This article was originally posted on www.teaandtoast.ie on Monday, June 18, 2012. Information accurate as of midday Irish time on that date.
People might well have forgotten that there was also
a parliamentary election in France on Sunday, given the scarcity of column
inches devoted to it in newspapers and websites outside of France. Tomorrow’s
European papers may mention the electoral success of the Socialist Party,
together with the fall of three big names in French politics, the Socialist
Party’s Ségolène Royal, three-time presidential candidate François Bayrou and the National
Front’s Marine Le Pen, all of whom failed to win seats in the new parliament.
But the main political news over the weekend was the
latest election in Greece, coming six weeks after an inconclusive election
which failed to see a government formed. The three parties that had formed a
government of national unity late last year (PASOK, New Democracy and LAOS)
suffered at the hands of a public that was more than angry with five years of
recession, very high unemployment and a series of austerity budgets that had
done little to improve the economy. After the May
election, the centre-left PASOK (Panhellenic Socialist
Movement) party haemorrhaged support, plummeting from the 44% it won in 2009
(which allowed it to win an overall majority in parliament) to just 13%, as
voters punished the party for imposing strict austerity policies without any
improvement in the national economy.
PASOK was not the only party to endure the wrath of
angry voters in May. The centre-right New Democracy had also supported continued
austerity measures in order to secure further Greek access to the European
Stability Mechanism. However, though it lost nearly half of its voting share,
New Democracy managed to gain an extra seventeen seats, as the party took
advantage of Greek electoral rules of reinforced proportionality that give
fifty extra parliamentary seats to the party that wins the most votes. LAOS
(The Popular Orthodox Rally), a right-wing populist group, lost all sixteen of
its’ seats in parliament as a result of its support for the unity government,
even though the party withdrew it in April, in protest at a further package of
austerity measures.
The big winners were the parties that rejected the
continuing austerity programme and who wanted either a renegotiation, or a
complete scrapping, of the country’s bailout programme from the European
Central Bank, the European Commission and the International Monetary Fund (the
famous ‘Troika’). SYRIZA (Coalition of the Radical Left), a coalition of centre
and radical left parties, surged from less than 5% of the vote to securing
one-sixth of public support, taking advantage of widespread dissatisfaction
with PASOK to quadruple its number of seats in parliament, while the
euroskeptic, communist KKE also increased its share of the vote. The
Independent Greeks (ANEL), formed after a split in New Democracy, and
Democratic Left (DIMAR), formed after a split in PASOK, together won over fifty
seats after campaigning on anti-austerity platforms, while the far-right Golden
Dawn entered parliament for the first time, as its share of the vote exceeded
the mandatory 3% needed to claim seats.
After attempts by the leaders of each of the three
largest parties to form a government failed, as well as a final, neutral
attempt by the President of Greece, Karalos Papoulias, another election was
called for June 17. The pro-bailout New Democracy and PASOK had fallen one seat
short of an overall majority, and the anti-bailout SYRIZA refused to join a
coalition that would continue with the existing austerity programme.
The second election campaign of 2012 focused on
Greece’s relationship with the rest of the European Union and the Troika, and
on the country’s continued presence in the euro, as economic reality meant
Greece required more bailout money to service its debts and balance the
national budget. The leader of New Democracy, Antonis Samaras, portrayed the
election as a referendum between staying in the euro or
leaving the common currency and returning to the country’s legacy currency, the
drachma, an assessment that was supported by the Finance Minister of Germany, Wolfgang Schäuble, who told reporters after a
European finance ministers meeting in Brussles that “If
Greece -- and this is the will of the great majority - - wants to stay in the
euro, then they have to accept the conditions [of the bailout programme between
Greece and the Troika]. Otherwise it isn’t possible. No responsible candidate
can hide that from the electorate.”
SYRIZA, under the leadership of Alexis Tsipras,
rejected this analysis, stating that the election was really about choosing which
economic policy would help Greece exit the continued situation of recession and
high unemployment. The party would keep its pledge to tear up and renegotiate
the bailout programme, which had planned for a total of €240 billion to be given
to Greece, in return for severe budget spending cutbacks and increased taxes.
