The Prodigal Greek

The Greek crisis through a different prism

Between austerity and chaos yet again

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“We either vote for these measures or we face chaos” a phrase that Greeks have heard repeatedly since Spring 2010 when the country was locked out of international markets and became evident that it would need a combined financing package from the European Union and the IMF.

The Greek Parliament in May 2010, in June 2011, in February 2012 has been asked to vote for austerity bills under the pressure of a tranche disbursement and in the name of saving the country from default and chaos. The perpetual dilemma of ‘survival’ resurfaced, only this time it came from Antonis Samaras, a fierce adversary – while in opposition – of the policy mix that the troika has been prescribing for Greece.  In his speech in Parliament, he urged the coalition MPs to vote for the heaviest austerity package since Greece entered the EU/IMF program, while reassuring that this will be the last cuts that Greece will have to tolerate.

In his election campaign, Samaras presented Greeks with 18 billion euros of measures that would prevent across the board cuts to pensions, salaries and benefits. He had also promised changes to the policy mix and the re-negotiation of the terms of the latest Memorandum, which was voted in February and supported by his party.

Within the first week of taking office, any re-negotiation pledges were abandoned in favour of the argument that the country needed to “re-gain credibility”.  The 18 billion euros of alternative measures were replaced by a bill that requires 9.4 billion euros in spending cuts in 2013 – 6.6 billion from public sector wages, pensions, welfare benefits and healthcare – 4.2 billion in 2014 and an added 4.7 billion in 2015-2016 that will need to be defined at a later date. This is a total of 18.3 billion euros of austerity measures that are expected to push Greece deeper into economic depression and unemployment.

In just four months in office, Greece’s prime minister has pretty much spent all the political capital that was at his disposal, and the thin majority that approved the bill in Parliament finds the coalition weakened. PASOK slides further into decay having lost six MPs that were expelled after refusing to adopt the party line of supporting the bill. Another announced his departure on Thursday, leaving PASOK with 26 MPs. The moderate leftist coalition partner of Democratic Left appears to be sitting on the fence and Samaras after last night cannot take their support for granted, although they have committed to supporting the budget which is customarily seen as a de facto vote of confidence for the government.

Confidence is certainly not the take away of yesterday’s debate and vote in the Greek Parliament. The entire spectrum of Greece’s political establishment is coming out of it battered, having performed below expectations considering what was at stake and the extent of changes that the bill is about to bring to the society and the livelihoods of Greeks. From the objections to the constitutionality of the bill, to the last-minute submission and embarrassing withdrawal of an amendment that attempted to regulate the payroll of Parliament employees, the domestic political system took another major blow on its credibility.

Greeks were told that this severe reduction in standards of living is necessary for the country to secure its place in the eurozone and a decisive solution to the country’s debt problem. A solution that once again seems to exclude the Greek government and will be decided for Greece by the EU and IMF, as Samaras admitted in a recent press conference.

As much as others will decide, the Greek prime minister will have to board the return flight to Athens from the Brussels summit in the end of November with something tangible that will turn the country’s fortunes or he risks the measures and chaos going hand in hand.

@YiannisMouzakis

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Written by Yiannis Mouzakis

November 8, 2012 at 11:49 am

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