 2014, 2.9% this year) according to economists; in 2013 Athens recorded the weakest contraction in its GDP since 2008 (-3.9%), notably, thanks to a smaller reduction in household consumption and the recovery of tourism. Likewise the government deficit represents 0.2% of the GDP whilst it totalled 15% five years ago. Finally, in April last, Athens made its return to the financial markets.
But the country is still extremely fragile and has been significantly weakened by the austerity measures. Unemployment affects 25.7% of the working population (49.8% of the under 25's); the poverty rate lies at 23.1% of the population, a record in the European Union. Salaries have decreased by one third, both in the civil service and in the private sector (the minimum salary totals 586€) and are often paid late; retirement pensions have collapsed and household revenues fell by 35%. The number of civil servants has dropped from 900,000 (end of 2009) to 656,000 (end of 2014). One business in four has had to close. Finally the government debt which totalled 157% of the GDP two years ago now totals 175%.
As the election draws closer the European Union fears that SYRIZA will try to rid the country of its financial tutelage without concluding the 2nd financial aid plan or that it might even demand for the re-opening of the negotiations over the Greek debt. A decision like this would scare off investors and cause a shock-wave on the markets, notably on the European sovereign debt markets.
However the situation is different from the one in 2010 and Athens' budgetary situation has changed. Moreover Brussels has introduced structures (European Budgetary Pact - Treaty on Stability, Coordination and Governance, the European Stability Mechanism (ESM)) to circumvent crises and prevent any contagion to the rest of the euro zone. A rise in Greek borrowing rates should therefore not affect other countries.
Mina Andreeva, the European Commission's spokesperson indicated that whatever happens the only viable scenario for the Commission is to "keep Greece firmly anchored to the euro.
" The Commissioner for Economic and Monetary Affairs, Taxation and Customs Union Pierre Moscovici, has called on the Greeks to support the reforms: "strong commitment towards Europe and wide support by the electorate of their political leaders in view of the necessary reform process for growth are vital, so that Greece will prosper again within the euro zone,
" he declared on 29th December.
Athens' other creditor the IMF has suspended its aid to the country until a new government is formed. Its spokesperson Gerry Rice did however say that the country did not need any immediate funding. According to the report published in October by the IMF, Athens will need 10 billion € this year. The IMF is demanding that the Greek authorities introduce retirement reform and that they liberalise collective dismissal.
SYRIZA - the unknown
The possible victory by SYRIZA and the arrival of a government led by Alexis Tsipras is frightening the Europeans. Over the last few months the far left party has repositioned itself, visibly trying to reassure investors and the electorate and to show that it can exercise power. It is no longer asking for Greece to leave the euro zone but for a revision of the austerity policies and it wants Athens to be free from the tutelage of the troika (IMF, ECB, EU) which is forcing painful economic reform on the country, with the aim of restoring the viability of public finances. To do this SYRIZA wants to sign a New European Deal which would include public investments on the part of the European Investment Bank (EIB) and enable the ECB to purchase bonds. The party wants to reduce the debt so that funds can be released so that the State can invest and improve the social situation of the poorest. It plans to revive the economy by raising domestic demand.
In spite of his campaign declarations ("Germany did it in 1953, why can't Greece in 2015?" "It is time for democracy, time for dignity, time for the people to stand up
") and promises made to his fellow countrymen of "turning the page on austerity
", "of makinf the markets dance,
" Alexis Tsipras has committed not to act unilaterally, and undeniably, his programme proves that he wants dialogue with the European Union.
The party's leftwing, which is somewhat dormant, is still there however. Hence Yannis Tolios maintains: "We can decide to stop paying the interest and the amortisations, this is one of the promises made by our party
"; Maria Kanelopoulou stresses that "we cannot be tributary to a debt that we did not cause, nor can we be responsible for the commitments taken by previous governments,
" whilst German Finance Minister Wolfgang Schäuble recalled that Athens should continue on the path of reform after the election. "The election will change nothing in terms of the agreements made with the Greek government. If Greece takes another path it will be difficult for us to support it,
" he declared.
SYRIZA's economic programme was published in September in Thessaloniki. It is divided into three phases. The first is to bring austerity to an end: the party is planning to lighten taxes, raise the minimum salary, reintroduce the 13th month for the lowest pensions, deliver electricity or lodgings coupons and provide free access to public transport for the poorest (around 300,000 households), to a total of 11 billion €. The second phase is the immediate negotiation of the reduction of the debt in 2015 and finally the re-negotiation of the debt burden (175% of the GDP).
"The issue of the budgetary gap can be settled if we negotiate a reduction of the 24 billion € we are to allocate to the reimbursement of the debt in 2015. We want to reduce the level of reimbursement of our government debt from 5% of the GDP to 2% over the next 10 years. We shall pay the IMF but we want to renegotiate the part of our government debt held by the banks of the European States, the ECB and the European Stability Mechanism (ESM) in order for it to be supportable,
" declared George Stathakis, a professor of Economy and advisor to Alexis Tsipras, who is forecast to become the next Economy Minister in the event of victory by SYRIZA. He repeats that "the party is no longer the same as in 2012.
