Election threatens Greek stability

THE CREDIBILITY of Greece’s political class has sunk so low that both main parties of the centre-right and centre-left have faced…

THE CREDIBILITY of Greece’s political class has sunk so low that both main parties of the centre-right and centre-left have faced problems finding suitable candidates to stand for election early next month.

Politicians have been widely denounced as “thieves and traitors”, reflecting a populist view that their corrupt practices while in government were responsible for triggering Greece’s financial collapse.

One veteran political organiser for New Democracy, the conservative frontrunner, said: “The pool of potential candidates [for both main parties] has shrunk, especially in the provinces . . . Both respected professionals and prominent local government officials have been turning down offers.”

“There are fewer people than usual aspiring to run,” said a senior member of Pasok, the Panhellenic Socialist Movement that is in coalition with the centre-right under Lucas Papademos, the technocrat prime minister.

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Campaigning has started for an election expected to take place on May 6th, even though the date will not be officially announced until midweek, after parliament has approved another package of structural measures.

Opinion polls at the weekend showed Pasok and New Democracy would together capture only 40-41 per cent of the vote, well short of the 50 per cent seen as critical for maintaining the reform process.

International lenders are counting on Pasok’s Evangelos Venizelos and Antonis Samaras, the centre-right leader, to renew their coalition after the election with the aim of hauling the country out of recession by the end of 2013.

But most voters look set to back half-a-dozen small opposition parties that oppose the reform effort, from the Greek Communist party to the far-right Chrysi Avgi (Golden Dawn).

Mr Venizelos is struggling to win back dissatisfied socialists and also gain support from swing voters in the centre, while New Democracy has been hard hit by the defection of Panos Kammenos, a popular backbencher.

Mr Kammenos’s new Independent Greeks party, which opposes further reforms, could capture as much as 10 per cent of the vote. The backlash reflects a popular protest against the impact of austerity: cuts of 25 per cent in wages and pensions, an unemployment rate above 20 per cent and a further 5 per cent contraction of national output projected this year.

More hardship looms as the incoming government must legislate €11 billion of additional spending cuts by July under the terms of a second €174 billion bailout by the European Union and International Monetary Fund, or risk plunging Greece into a full-scale default within months.

The coalition government has already pushed through €3.3 billion of cuts despite defections by backbenchers from both parties. But Mr Papademos has been struggling in the final days of his administration to prevent coalition deputies from pushing through populist amendments aimed at attracting votes, even though they would undermine the government’s achievements.

George Kyrtsos, a political commentator, said: “The discipline of the past months has weakened and Mr Papademos is being sidelined as law-makers from both parties try to enhance their electoral appeal.”

Mr Venizelos has urged voters to back the further austerity measures at elections or risk the possibility of a forced exit from the euro zone. The former finance minister said in a newspaper interview that the country faced a stark choice: “People must realise the elections are not a big opinion poll but a time for making decisions. Our future is tied to [implementing] the new measures.”

With the electoral system heavily weighted in favour of the front-running party, New Democracy and Pasok could still scrape an overall majority in parliament with about 45 per cent of the vote.

“There is a lot of volatility in the polls and it’s likely that the mainstream parties will both win back more of their core voters during the course of the campaign,” a senior socialist party member said.

But even if a new cross-party coalition comes to power next month, its tenure may be short-lived. Mr Kyrtsos said: “The polls show that the next government will be in a weaker position than its predecessor. Whatever happens next, we are looking at instability.” – (Copyright The Financial Times Limited 2012)