Papandreou shows first signs of weakness by playing for time

CORFU LETTER: Greece’s prime minister faces serious internal opposition to the forced sale of state assets

CORFU LETTER:Greece's prime minister faces serious internal opposition to the forced sale of state assets

SOME MONTHS ago the German newspaper Bild suggested that in return for the EU bailout, Greece should sell off the Acropolis and some islands, including Corfu (where I live).

At the time, this was regarded as so much tabloid guff, but more recently the EU-IMF-ECB troika has been pushing the sale of Greek assets so far that it has become less of a joke and more of a serious bargaining point.

Privatisation of state companies and sale of assets, including land, are inevitable if Greece is to raise the €50 billion which the troika insists is necessary to reduce national debt by 2015. The government was due to publish its schedule of sales on April 15th but has deferred any detailed announcement until after Easter.

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There are two reasons for this: the first is what one might call “Greece v the troika”, in which the government continues to resist the harsher measures demanded by the inspectors, who have taken on the appearance of the three horsemen of the apocalypse.

The second is much more serious: prime minister George Papandreou is facing entrenched opposition to some of the intended measures, not only within Pasok, the party over which he presides, but also within the cabinet.

Internal Pasok resistance is ostensibly due to anxiety that assets might be sold off at a time when they are undervalued.

This however masks a deeper resentment – that the state companies and other assets which might be on the market represent decades of state-building which are now to become international property, with further loss of the sovereignty and self-respect that were re-established in the wake of the military junta.

Despite widespread expectation that Greece will seek to restructure its debt, Papandreou has insisted his government is “restructuring the country”.

The obfuscation over the sale of assets has allowed the prime minister an opportunity to reiterate his personal mission.

Delaying the announcement however is the first major sign of weakness Papandreou has shown since becoming prime minister 18 months ago. His determination to effect transformation of public administration and business methods in Greece has so far been demonstrated by a disregard for public opinion and political criticism that one could hardly call ruthless but which has been remarkably adroit. Now, though, by so obviously playing for time, he is demonstrating a weakness that could jeopardise his position.

The April 15th announcement was expected to list the assets for sale. The delay has given Papandreou a breathing space in which to cajole his internal dissidents, without whose votes the government will be defeated in May, precipitating a general election. Speculation has identified several state companies ripe for sale: the loss-making rail network, the postal service, the state-owned casinos and Opap, the profitable betting agency.

While at the macro level the fate of Greece is being debated internationally, in people’s lives the facts of day-to-day survival are becoming increasingly evident.

As the tourist season (on which Greece depends so heavily for revenue) gets under way, it’s difficult to know whether to be heartened by the preparations of shopkeepers and taverna owners as premises are refurbished after the winter closure or be depressed by the sight of so many that will not be re-opening this year.

As one restaurateur said to me, “I lose less money by staying shut”. With unemployment at 15 per cent, the second highest in the EU (after Spain), the minister for competitiveness has said that the jobless rate “may become a bomb in the foundations of society”.

While optimism demands that economic ills can be overcome, the long-term social effects of the recession become “continually more toxic”, the minister said.

If Papandreou is forced to call an election, it’s likely Pasok would be returned to power, since the increasing fragmentation of political parties on both left and right reduces the chances of a strong or united opposition.

A new leftist party, Dimar (Democratic Renewal), formed in April, has been greeted by Papandreou and Dora Bakoyannis, leader of yet another splinter group. Why? Because it stands little chance of survival.

Meanwhile, it is not only the economic and social situation that gives cause for concern: Turkey recently reaffirmed its intention to build a nuclear plant near Mersin, close to its border with Syria and 100km north of Cyprus.

Mersin, like much of the eastern Mediterranean, is in one of the world’s most seismically fragile environments. It lies 25km from the Ecemis seismic fault line and 125km from the east Anatolian fault line. In 1998, a 6.2 magnitude quake with an epicentre 70km from Turkey’s proposed nuclear site left 145 people dead.

Today we know much more about tsunamis and, after Fukushima, about radiation and meltdown.

Despite remonstrations by Greek president Karolos Papoulias, Turkey seems determined to proceed. Turkish prime minister Recep Erdogan says: “There is no investment without risk, otherwise you shouldn’t use a gas cylinder in your house.” Which sounds very much like: “You don’t make an omelette without breaking eggs”.

It could be a very strange summer.