ATHENS – With international lenders ready to fork over another $172 billion in rescue loans, the pressure is off Greece’s hybrid government for now and the PASOK Socialists and their bitter rival New Democracy Conservatives sharing power for now have started going at each other ahead of the May 6 election and put the reforms they promised on the back burner. The first issue of contention is helping beleaguered Greeks work with banks to restructure their loans after the government imposed losses of 74 percent on investors and is set to recapitalize the Greek banking system with $65 billion.
With his party’s support falling rapidly as the front runner, New Democracy leader Antonis Samaras, who has flipped and flopped over opposing austerity measures, then supporting them, and now opposing them again, and opposing cutting pensions and then supporting the cuts and saying now he opposes what he supported, called on banks to let Greeks pay lower interest rates and have more time to pay off their loans, even though they won’t be able to have the same deal as the government.
PASOK, now led by former Finance Minister Evangelos Venizelos, who doubled income and property taxes and taxed the poor, said that is already being done for 800,000 Greeks and took credit for it while taking swipes at New Democracy, showing the campaign is in full swing. “We are glad that, even belatedly, New Democracy is supporting the positions adopted in Parliament by the PASOK leader, when he was finance minister,” said the Socialists in a statement. While the banks let the government off the hook, pay back only 26 percent of what is owed, and are being recapitalized with taxpayer money, they are pressing Greeks who’ve had their pay cut and taxes raised to pay back 100 percent of what they owe.
In the meantime, promised reforms such as opening closed professions and pushing privatization have mostly been set aside for the next government, frustrating interim Prime Minister Lucas Papademos, who has been unable to get his feuding partners to work. Greece is surviving on a first bailout of $152 billion from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) while awaiting the next bailout, but both deals came with conditions of big pay cuts, tax hikes, slashed pensions, the coming firing of 150,000 workers over the next three years, cutting the minimum wage 22-32 percent, and phasing out collective bargaining rights for workers, effectively nullifying the trade unions that have mostly supported PASOK. Private companies have also responded by beginning to make big cuts in salaries for their workers.
With the campaign raging now, Samaras has started to up the populist ante as New Democracy has fallen to 22.5 percent, down 2.5 percent in less than a month, while PASOK, after naming Venizelos to replace former leader George Papandreou, who resigned as Prime Minister nearly five months ago after two years of protests, riots and strikes against austerity, has risen from 11 percent to 15.5 percent, solidifying its hold for now on second place. Still, the combined totals for the two front-runners mean neither would have a majority in Parliament and would have to form again a coalition with each other although they are ideological opposites and have been fighting with each other, raising the prospect that reforms demanded by the Troika would not be fulfilled and raising the likelihood the money pipeline would stop.
Trying to stop his party’s slide, Samaras said he would remove a second property tax imposed by Venizelos, which is put in electric bills, and replace it with a unified tax bringing together all property levies although he didn’t say if that would result in a decrease in overall tax bills. He also said he doesn’t want further pension cuts but didn’t say if he could stop them.
With his party losing support to anti-bailout parties, including the Independent Greeks formed by members he threw out of New Democracy for refusing his orders to support austerity measures he previously told them to oppose, Samaras is inviting some of them back to shore up his lagging popularity. Meanwhile the founders of another new party, the Social Pact, former PASOK ministers Louka Katseli and Haris Kastanidis, gave a press conference in Thessaloniki, saying they were open to work with “progressive” groupings but not with PASOK or New Democracy, showing how fractured the Greek political scene is.
Samaras again appealed to voters to give him a majority, as unlikely as it seems, as he said he doesn’t want another coalition government. He said if he wins outright it would put him in a better position to make Greece’s case internationally, although the Troika said his hands were effectively tied when he pledged to support more austerity measures although he said he wants to try to renegotiate that. “Untie my hands so I can govern,” Samaras said. The polls are changing constantly now though and a Public Issue poll suggests that PASOK has won back some of the support it lost to Democratic Left as the leftist party saw its backing drop from 15.5 percent to 12, which is the same as the Communist Party (KKE.) The Coalition of the Radical Left (SYRIZA) rose slightly to overtake both of them with 12.5 percent. SYRIZA leader Alex Tsipras said PASOK and New Democracy are trying to make Greece like Romania during the Communist era.
The right-wing nationalist of Popular Orthodox Rally (LAOS), which briefly served in the coalition saw its popularity drop from 4 percent to 2 percent, which would leave the party with no parliamentary seats forcing out its leader George Karatzaferis. The Independent Greeks, led by New Democracy outcast Panos Kammenos, have gained even more support. According to the poll, their backing rose from 6.5 percent to 8.5 in just two weeks. In his interview with Sunday’s Kathimerini, Samaras pledged that as prime minister he would not seek to raise taxes to help find the $16 billion of savings that the troika has demanded for 2013 and 2014 and that he would try not to cut pensions again, although he offered no plans on how to do either.