" In his opinion "Europe has an interest in allowing Greece to remain in the euro zone and for it to recover growth without suffocating under the weight of the debt.
" "Indeed what kind of growth and of which success can we speak whilst the country has lost more than 25 GDP points over four years, that 30% of the Greeks have fallen below the poverty line, that unemployment is affecting 27% of the population and that businesses continue to close? It is time to try another model,
" he maintains.
"Alexis Tsipras is putting forward social aid measures that represent a cost of 13.5 billion €, but the coffers are nearly empty. As for his will to reduce the debt - it would of course be ideal but 85% of it is held by European institutions and partners so do you think that the French or the Germans will accept to pay the Greek debt without being reimbursed?
" wonders Panagiotis Iokimidis, professor European Policy at the University of Athens, "Alexis Tsipras maintains that he can increase salaries as soon as he takes office or renationalise businesses or land that has already been privatised - this is not serious talk,
" stresses Sotiris Dallis, professor of International Relations at the same university.
"SYRIZA might win 30% of the vote this time. Not enough to hold an absolute majority but it will only require about 10 MPs to achieve the 151 necessary votes,
" analyses Elias Nikolapoulos, a political expert. The party came to an agreement with the Democratic Left (DIMAR). Four MPs from this party are due to be candidates on the SYRIZA lists. Stavros Theodorakis, Chairman of the Centre Left Party To Potami (The River) which is attracting many former PASOK voters and which might well rise beyond the 3% necessary to be represented in the Vouli says it is prepared to work with the government led by SYRIZA. For its part PASOK is refusing any type of rapprochement.
Victory for the far left would undeniably be highly symbolic in Europe. It would strengthen Podemos (We can) in Spain led by Pablo Iglesias Turrion, a splinter group of Movimiento 15M (Movement of 15th May) in Spain with which the Greek party has joined forces in the European Parliament. Podemos is running neck and neck with the People's Party (PP) in office in the opinion polls. "In Europe things are starting to change. Everyone is getting used to the idea that SYRIZA will be in government and that new negotiations will start,
" stressed Alexis Tsipras. "We do not want the austerity policy and we are going to renegotiate the troika's programme. "This claim is not only ours. There is an entire movement across Europe which wants to bring austerity to an end,
" maintains Dimitrios Papadimoulis, an MEP (GUE/NGL)
Can Antonis Samaras win the second round?
By organising the presidential election (which was due to take place in March in any event) early in December, Antonis Samaras hoped to end a climate of instability which had reigned in the country over the last few months. He lost the first round of the battle. By pointing to the threat of chaos and convening a snap election, whilst Greece has not yet finished the aid programme, he has undoubtedly complicated matters for SYRIZA.
Antonis Samaras is campaigning on the threat of instability caused by SYRIZA which he is quick to call terrorism. "Voting for SYRIZA means taking Greece towards catastrophe and the danger of exclusion of the euro zone,
" repeats his party, New Democracy.
"The difficult reforms have brought results, there is no alternative and the elections will change nothing to the agreements passed with the Greek government,
" declared the Prime Minister after the failure of the presidential election. He wants to convince his fellow countrymen that he is the only one able to negotiate with the States in the euro zone and likes to repeat that the election on 25th January is about maintaining Greece in Europe. Maybe he hopes to win in the same way as he did in the general election of 2012? It is not certain however that threat is the best electoral argument; moreover Greece's situation, like that of Europe, is different from 2012.
On the far right the neo-Nazi party Golden Dawn (XA) is the country's third political force. Since June 2014 all of the party's MPs are being prosecuted for "belonging to a criminal organisation
", several are in prison. Its leader Nikolaos Michalodiakos and four other MPs were also charged with murder on 18th September 2013 of the anti-fascist rapper Pavlos Fyssas. He denies any involvement in this act, which he denounces as a "political machination
". The violence undertaken by its members and the accusations made against them do not seem to be discouraging supporters of the far right party which is perfectly skilful in using the electorate's mistrust of the traditional parties. Golden Dawn highlights the need to grant priority to Greeks and points to the danger set by immigration in which it sees a threat to the nation's integrity suggesting that it is the cause of the insecurity it claims reigns in the country. Its real influence however is difficult to assess, since its supporters do not like talking about their electoral preferences with the polling institutes.
Finally the PASOK is very weak in the polls. Its failure when in office (2009-2011) and its government coalition with New Democracy have clearly discredited the historic left-wing party. Former Prime Minister (2009-2011) and former Chairman of PASOK (2004-2012) George Papandreou created his own party on 2nd January that he has called the Movement for Democratic Socialists. He says he wants to reform the former corrupt system that led to the financial crisis. This party might bring about the final collapse of PASOK. If it succeeds in rising above the obligatory 3% to enter Parliament it might be approached by SYRIZA.
