Cradle of democracy is rocked by angry voters

By Kerin Hope

In the land that invented democracy, disillusionment with party politics is running high, for reasons that would seem familiar to many 5th century BC Athenians.

There is criticism of clientelism or “jobs for the boys”, allegations of corruption and a sense that ordinary citizens’ concerns have been brushed aside by the political elite.

As a consequence, Sunday’s European parliament elections may see an unusually low turn-out by Greek voters. Voters are expected to punish both the governing right-of-centre New Democracy party, led by Costas Karamanlis, the prime minister, and George Papandreou’s PanHellenic Socialist Movement, the main opposition party.

The Socialists have an edge going into the election, according to opinion polls, though many leftwing voters could shift to a more radical party.

The options include the still-Stalinist communists and the Left Coalition, a rallying point for the “€700 generation” of young graduates with an income of less than €700 a month.

Support is also growing for the EcoGreens, the most popular environmental party, who are forecast to beat the parliamentary threshold of 3 per cent of the vote and win their first ever seat.

But many voters fed up with Greece’s dynastic politics – a system that has resulted in a politician with the surname of “Karamanlis” or “Papandreou” heading one of the two mainstream parties for the past 50 years – are likely to show dissatisfaction by staying away from the poll.

The conservatives will lose a sizeable number of votes to Laos, a far-right party led by a former New Democracy deputy, and a few to Chryssi Avghi, a rightwing extremist group that has raised its profile by running for the European parliament.

Last month members of Chryssi Avghi attacked a derelict court building in central Athens where immigrants from Afghanistan and north Africa have been living for months in squalid conditions. Human rights activists criticised the police for failing to intervene.

Mr Karamanlis has not lived up to his pledge when he came to power in 2004 to end corruption and “re-invent the state” as a driver of social and economic reform.

The social unrest that erupted last December, causing damage of more than €300m to shops and other property during two weeks of rioting in Athens and other cities, still simmers close to the surface.

Two new local extremist groups have emerged in recent months, staging a series of bomb attacks against banks, government offices and police stations. No arrests have been made.

A wave of immigration from conflict-hit regions in the Middle East and Afghanistan threatens to overwhelm Greek authorities. Athens last month saw its first Muslim protests, after a police officer reportedly ripped an Iraqi immigrant’s copy of the Koran.

An estimated 250,000 migrants have arrived in the past two years, mostly crossing by small boat from Turkey to east Aegean islands that have few resources to cope. The majority move to Athens.

Having handed out work and residency permits to about 600,000 immigrants from Albania and other former communist states, Greece already has one of the highest ratios of migrants to local population in the European Union.

Few of the current wave of immigrants have been granted asylum or allowed to work. The Council of Europe’s senior human rights official last January criticised Greece for not doing enough for new arrivals. “The government does not have an immigration policy,” says Mr Papandreou.

With the economy growing at an average of 4 per cent yearly and plenty of unskilled jobs available for immigrants, it was relatively easy for the government to brush social issues aside.

But as recession looms, the official jobless rate has edged up from 7.6 per cent to 9.7 per cent of the workforce in the past six months.

Unemployment among women and new entrants to the workforce is in the high double-digits.

Jobs are especially scarce for young Greek high-fliers with degrees from abroad. “There used to be opportunities in Spain, France and Dubai if you couldn’t find a job with a local company, but those are much fewer this year,” says Ilias Papadakis, a UK-trained electronics specialist.

Greece has been partly sheltered from the impact of global downturn because its economy is based on services, not manufacturing. But that also means it may take longer to recover than its eurozone partners and face several years of weak growth.

Transfers from the EU’s structural funds that have transformed the country’s infrastructure over the past two decades will slow sharply after the present €20bn package ends in 2013.

Inflows of foreign direct investment are low compared with central Europe, in spite of Greek aspirations to become a base for international companies doing business in the Balkans.

Yet investor interest has picked up especially in the energy sector, says Dimitrios Pazaitis, chief executive of the national investment agency. “There are opportunities to be found in a downturn,” he says.

The government’s critics say reforms of labour markets, education and the state pension system have been half-hearted and that more radical steps are needed if Greece is to compete effectively in Europe once the downturn ends.

But the conservatives’ embattled position – halfway through their second term they have only a two-seat majority in parliament – puts constraints on policy-making.

Foreign policy has been put on the back burner as Mr Karamanlis focuses his attention on domestic politics.

Greek efforts to bring its western Balkan neighbours closer to Europe have faltered. Greece has failed to recognise Kosovo’s independence on the grounds it sets a precedent for a permanent division of Cyprus.

The dispute with Macedonia over its use of an ancient Greek name still festers. Greece’s veto of Macedonian membership of Nato has affected its relations with the US as well as producing angry reaction in Skopje.

Relations with Turkey are also cooler, over Ankara’s continued refusal to recognise Cyprus, although bilateral trade and investment continue to make gains.

While Mr Karamanlis’s leadership is not under threat, his party’s credibility is at a low ebb.

A series of financial scandals, from a fraudulent land swap involving property belonging to a monastery on Mount Athos to sales of structured bonds at inflated prices to state-controlled pension funds, have highlighted a disturbing lack of accountability in the political system.

A judicial investigation revealed that several deputy ministers were involved in the land swap, but the case is not expected to come to court because parliament failed to vote in favour of lifting their immunity.

When the government shut down parliament without warning for the European election campaign, a week earlier than expected, the Socialists said the move was made to halt further investigations of scandals.

Whatever the outcome of Sunday’s vote, several of Greece’s new European parliament members will be prepared for only a short stay in Strasbourg.

Both main parties are gearing up for a general election next spring, when parliament is due to elect a president. Talented euro-deputies are usually among the first to be offered cabinet posts.

A consensus would be needed to re-elect the incumbent, Carolos Papoulias, a Socialist former foreign minister, or another candidate, by the required three-fifths majority.

Otherwise a general election takes place, with the new parliament empowered to elect the head of state – a ceremonial post – on a simple majority.

Provided the Socialists have a convincing lead in opinion polls, and that there are signs of economic recovery later in 2010, Mr Papandreou will come under pressure from his party to bring the government down.

But having lost two elections already, Mr Papandreou, a former foreign minister, needs to be quite certain of victory – or he will be looking for a job outside Greek politics.