Following the close of polls on Sunday evening, the
exit polls released immediately afterward did not give much hope for the
formation of a stable government from either side of the austerity divide. The
exit polls declared the result to be too
close to call, with New Democracy and SYRIZA both
expected to poll somewhere between 26% and 29%, with PASOK lagging well behind
in third place.
The exit polls were proven largely correct, as is
their habit, with New Democracy winning a plurality of support on 29.66%, with
SYRIZA a close second on 26.89%. As the leading party in parliament, New
Democracy will claim the fifty seat bonus given to the largest party, and Mr.
Samaras will have the first opportunity to form a government. But both parties
can claim success, as they both enjoyed big gains compared to their results in
May, while every other party lost voting share, with the exception of DIMAR,
which increased its vote marginally, but still dropped seats.
Between them, New Democracy and PASOK, both
supportive of the bailout programme, will have enough seats between them to
form a coalition in the new parliament. Unfortunately, two major problems stick
out. The first, though minor in the context of the severe economic straits
Greece finds itself in, is that New Democracy and PASOK are traditional rivals,
from opposite sides of the political spectrum, and were the two big parties in
Greek politics for four decades, from the restoration of Greek democracy in
1974 until PASOK’s trouncing at the polls last month. On the other hand, both
parties are supportive of the bailout programme and have shown willingness to work
together to continue the painful process.
The second, more difficult, problem is that PASOK do not want
to enter into a coalition without SYRIZA and DIMAR also taking part. A cynical
view of this would claim that this is to help restore PASOK’s fortunes at a
future election; if the other left-wing parties also took part in a coalition
government, they would lose support at the next poll, with PASOK standing to
make most of the gains as traditional supporters return to the party. In any
event, this expressed wish is fanciful because SYRIZA have frequently stated
that would not join or support any government that wanted to continue with the
bailout agreement as it currently stood. On Monday, SYRIZA said
that it would become the main opposition party, committed to opposing the
bailout programme. In effect, the fundamental conflict between the parties on
what was the key issue of the election means that someone has to make a
complete concession in order for a grand coalition to be formed. Should
attempts to form a government once again fail, Greece faces the prospect of yet
another general election, possibly as soon as late July.
This nightmare prospect is still in the middle
distance as of now. For the moment, the results have partially soothed
international markets and politicians. Ahead of the vote, there had been
genuine fears for the stability of the euro, as political uncertainty in Greece
threatened to derail attempts to restore faith in struggling European
economies, as well as relations between Athens and the rest of the bloc. At a
rally in central Athens on Sunday night, in what could be described as a
victory speech, Mr. Samaras declared that “The Greek people have voted for a
European future for Greece. There will be no doubt about the position of Greece
in Europe”. Opponents could well dispute this assertion by pointing to the
election results, which showed that three-fifths of voters in fact cast ballots
for parties which rejected the bailout programme.
Hopes for some market stability proved very
short-lived, as on Monday morning the yield on Spanish ten-year government bonds
climbed
above the 7% mark which economists view as being unsustainable. Greece had been
the main difficulty facing the euro over the weekend, but other issues remain
in place.
Politically, New Democracy’s narrow win was welcomed
by leaders across the world. German Chancellor Angela Merkel telephoned
Mr. Samaras to congratulate him, but reaffirmed her repeated statements that
Germany expected Greece to “respect its European undertakings” and continue
implementing the austerity programme. Other European leaders have also remained
firm on Greece’s future, insisting that continued adherence to the bailout
programme was mandatory in order for Greece to remain within the eurozone. But
the overall picture of Greek politics still as polarised as it was after the
May elections. Even if New Democracy and PASOK were to form a coalition on
their own, the government would have a very small majority, certainly less than
ten and perhaps little more than five, hardly a strong enough government to
last very long should continued austerity and increased public anger make
backbench government MPs nervous enough to withdraw their support. The people
of Greece may have just spoken for the second time in six weeks, but they may
have to repeat themselves later in the year.
