Papandreou’s task

As Greeks are fond of saying, their country is not like others. Just as the rest of the world is pulling out of a recession, Greece’s service-oriented economy is entering one. While recent European elections have tended to favour the centre-right, Greek voters have awarded a stunning victory to the socialists of Pasok and their leader George Papandreou. After five years at the helm, Costas Karamanlis is out.

This was a very Greek election. It is not just that Mr Karamanlis and Mr Papandreou are scions of Greece’s two leading political dynasties (occupying the presidency or premiership for most of the republic’s short history). In an introspective contest, Europe was hardly mentioned. Without visible enthusiasm, voters preferred the vague promises of the Papandreou brand to the conservative Mr Karamanlis’ promises of austerity – and repudiated New Democracy’s failure to clamp down on corruption. Pasok has won a holding mandate from a fickle electorate. What Greece needs, however, is reform.

Even as Greece enters recession – and before Mr Papandreou doles out a promised €2.5bn fiscal stimulus – the budget deficit is far too high. A crackdown on tax evasion is a fine aspiration. But the new government’s first budget should go much further. Mr Papandreou should freeze most new recruitment into the public sector, get a handle on corruption (particularly in healthcare and defence), tighten control of departmental budgets, enhance cross-checking for tax returns and depoliticise national accounting. But whereas a previous socialist premier credited with squeezing Greece into the euro, Costas Simitis, had a reliable economic team, it is not even clear who Mr Papandreou’s finance minister will be.

There are more grounds for optimism in foreign affairs. As foreign minister in 1999, Mr Papandreou used the shared tragedy of earthquakes in Istanbul and Athens to improve relations with Turkey. He may now try to put pressure on the Greek Cypriot government to accept reunification on terms more acceptable to the Turkish community (though leverage over Nicosia has diminished sharply since the island was allowed to join the EU). Greece’s obduracy on Macedonia’s official name may now be tempered, holding out the possibility of an end to a sterile dispute that has cooled relations with Washington and Brussels.

To win election for Pasok, Mr Papandreou has been studiously vague. To govern for Greece he needs to be altogether more precise and determined.