Greek Elections : a Reminder that the EU Still Faces Serious Problems

Greece's centrist coalition government led by Prime Minister Antonis Samaras was forced Monday to call early national elections after the Greek parliament failed to elect a new President in the three vote rounds permitted by the constitution. The Samaras coalition had chosen Stavros Dimas, the 73-year-old former European Commissioner, as its only candidate for president. Dimas garnered 168 out of 300 possible votes - short of the 180 needed to win. The conservative Samaras said national elections, the fourth in six agitated years of financial crisis, will be held "at the soonest possible date" - that is, Sunday, January 25. After the third and final round of voting, according to the constitution, the vote's failure meant that parliament has to be dissolved within 10 days. "The country has no time to lose," Samaras said. Greeks must "learn the truth about how easy it is to relapse into the deepest and most dramatic crisis." ~~~~~ The failure of Samaras to hold his coalition together set off financial concerns as investors fear a victory by the main opposition party that wants to renege on the country's bailout deal with the European Union and the International Monetary Fund. The Athens stock market closed 3.9% lower, recovering from an early 11.3% dive on news of parliament's failure to elect a new president. Investors fear the left-wing opposition Syriza party, which has a narrow but steady lead in opinion polls, might use popular resentment at six years of government austerity agreed to by the Samaras coalition as a means to seek an overhaul of the international bailout deal. ~~~~~ At the height of the eurozone crisis from 2010 to 2012, Greece's financial turmoil risked breaking up the euro currency union, which would have shaken the global economy. Now, Greek debt is not held by private international investors, but by its bailout creditors, the IMF and other eurozone countries. Also, the EU and European Central Bank now have programs designed to stabilize markets and bolster confidence in eurozone markets. Thus, a Greek default now would be much less of a threat to the eurozone than a few years ago. However, if a new Greek government seeks changes to the bailout deal, Greece's access to credit would be delayed just as its bailout loans are coming to an end. Greece still cannot finance itself independently on bond markets, so it faces the danger of a default that could hurt the finances of fellow European countries. The IMF said today a current review of Greece's bailout program - which will decide if the payment of the next batch of rescue loans will be made - is now on pause and will resume only after the January election. Fortunately, Athens faces no immediate financing needs. The review has been stalled for months due to disagreements on new spending cuts. ~~~~~ Most of us remember the crisis when Greece lost market confidence and nearly went bankrupt in 2010, after years of profligate spending, dodging public sector reforms and hiding the extent of its expanding and failing public finances. The austerity programs forced on Greece by the EU and IMF as tbe price of a bailout beat down incomes and living conditions and sent unemployment to a post-World War II high. Growing public resentment fuelled support for anti-austerity parties, from Syriza - whose pre-crisis support was under 5% - to the neo-nazi Golden Dawn. Samaras and his conservative party forged a coalition with their historic socialist rivals to hammer out further draconian spending cuts that finally balanced the budget and led to a modest economic recovery this year. ~~~~~ Here's what a Greek newspaper is reporting about various Greek political groups' reaction to Samaras' dissolution of parliament and call for elections. THE LEFT. The Syriza party has pledged to roll back some of the reforms Greece implemented to qualify for 240 billion euros in rescue funds. But it has recently softened its rhetoric about unilaterally pulling out of the bailout deal. Syriza leader Alexis Tsipras said that Monday's vote marked an "historic day for Greek democracy." He added that in a few days, the austerity program enacted under the leadership of Samaras will disappear : "With the will of our people, in a few days, the austerity agreements will also belong to the past." ~~~ Syriza MP Panagiotis Lafazanis argued that the coalition government parties suffered a defeat in parliament today and claimed that it would be “crushed” at the upcoming elections. Lafazanis claimed that his party would receive the parliamentary majority and argued that the bailouts are in play and “the troika’s presence in the country will end." ~~~ The general secretary of the Communist Party, Dimitris Koutsoumpas, said that “we have paid enough for the lies of the EU parties. We have bled enough for the monopolies.” He called for popular support in the upcoming general elections. Communist party MP Thanasis Pafilis urged the people to reject the scaremongering of the coalition. ~~~ The leader of the Democratic Left Fotis Kouvelis told journalists that “the government chose to bring national elections forward with the presidential election. Today will be the start of new developments and that the people should unite to elect a government that will “attain a progressive nature.” ~~~ The leader of The River, Stavros Theodorakis, commented that current politicians “have played their political games guided by partisan stubbornness. Now it is the time of the people” and called the Greek people to defy “blind partisanship,” claiming his party is ready for the major challenges. ~~~ THE CENTER. The president of the Independent Greeks, Panos Kammenos, said the Samaras-Venizelos parenthesis has closed, the duo that surrendered the country’s sovereignty is finally abandoning the government. Kammenos added that his party “will now act as guarantors” while calling for a national consensus. ~~~ Following the conclusion of the vote in Parliament, independent MP Petros Tatsopoulos said the vote resulted in “a very extreme polarization” and added that “it would be good to not cultivate that climate in the election campaign period.” ~~~ THE CONSERVATIVE COALITION. The government Vice President and PASOK leader, Evangelos Venizelos said that the snap elections “were forced” and that the future of the economy is uncertain, while professing that his party will protect the “dramatic sacrifices of the Greek people” and that “PASOK will be the guarantor of orderly developments.” ~~~ The New Democracy MP Yannis Tragakis told journalists that those who forced the early elections “will not be in the next Parliament" and are leading this country to elections in which “the people will punish them.” ~~~ New Democracy’s Dora Bakoyanni claimed that the opposition forced the general elections “against the will of the Greek people” and estimated that the elections would take place under very difficult financial circumstances. ~~~ The Minister of Finances, Gikas Hardouvelis, commented that at present there were no funding problems and that should the need arise, the government can issue treasury bills. Hardouvelis pointed out that he predicted that the Greek State may need to do so in March. ~~~ Conservative Prime Minister Samaras said “Unfortunately a minority of 132 MPs want elections.” Samaras commented that “early elections...entail serious dangers” and claimed that “the great majority” oppose early elections. Samaras added that “a minority of 132 MPs, amongst which Syriza and Golden Dawn, are dragging the country to elections.“ ~~~~~ Dear readers, we often view the ongoing Greek fiscal problems through the filter of the EU and IMF. These comments show that Greek political parties are making their cases to the Greek people in the way any functioning democracy does. But, there is a shadow hovering over Greece. It is the European Union's eurozone club, led by Germany. Greeks blame Germany for the extreme austerity that almost brought down the Greek social fabric. And, current official German comments show that the German position has not softened. German Finance Minister Wolfgang Schaeuble warned today that Greece "has no alternative" to the hard reforms it has undertaken, as he commented on Monday's developments in Greece : "New elections change nothing about the agreements that the Greek government has entered into. Any new government must stick to the contractual agreements of its predecessors." It is precisely this attitude of the German political machine of Chancellor Angela Merkel that has alienated Greek voters and given the leftist Syriza party and the neo-nazi New Dawn party the chance to once again destabilize Greece in their attempt to grab power from the more moderate center left and conservatives. And the German rigidity continues to irritate and alienate the French, Italians and Spanish, as well as the frank-speaking British Prime Minister David Cameron. The EU is not out of the survival-or-collapse woods yet.