Sunday, April 13, 2014

Angie Through The Looking Glass - Merkel visits Athens

Greek recovery is back. The news story that refuses to die no matter how many times the predictions are debunked.

Photo I took during Merkel's 2012 visit to Athens.

Once again the world's press and a large chunk of the nation's police force descended upon Athens in anticipation of the visit by German chancellor, Angela Merkel to beleaguered Greek prime minister, Antonis Samaras.

Bathing in glow of German praise for his government's austerity policies and the a successful five - year bond auction the fragile coalition government and its supporters in the the media were certain that this marked the end of a six-year economic downturn that has not been seen in a developed European country at peace since the Great Depression. Nor was such optimism limited to local reporters and analysts, foreign outlets such as the BBC also waxed lyrically that Greece had finally turned a corner.

Alas, as with so many similar predictions made in 2009, 2010, 2011, 2012 and 2013, the facts, on closer examination do not bear out the basic assumption that a successful bond sale signals growing confidence in Greek economic performance and hence represents the end of the downturn in the real economy. Unemployment still remains high at 26.7% and 20% of those in employment remain unpaid for at least three months, often for much longer. Exports have dropped and GDP is still more than 25% less than it was in 2008. The government is mired in scandal over its connection with Golden Dawn and during the last austerity vote saw it's parliamentary majority drop to just one MP in the 300 seat house.

As if to underline the growing sense of unease, a massive car bomb went off outside the Bank of Greece building in central Athens a day ahead of Merkel's visit. Although police were quick to claim it was probably the work of anarchists, the sophistication and scale of the attack is completely unlike the kinds of attack such groups usually carry out. As yet no individual or group has claimed responsibility.

Yet none of this could puncture the joint Hellenic-German display of  mutual appreciation on display, and to make sure that that would remain so 5000 police officers were on duty to enforce a ban on any form of demonstration in the centre of the Greek capital. Strange that a leader who compared the NSA with the East German secret service (Stasi) for tapping her phone had nothing to say with a display of state strength that Erich Honenker would have gladly approved of.

In keeping with the authoritarian spirit of the day, the Greek state run press Agency APA doctored the chancellor's speech, deleting all reference to austerity in their translation which was released to the local press. Unnecessary given that both state and private broadcasters (which are owned by country's oligarchs with close ties with the ruling parties) went to extraordinary lengths to make sure the prime minister's version of events got as wide and uncritical a hearing as possible.

On  the other hand reactions to Merkel's appearance in Athens on Twitter were almost universally negative, with many comparing it to the visit of a monarch to a newly acquired colony and seething at the revoking of basic civil rights for the duration. Abroad, financial analysts were less giddy with excitement over possibilities of a Greek recovery given that fact that none of the economic fundamentals which are crushing development have changed.

So what was the point? Economically almost none, but politically the return of Greece to the money markets is being sold as a indication that the austerity policies which have brought many European economies to their knees is finally paying off. This is a message we are going to be hearing repeatedly over the next few weeks as EU countries go the poll to vote in European parliamentary elections in May and while this media narrative may play well in Germany throughout the rest of Europe the response could be more muted.

Usually, EU elections are marked by indifference both among the public and the media, but given the growing unpopularity of parties implementing austerity and the rise of the far Right this year's vote is the nearest thing the continent will have to a referendum on the dominant austerity narrative. In the UK, the Conservative/Liberal coalition government is nervously facing the prospect of a spike in UKIP support at their expense. Hollande's position in France would also be seriously weakened if he has a repeat of the debacle his party suffered in the recent local elections.

As well as EU vote Greece will also have local elections in May and the reality is that it will mark the end of a political era with PASOK being ousted from power in many districts, a fall from political grace that has seen its share of the vote drop from 43% in 2009 to around 4%, if recent polls are to be believed. That will probably signal the downfall of deputy PM and PASOK  leader Evangelos Venizelos's time as party leader, even his blustering, bullishness will not be able to keep in check anger at how the party has been destroyed by its leadership's commitment to austerity policies.

Similarly, the prime minister's New Democracy party is also growing restless, unhappy with the coterie of far right advisors and politicians that surround the leader, also worried that they too, may eventually suffer the same fate as PASOK as their power is challenged by SYRIZA on the left and Golden Dawn of the right. A poor showing in May elections may also trigger a challenged to Samaras's leadership.

