Greek Socialists Count on Dissatisfied Voters, but Fail to Inspire Their Confidence

By RACHEL DONADIO and ANTHEE CARASSAVA

ATHENS — After five years of a center-right government plagued by corruption scandals, violent protests and a moribund economy, Greece will hold national elections here on Sunday with the Socialist party poised to make a comeback. But for all their enthusiasm, even the party’s supporters question whether the Socialists have what it takes to steer Greece out of trouble.

Prime Minister Kostas Karamanlis came to power in 2004, pledging to improve the economy and restore trust in government after a generation of Socialist rule. Yet last month, two years into his second term and holding a one-vote margin in Parliament, he called early elections to forestall labor unrest and avoid a lame-duck period before elections called for March by the emboldened Socialist party, Pasok.

In the midst of the worst financial crisis in decades, with a soaring public debt and rising unemployment, many Greeks say they see no major substantive difference between Mr. Karamanlis’s center-right New Democracy Party and the Socialists.

As he stood in his souvenir shop near the new Acropolis Museum, Prokopis Hadjiioannides, 53, said he would vote for the Socialists, as he always had. But he said he had no illusions about the party. “I’m not saying they’re saints,” he said. “But they started stealing and being corrupt after 20 years in power. These guys” — the New Democracy incumbents — “were corrupt from the first day.”

In his campaign, the Socialist leader, George Papandreou, an American-educated sociologist and former Greek foreign minister, has pledged to turn around the economy and restore trust in a government most Greeks see as corrupt. He has also vowed to increase meritocracy in a culture of Ottoman-style patronage where party affiliation has often trumped skill in fierce competition for public-sector jobs.

But that is a practice his own Socialist party has long been accused of nurturing. So why, many Greeks want to know, should they believe that the Socialists are different this time around, or that they can instigate change?

“You are asking me what people in the street ask me every day,” said Anna Diamantopoulou, a senior Socialist party member and a former European commissioner. The answer, she said, is that Greeks are fed up.

“There is always a moment in history and in political life when people say, ‘That’s enough,’ ” she said. “And I believe that the country is in a crisis — an economic crisis, a political crisis, a social crisis. So that’s enough for many people.”

Offsetting the need for reform is a deep Mediterranean resignation; many Greeks find the status quo, however problematic, more convenient than a new order, and aspire to find what is known as “volema,” the term for a comfortable setup within the prevailing system.

Adding to the skepticism here is a widespread disdain for politicians. Although Mr. Karamanlis came to power promising to clean up government, his efforts to persuade Greeks to pay their taxes and register their land were less effective after senior members of his government were found to have done neither.

One of his closest aides was accused of orchestrating a controversial land swap in which the state lost an estimated $150 million after exchanging prime Athens real estate for much less valuable property. The aide denied wrongdoing and stepped down.

Mr. Karamanlis was accused of covering for other high government officials who were accused of having profited from the deal, and who later stepped down. He denied that anyone in his government had done anything illegal.

Greeks also found Mr. Karamanlis’s government ineffective and puzzlingly passive in response to several crises, including a series of devastating forest fires in recent years, and the shooting by the police of a 15-year-old last December, which set off violent student protests that raged uncontrolled for weeks and caused millions of dollars of damage. (In a country with frequent demonstrations, many Greeks viewed the protests as political theater or a rite of youth, not as a social uprising.) Fresh protests are expected on the first anniversary of the shooting this December, and the dire economic situation may well precipitate other demonstrations.

The economy is the central issue in Sunday’s elections. After 15 years of sustained growth, buoyed by Greece’s entry into the euro zone, the economy has stalled. Unemployment is at 9 percent and is expected to rise to 10 percent, if not higher, in 2010.

Analysts say the recession is exacerbated by deep structural problems. The underground economy is estimated at 30 percent of gross domestic product. Experts say that Greece loses about $17.5 billion annually in unpaid income taxes and $13 billion in unpaid payroll taxes to cover social costs. And with two pensioners for every worker, employment levels cannot sustain social spending.

Greece also has a longstanding tradition of hiring more state workers in order to stave off social unrest, a practice that has bloated the public sector — one in four Greek workers is employed by the state — and increased public debt, which is estimated to reach 108 percent of gross domestic product.

Both New Democracy and Pasok say they will try to convince Brussels to give Greece more time to bring its deficit below the ceiling of 3 percent of gross domestic product set by the European Commission.

If the government does not take stimulus measures and banks do not extend credit, “come January, the economy will be strangled,” said Savas Robolis, a labor economist and the scientific director at INE/GSEE, a prominent labor research institute.

“If that happens,” he said, “it will dampen all the new energy and hope built up for Pasok.”