By Patricia H. Kushlis
Now that the Greek parliament has approved the latest round of internationally imposed austerity measures to shore up the flailing Greek economy with new loans one of the looming questions is whether the government – and the country – can remain politically stable enough to deliver on its promises to its international creditors.
Or can Greece only be politically stable if it doesn’t? Or if PASOK, the ruling socialist party, falls whether center-right New Democracy, its chief opposition, could do better – or even as well - in running the country during this time of extreme crisis?
Recent past a guide?
If the recent past is a guide, there are valid reasons for skepticism all around. Polls suggest that if an election were held today, PASOK would lose. But would New Democracy, the major party on the center right, win? And if so, could ND keep the country together enough to govern in the upcoming sprint, let alone set things right for the country’s economic marathon?
Are the internationally imposed terms too onerous? Is the economy too weak to respond? Will these neoliberal conditions of the IMF and EU continue to weaken, not strengthen, Greece’s ability to expand in a period of recession and do what the foreign regulators tell the country it must do to put the Greek house of cards in order with hyper-charged Greeks on the streets battling police in front of the television cameras as well as many more indoors unwilling or unable to meet the difficult conditions set?
It’s ironic that PASOK, the country’s Social-Democratic party, was the one to have to impose economic austerity on the Greeks although in Greece, political labels are not all they seem.
Much of the economic damage was caused earlier by New Democracy(ND), PASOK’s center-right opponent, that had used the government bureaucracy to provide jobs for supporters and bowed to union pressure to lower the retirement age and increase pensions – then lied about the dire financial straits the country was in before conveniently losing the election in 2009.
In truth, the Socialists had also employed more than their fair share of these same questionable vote-getting practices over the years. The bureaucracy was far too large for the country’s needs, but the excesses were not as nationally devastating during the good times. Meanwhile, the military has consumed too much of the country’s budget for years – a hangover from the Cold War - as well as the country’s continuing feud with neighboring Turkey.
Can the private sector step up to the plate?
The Cold War is long over and the Greek-Turkish relationship has improved – so the decrease in the defense budget agreed to by PASOK as part of the new loan terms makes good sense. But will it just put more people out of work? And will the private sector create more jobs – enough to compensate for the shrinking of the civil and military services in store? Or will more and more Greeks emigrate to Germany, Australia and elsewhere out of desperation to seek the time-honored way out to a better life?
When I worked in Greece from 1981-84, the then ND government had imposed an incredibly counter-productive law that allowed private schools known as “frontesteria” to increase teachers salaries every year (as much as they could negotiate) but restricted the amount the institution could charge students for tuition.
Hello there, with unionized teachers demanding, let’s say, 16 percent annual raises, inflation running about the same while tuition (the primary income source) could only be raised by 10 percent, it doesn’t take a genius to recognize that this was a recipe for private sector institutional Armageddon. And this was imposed by the political party that supposedly represented business.
Tax evasion - age old Greek custom hard to break
That very wealthy Greeks avoid taxes comes as no surprise. This is an age-old Greek tradition and its not just the wealthy. Meanwhile across the Atlantic, their rich American cousins – and I don’t mean just wealthy Greek Americans - are doing well as tax evaders, too.
What distinguished Greek businesses the most from the American, however, was and is the near dearth of large private Greek companies. This - decades if not centuries old - phenomenon happened for both political and legal reasons. I remember talking with a Greek ship owner years ago who explained why his family had gone into the ship owning business. To put it in a nutshell, ships can be moved and reregistered in the event of a country’s political instability or economic collapse; factories can’t.
Meanwhile, for those Greek industrialists and other owners of large land-based businesses, their holdings were often chopped into smaller pieces to keep them below the radar screen. Besides the smaller a business, the more likely the employees were all in the family and the unions and tax collectors, therefore, kept at bay. Besides, most Greeks prefer being their own bosses – and who can blame them.
Just last week, Prime Minister George Papandreou, PASOK’s beleaguered prime minister, proposed the formation of a unity government between PASOK and New Democracy before the parliamentary votes needed to approve the latest austerity package. It may have been a last ditch effort by Papandreou to keep enough of his party in line for the difficult votes and times ahead.
A unity government not in the cards - right now
Regardless, Antonis Samaras, head of ND and Papandreou’s one time Amherst College roommate with whom he had a falling out some time ago, refused the offer. Whatever Samaras’ reasons, I wonder if it wouldn’t have been better for the country if Samaras had agreed. Let’s face it, could New Democracy really govern alone if labor strikes multiply exponentially and Syntagma Square and the streets that radiate from it are filled with PASOK green as well as the red of the Communists, black of the anarchists and the politically unidentified already there?
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