Monday, June 18, 2012

Greece election post mortem

Antonis Samaras, head of Greece's main opposition party, New Democracy

First things first. An apology to anyone who  bet (and lost their shirt) on my prediction that SYRIZA would be the largest party in parliament today, if I see you, let me buy you a drink, it's the least I can do. As it turned out my analysis was off the mark. I overestimated SYRIZA's final vote and more crucially underestimated the final New Democracy tally. Also I didn't see the collapse in Greek Communist party support which halved, unlike PASOK and Golden Dawn who only saw a small drop in votes received. All in all, my days as a poll pundit are numbered. (Vote statistics can be found here).

Why was I so wrong? First of all, I failed to grasp just how successful the fear campaign over possible Greek exit would be. I had assumed that the constant barrage of warnings over the consequences of Greece having to leave the Eurozone had done its work and wouldn't push Samaras's vote over 25%. On the other hand the record low turnout (down 8% from 2009) seemed to have had an effect, I suspect on younger voters who would have supported anti-bailout parties. Finally, the scenes of violence perpetrated by Golden Dawn spokesman on live TV did nothing to diminish their popularity, which is both surprising and deeply worrying.

PASOK leader, Evangelos Venizelos

Mea culpa aside, today the New Democracy leader, Antonis Samaras will be asked by the president of the Greek republic to form a government. At first glance this seems just a formality as New Democracy with 129 seats and the other pro-bailout party, PASOK with 33 seats will comfortably exceed the 151 MPs needed to form a majority. Indeed both leaders in the last week of campaigning repeatedly stated the need for the country to immediately have a working administration in order to deal with its current economic meltdown.

However, beyond the campaign promises, Samaras and PASOK leader, Evangelos Venizelos have to take into account other factors concerning their own and their parties' political future. If they do assume power, then they will be seen as the parties that are responsible for the country's economic woes, leaving SYRIZA and others to claim that have are the only real anti-austerity choice in any future elections. Given the drubbing PASOK got and the marginal victory achieved by new Democracy that more or less guarantees their defeat in the next elections (barring an economic miracle and the Germans have outlawed miracles).

Alexis Tsipras, head of the The Radical Left Coalition, SYRIZA

The answer to this dilemma is to try and persuade SYRIZA leader, Alexis Tsipras to join the government with promises, appeals to patriotism and threats of possible dire economic consequences if he does not.This card was played after the May elections and judging by official SYRIZA statements coming out in the Greek media such overtures are almost certainly likely to be rejected. On the other hand the Democratic Left have made it quite clear that they will be willing to take part in such a government. But this does not solve Samaras and Venizelos's long term problem about how deal with Tsipras in coming elections.

The other factor which plays a crucial role in any negotiations is ego. Even with Greece mired in the worst economic downturn, the monsterously overblown egotism of both Samaras and Venizelos may prove an obstacle in forming a stable government. Both have spent decades slowly working their way up the greasy pole of political power and just as they seemed to be destined to become prime minister, the game changed. To have to share power after so many years playing second fiddle is almost more than either can bear.

Whatever form the next Greek government takes, its fate will not be decided in Athens but in Berlin and Brussels. If the troika (EU/ECB/IMF) are serious about supporting Samaras then serious concessions in the terms of the current austerity measures will have to be made, otherwise with unemployment rising 1% every two months and the economy contracting the fragile New Democracy - PASOK (and possibly Democratic Left) coalition will fracture under the weight of more job cuts and tax hikes. At which point Greece holds yet more elections and most likely brings to power SYRIZA.

There seem to be mixed signals coming out of Europe over whether there will indeed be a change in approach which will allow New Democracy to stay in office, on the one hand deputy German finance minister, Steffan Kampeter said that Greece shouldn't be overstrained during a talk on German TV, on the other the Eurogroup of EU finance minsters sent a polite but clearly worded statement last night warning Athens that it could not deviate from the term of the bailout agreement.

With cost of lending in Spain continuing to rise and with Italy on the verge of asking for its own bailout deal none of this may matter as the systemic problems of the Eurozone continue to rage unchecked, leading to possibly disastrous results for European debtors and creditors alike


PilioVillas said...

Although I don't spend a massive amount of time following the coverage in the Greek media, I got the impression that even though Syriza came under attack from all sides, they failed to make their case as forcefully as they could have done. What swung the balance was insecurity (carefully spread by the forces of the right). Syriza could have driven home the point better that in the long term Samaras can guarantee nothing, since it is conceivable that with the current policies the eurozone will break up even if Greeks sit quietly at home and accept the memorandum and abide by the loan agreements. Jobs will definitely go, and the future of education, healthcare and the rest of the welfare state is also uncertain. When Greece proves unable to live up to its commitments, the claims on the Greek assets will begin. As Kazakis pointed out, the Germans now have the right to effectively sell Greek military hardware to the Turks. The media managed to focus people's attention on the immediate consequences of a victory for the left, and Syriza failed to counterattack by spelling out the more likely neo-liberal doomsday scenario.

gatopeich said...

I fully sympathize with you. I made the same sort of wrong prediction in, e.g., Ireland's Austerity Referendum, and was sadly surprised by Spain's November elections.

We seem to underestimate the power of the so-called "Right", and the madness of the typical human heart which when proved wrong just raises the ante.

When the current government(s) falls, watch out for the worse alternative, not the best.

Casey Madison said...

These are the same 2 corrupt parties that caused all Greece's problems. Why would anyone think they will change? It's all wack! What a bad joke on Greeks and Europeans!

Simon Baddeley said...

Voting in the June election in our village, compared to April's poll

Golden Dawn and LAOS have at least gone down, and SYRIZA topped the vote as it did across all the Ionian islands but for Levkada. S