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Financial Crisis

Round One to Radical Left, Round Two to Europe?

ATHENS, May 12 2012 (IPS) - Kosmas Bitros (29) didn’t “believe in politics and in elections as a way of changing society”. Still, he showed up at the ballot boxes for the first time last Sunday to cast a vote against austerity in the Greek national elections.

Though he did not identify with one particular party, Bitros believed it was a matter of great urgency to bring down the two-party regime, comprised of PASOK and the New Democracy (ND) party, which has dominated Greek politics for the last 30 years.

He cast his vote for the Coalition of the Radical Left, or Syriza and went out with friends. At night they gathered together to watch the results and for the first time ever Bitros witnessed what he had believed was impossible: Syriza was coming second with 16.7 percent of the vote, just behind the right wing ND, with 18.8 percent.

“The (old regime) was corrupted, they have destroyed the country and they didn’t want to give up power,” Bitros told IPS.

“When the (economic) crisis came, I realised how defenseless we are, how they are playing with our lives without care.”

Although he was hesitant to vote, believing his actions to be of little consequence, he finally understood that politicians “cannot destroy democracy completely. You have to use even the most marginal chance you have to push things where you want to see them, not let go,” Bitros added.

The outcome of the election proved that scores of other Greeks felt exactly the same way.

The size of the ‘protest vote’ in Greece was directly proportional to the level of frustration among ordinary people in the country whose lives have been turned upside down by sweeping cuts in public spending mandated by the so-called austerity programme that has gripped the country since May 2010.

Guided and coerced by the Troika – the European Commission, the International Monetary Fund and the European Central Bank – Greek politicians slashed pensions, government salaries and public services in an effort to close the country’s massive deficit and receive billions of dollars in bailout loans from the international community.

Rather than pull the country out of recession, the austerity era ushered in an unemployment rate of 22 percent, as well as a new class of poor, disenfranchised and desperate Greeks, who turned out in droves over the weekend to demolish the two traditional political forces in the country.

The former socialist-turned-neoliberal PASOK party went from 43.9 percent of support in 2009 to just 13.5 in this election; while the ND, notorious for being the party that governed the country from 2004 to 2009, also experienced a huge drop in popularity.

“The protest vote was an anti-bailout vote,” economist Leonidas Vatikiotis told IPS. “The election produced a fragmented political environment that gave rise to political forces of the left and the right, and brought into the parliament the neo-Nazi Golden Dawn,” a party that has risen from a marginal fascist group to a parliamentary party with seven percent support.

“You look at the picture after elections and understand that people do not trust austerity as a solution. Three years of austerity have pushed the country’s debt from 125 billion to 165 billion. Public finance consolidation has not happened despite the remarkable sacrifices people have put up with. In the end, we do not believe in austerity and Europe needs to get that message,” Vatikiotis stressed.

News of François Hollande’s victory in France fueled optimism in Greece that an alternative coalition could renegotiate the terms on which Greece settles its debt with the outside world, particularly with the international financial institutions (IFIs).

Europe on edge

European officials are extremely alarmed by the prospect of an anti-bailout front being formed in Greece, and of a European swing against austerity following elections in Greece and France.

On Tuesday German officials responded by issuing several warning statements in the international press. Chancellor Angela Merkel personally excluded the possibility of renegotiating the European public finance agreement put in place at the end of last year, which imposes very strict rules on how member states run their public finances, as well as severe penalties for those who fail to comply with the so-called regulations.

The country is expected to face enormous pressure at the beginning of next week when the Council of the European Ministers of Finance (ECOFIN) convenes in Brussels.

European Commissioner Jose Manuel Barosso, European Council President Herman Van Rompuy and Vice- President of the Commission, Olli Rehn, rushed to warn the country that if Greece failed to observe commitments made in the bailout agreement, its status in the eurozone would be at stake.

German finance minister Wolfgang Schauble was more succinct, saying the country could not “have the euro without the austerity agreement. If it seriously observes its commitments then we will observe ours as well. But if Greece decides not to stay in the eurozone, we are not able to coerce it.”

Europe bureau chief for the U.S.-based McClatchy news service, Roy Gutman, has described the German official’s words as “a direct intervention into another country’s politics. The German finance minister goes beyond commenting on political developments in Greece to telling the people there what he wants them to do,” he said to IPS.

Meanwhile, inside the country, leaders of the pro-austerity coalition have warned that the anti-bailout rhetoric and promises made by Syriza’s leader, Aleksis Tsipras, are jeopardising progress in the country, for which millions of Greeks have made huge sacrifices in recent years.

For now it seems that no amount of scare tactics and criticism can turn the tide of support away from Syriza. The latest poll leaked to the press two days ago shows the party’s popularity increasing by the day.

Perhaps the only thing that could reverse the momentum would be the formation of a national salvation government, which PASOK leader Evangelos Venizelos has invited all parliamentary parties to do. He is also pushing ahead with efforts to prevent a head-on collision with Brussels and Berlin; but time is running out.

According to the constitution, if talks convened by Greek President Karolos Papoulias fail to produce a coalition government by the beginning of next week, the country will be forced back to the polls in a month’s time. So far, neither side has budged.

“European officials and Greek politicians should think seriously about the fact that the Greek political stalemate might lead us into a head-on confrontation between anti and pro-austerity forces,” said Vatikiotis.

“The fear of punishment has coerced Greeks into accepting austerity but after Sunday’s elections this bond has been broken. More coercion of this kind now might produce unpredictable results.”

If it comes down to it, he said, people will realise that the choice before them in a second election will not be between parties that are for or against austerity but between a sovereign, democratic country or a future in the eurozone.

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