On 18th and 25th May last the Greeks renewed their regional mayors and councillors. New Democracy came out ahead in the first round with 26.3% of the vote ahead of SYRIZA which won 17.7% of the vote. Half of the electorate did not turn out to vote however (whilst in Greece it is obligatory to vote). We should note that for a long time the political parties paid voters who did not live in the community where they were registered to go and vote - a practice that they have now given up.
New Democracy won 7 of the 13 regions in the country whilst PASOK, which was running under the name Elia (Olive tree), only retained Crete and western Greece, two touristic regions. SYRIZA won the region of Attica where 5 million people live, i.e. half of the country's population. Rena Dourou became its Chairperson with 50.82% of the vote ahead of Ioannis Sgouros. The party also conquered the Ionian Islands, of which Corfu is the capital.
Several towns including Athens and Thessaloniki elected independent candidates - four independents, two of whom are former PASOK members, who were elected as regional Chairs.
In the European elections, which were organised on the same day as the second round of the local election, SYRIZA won 26.57% of the vote and 6 seats ahead of New Democracy which won 22.7% of the vote and five seats. Elia only won 8.02% of the vote (2 seats), coming behind Golden Dawn which won 9.39% of the vote and three seats.
The Greek Political System
The Greek Parliament (Vouli Ton Ellinon) is monocameral and comprises 300 members elected for four years within 56 constituencies by reinforced proportional representation. The electorate votes for a list on which they can express their preference. 51 constituencies appoint 288 MPs; the 12 remaining MPs, called national MPs since they represent all of Greece - an honorary position - are appointed on the basis of the results achieved by each of the political parties nationally. This electoral system guarantees a 70% representation level for the parties involved. The party that wins is awarded a bonus of 50 seats. Candidates must be aged 25 minimum. It is obligatory to vote in Greece up to the age of 70. Abstention is officially punished with a sentence ranging from one month to a year, as well as dismissal from work but these sanctions are not implemented.
7 political parties are represented in parliament at present:
– New Democracy (ND) founded in 1974 by former President of the Republic (1980-1995) and former Prime Minister (1955-1963 and 1974-1980), Constantin Caramanlis. Led by outgoing Prime Minister Antonis Samaras, it has 129 seats;
– The Radical Left Coalition (SYRIZA), far left party created in 2004 borne of the former Synaspismos and of several far left movements, communists and ecologists. It is led by Alexis Tsipras, and has 71 MPs;
– The Pan-Hellenic Socialist Movement (PASOK), a party created in 1974 by former Prime Minister (1981-1989 and 1993-1996) Andreas Papandreou, led by Deputy Prime Minister and outgoing Foreign Minister, Evangelos Venizelos. It has 33 seats;
– The Party of Independent Greeks (ANEL) created on 24th February 2012 led by Panos Kammenos, with 20 seats;
– Golden Dawn (XA), far right party created in 1980, led by Nikolaos Michaloliakos, with 18 seats;
– The Democratic Left (DIMAR), founded in June 2010 by former members of Synaspismos. Led by Fotis Kouvelis, with 17 MPs;
– The Communist Party (KKE), founded in 1918 and borne of the Socialist and Workers', Communist and Anti-European Movementet. Led by Aleka Papariga, with 12 seats.
According to a poll by Marc for the TV channel Alpha TV SYRIZA is due to come out ahead in the general elections with 28.3% of the vote. New Democracy is due to take 2nd place with 24.8% of the vote. Behind these two parties, To Potami is due to win 5.8% of the vote; Golden Dawn 5.7%; the Communist Party, 5.1% ; PASOK, 4.5% ; the Party of Greek Independents, 3.3% ; People's Orthodox Alert (LAOS), 1.9% and finally DIMAR, 1.2%. Another poll by Alco and published by To Pontiki on 8th January shows that SYRIZA will win 33.8% of the vote and New Democracy 30.5%. But SYRIZA's lead is declining. A GPO poll for MEGA TV on 7th January indicates that SYRIZA will win 28.5% against 25.3% for New Democracy. SYRIZA's lead is now only 3.2% whilst it was 4.9% a month ago.
Can Antonis Samaras win the 2nd round? A Kapa Research poll shows that 44.1% of the Greeks see the present head of government as the best placed to lead the country; 34.4% prefer Alexis Tsipras. Moreover a GPO poll shows that three quarters of the Greeks (75.7%) want their country to stay in the euro zone; one quarter (24.1%) would prefer it to leave.
The next government will have to be formed quickly, since the European Commission has set the end of February as the deadline for Athens to close the 2nd aid plan. Hence there will be little time to negotiate with the troika, little room to manœuvre. Finally the new MPs who will sit in parliament as of 5th February will have to elect a successor to Carolos Carolos Papoulias to the Presidency of the Republic.