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The Economist: No Trickle-Down Gains For Samaras

poverty-in-greecePrime Minister Antonis Samaras and his conservative New Democracy party isn’t getting a big bump out of an array of good economic news as it faces a stern test in next month’s critical elections for Greek municipalities and the European Parliament.
Samaras has been touting what he calls a “success story” and looming recovery from a seven-year-long recession but The Economist magazine said he’s not seeing a significant trickle-down effect.
He’s backed by a primary surplus of 1.4 billion euros, 70 percent of which he said he’ll return to low-income pensioners, the military and emergency personnel ahead of May’s ballots.
Greece this month also floated a sovereign bond for the first time in four years, a 3-billion euro five-year instrument that was eight times oversubscribed although skeptics said that was because investors want to cash in on a 4.75 percent interest rate.
German Chancellor Angela Merkel, the day after the bond float, returned to Athens to show support for Samaras’ continuing imposition of reforms and pay cuts, tax hikes, slashed pensions and redundancies she insisted upon in return for backing international loans of 240 billion euros, mostly from Germany.
The country is poised for a second consecutive record-smashing tourist season after a disastrous 2012 when people stayed way after seeing images of protests, strikes and riots against austerity.
But for all that, Samaras’ party still faces a stern test from the anti-austerity main opposition Coalition of the Radical Left (SYRIZA) in May polls while his coalition partner, socialists PASOK – who won 44 percent the vote in winning the 2009 elections – are now at between 3 percent and 5 percent as the good economic news isn’t trickling down in the ruling parties’ favor.
That was the assessment from The Economist in a piece that described how Greece’s political landscape is shifting, as PASOK, fearing extinction, clings to the edges of a new center-left alliance Elia (Olive Tree) that has failed to garner much attention.
The real excitement is around the new party To Potami, (The River) founded by former TV presenter Stavros Theodorakis around a populist anti-politician theme that is resonating with voters, and which has risen to third place in polls.
It’s just ahead of the ultra far-right Golden Dawn, whose leaders have been arrested or jailed pending trial on charges of running a criminal gang. Disaffected voters who flocked to the extremists are shifting toward To Potami, it seems.
While Samaras has been pointing to the numbers he said buoys hope, he hasn’t mentioned those that don’t, The Economist noted.
Unemployment fell slightly in January, but still stood at 26.7 percent. The social safety net is stretched so thin that only one in ten of the unemployed gets any benefits. Private-sector workers complain of being paid months in arrears.

“No wonder Greece’s clientelist political system is in tatters. It was once a politician’s responsibility to find jobs in the public sector for his (rarely her) constituents. Ambitious MPs extended their patronage to the private sector,” the magazine wrote.
Voters still blame New Democracy and PASOK for creating the economic crisis yet strangely returned the conservatives to power in 2012, although without enough of the vote to rule, forcing Samaras to form a coalition with his dreaded socialist rivals.
PASOK is in near chaos and has been overwhelmed by its hated ideological look-alike in some ways, SYRIZA, although the radicalists’ leader Alexis Tsipras scares the bejesus out of European Union leaders with his firebrand talk of imposing a wealth tax (Greece’s rich are prospering while the country suffers) and suspending payments to the Troika of the EU, International Monetary Fund and European Central Bank.
Samaras hasn’t seemed to suffer much damage from the embarrassing revelations that his former cabinet secretary was shown in a secret video telling Golden Dawn spokesman Ilias Kasidiaris charges against the extremists were concocted to get its votes, but he hasn’t gotten a big bump either from the good economic news.
Samaras, for all that, is still a runaway choice to be prime minister over Tsipiras, although not if SYRIZA wins big next month and forces early national elections before the government’s term runs out and then comes to power.
In the background, meanwhile, former premier George Papandreou is seemingly trying to wrest back control or influence over the PASOK party his father founded.
Papandreou was hounded out of office in 2011 by relentless protests against austerity he imposed after promising Greeks, “The money is there,” for him to keep continuing the breakneck spending pace that broke the country.
Now, with PASOK leader Evangelos Venizelos – who Samaras made deputy premier and foreign minister in return for backing austerity – trying to ride the coat-tails of Elia, Papandreou has refused to give his support to the move.
While fringe parties typically fare badly in Greece, many of them founded by outcasts and rejects from the mainstream parties, the big winner seems set to be To Potami, although it has no chance of taking the top spot, but of inflicting damage to whoever does.
The Economist said that the 50-year-old Theodorakis, wearing a T-shirt and trainers and carrying his trademark backpack, tours the country making low-key speeches about cracking down on tax evasion, promoting meritocracy and creating jobs for young Greeks. “These are soothing sounds for voters fed up with traditional politicians,” the magazine said.
While there are underground criticisms that To Potami is being backed by big business as a straw-man party to bring down SYRIZA, Theodorakis said it’s being funded by small donations and wants nothing to do with the mainstream parties, who get big chunks of public money.
PASOK owes banks 140 million euros it isn’t paying and that gave Theodorakis a perfect rejoinder when he was questioned by a leftist MP as to where the new party was getting its money.
“It takes a lot of chutzpah to ask about our campaign when your party has dumped 140 million euros on the Greek taxpayer,” Theodorais said. There was no comeback.

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