Venizelos, Trying to Rebuild PASOK, Changes Tune on Austerity

ATHENS –  New PASOK Socialist leader Evangelos Venizelos, trying to resurrect his party after a disastrous third place finish in the June 17 elections which saw voters repudiate his support of austerity measures demanded by international lenders, is making a U-turn on some of the policies he backed and said the country needs more time to impose additional reforms.
Venizelos, who as Finance Minister in a previous shaky hybrid government with New Democracy which won the polls, doubled income and property taxes, taxed the poor and imposed losses of 74 percent on the country’s private investors, locking Greece out of the markets for years and almost destroying the banking systems of Greece and Cyprus.
Now, he said – echoing new Prime Minister Antonis Samaras of New Democracy – Greece needs three more years to make another $15 billion in spending cuts insisted upon by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) as part of a second bailout, this one for $173 billion. Greece is surviving on a first round of $152 billion in rescue loans. His turnabout came after meeting Troika leaders who came to Athens. PASOK and the tiny Democratic Left are supporting New Democracy in a tripartite coalition but would not let any of its members join the government’s Cabinet, a move critics said was designed to let them disavow Samaras if he fails.
Venizelos was the face of austerity, the devastating pay cuts, tax hikes and slashed pensions that worsened the country’s five-year recession, created 22.6 percent unemployment, shrunk the economy by 6.7 percent and led to the closing of 1,000 businesses a week. He insisted that Greece had to follow the Troika’s orders and that austerity was the only way out. Now he has had to admit that the recession that the austerity he supported has made the economy worse, not better, and Greece cannot meet the Troika targets he backed.
Greece is behind schedule on meeting reforms, partly because of a two-month limbo to hold two elections that suspended government activity. After his meeting with the Troika, PASOK group put out a statement as Greek political leaders prefer to avoid press conferences or taking questions from reporters. The statement was that, “Mr. Venizelos insisted on the need to agree on a new, updated medium-term fiscal strategy program. He raised the issue of revising the bailout in line with the procedures foreseen in it and extending the time period of the fiscal adjustment to three years.” There was no elaboration on how he thought Greece could do that as the Troika has warned that any attempt to tinker with reforms could lead the money pipeline being shut off, and Greece is only weeks away from running out of cash without the next loan installment.
Samaras and Venizelos were backers of austerity, but after being pushed hard by the anti-austerity Coalition of the Radical Left (SYRIZA) which finished a close second in the elections, have backtracked. Samaras said he would continue to impose the measures but wants to try to renegotiate them, but SYRIZA said he has caved in to the Troika already.
Venizelos, addressing a party summit, said he would re-establish his party, which got only 12 percent of the vote this time after winning 44 percent in 2009 when it swept into office before the crisis nearly killed it off. He said that,  “The small but resilient percentage of PASOK is not what has been left from the majority percentages of older contests, but the yeast from which the recreation of the party will emerge.” Accusing others of “abandoning ship like rats” while he and other party officials took difficult decisions, he said that party had to move on but that its roots would not change.  Although under former leader and then Prime Minister George Papandreou, PASOK went against all the principles of its platform. “We are proud of our name and of our symbol,” he said. He said he was looking forward to seeing Greece escape from under international lenders although his support of policies to essentially put Greece on welfare means that it could be many years before that happens.
Meanwhile, a Metron Analysis opinion poll published by weekly newspaper Ependytis showed Greeks are equally split on whether the country should stick to the agreed bailout terms or ditch them. The poll showed 48 percent were in favor of sticking with the bailout and efforts to improve it, while another 48 percent believed it should be renounced for having failed. A 55 percent majority thinks Greece will avoid bankruptcy versus 40 percent who believes it will not. And some 56 percent believe the Eurozone of the 17 countries using the euro will survive but 39 percent do not. Greece’s crisis has been cited as a major reason why the Eurozone might crumble as previous governments lied about the country’s economic condition.