This is why the visit of Angela Merkel and the bond auction was so vital to a political leadership, desperate to convince the public that despite all the evidence to the contrary the Greek economy is on the right track. Whether this will be transformed in votes in the polls is another matter.Putting aside the growing anti-German sentiment in Greece, the statistics and indicators being used by politicians and media to make the case for recovery are, at best tangential to the everyday struggle for survival many Greeks face. Spreads, yields, and bonds will not make finding a job any easier, reduce skyrocketing tax bills or stop the flood of young people leaving the country.

Friday, April 04, 2014

All The Prime Minister's Men - Top aide to Antonis Samaras reveals his close ties with Golden Dawn

Perhaps one of the worst kept secrets in Greek political life came to light when Golden Dawn MP Ilias Kasadiaris released a video (transcript in English here) which revealed just how close the party was to Takis Baltakos, cabinet secretary to both the prime minister, Antonis Samaras and Deputy PM, Evangelos Venizelos. The tone and content of the conversation underlined what many had suspected that instead of being stalwart foes, the ruling New Democracy party and the avowed political outsiders Golden Dawn party were in fact working closely together.

This is doubly embarrassing for the prime minister as it not only undermines New Democracy's policy of presenting itself as a moderate bulwark against extremism on both the Left and the Right (the so-called Theory of the Two Extremes) but also shows just how little independence the Greek judiciary has in the country's political system. According to Samaras's right hand man, the prosecutions of senior Golden Dawn figures and the imprisonment of its MPs was based on the threat they posed to New Democracy's poll share and not because of their string of violent attacks on immigrants and political opponents.

Despite the fact that the neo-Nazi party had racked up an impressive record of violent racist assaults for years prior to 2013's clamp down the real trigger was, according to the secretly recorded video, their rise to 14% in the polls. Taking advantage of the murder of rapper, Pavlos Fyssas by Golden Dawn members in the port city of Piraeus, Greek police arrested top members of the party and charged them with being part of a criminal conspiracy.According to the transcript, this decision was not based on evidence linking local party supporters involved with the national leadership but rather political pressure brought to bear on judges involved..

Before that, however the Greek prime minister was quite happy to play a double game, on the one hand condemning Golden Dawn as a threat to democracy (especially when abroad) but on the other using their language and ideas to win back conservative voters with anti-immigrant policies taken straight from the pages of the Golden Dawn playbook. Also, when necessary using the threat of an alliance with the party to rein in Democratic Left, the junior party in Greece's (then) three-party coalition government when it threatened to vote against the government over the closure of the state broadcaster, ERT,.

Given Samaras's past as a ultra-nationalist in the in 1990's and the fact that he has surrounded himself with a coterie of far right politicians that this group has close ties with Golden Dawn should come as no real surprise. The ideological overlap between the clique that forms the heart of New Democracy's leadership and the Europe's most far right parliamentary party is much greater than either would like to admit (as least in public).

So, it seems the love that dare not speak its name has become a matter of public record as Greece's creaking coalition govt hangs on by a thread with a majority of one following the expulsion from PASOK of a senior MP who voted again the latest round of austerity laws imposed by Athens's creditors.

In May Greece goes to the polls to vote in European parliamentary, local and if one cabinet minister is to be believed national elections that promise to recast a political landscape that was formed in the 70's. The once powerful PASOK party is likely to be trounced, lucky to elect even one Euro MP whilst its last remaining stronghold in local government will be severely weakened by a drop of 90% in popularity since 2009.

For New Democracy the other traditional party of power the fall has been less crushing but still severe enough to possibly warrant a challenge to the leadership by a party base unwilling to follow PASOK's example and march themselves off into political oblivion.

Now the prime minister's problem is how to manage the decline and turn defeat at the hands of the main opposition party, SYRIZA into a minor victory. If the gap between the two in polls is a matter of a few points Samaras may be able to convince the party base that it was the necessary price to push through unpopular, but much needed policies. If, however, the gap is larger and conservative voters pick Golden Dawn in sufficiently large numbers then Samaras's position will be untenable, leading to a fierce scramble for the leadership within the party and the almost certain end of the unholy alliance between PASOK and New Democracy so putting an end to the coalition government that has governed Greece since 2012. That in turns means new round of national elections in which none of the old political paradigms will apply anymore.

Whilst this is bound to create uncertainty, not least within financial markets, it will signal the end of a era of graft, clientalism and pork barrel politics in which both PASOK and New Democracy officials from the top to the very bottom treated the State as their own private fiefdom and turned a blind eye to the actions of  handful of extremely rich men who used their political connections to wield enormous, and often unseen influence over the economy and lives of millions of Greek citizens.