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18/05/2012 | Europe - Opinion: The Greeks say no

Editorial

Angry Greek voters punished both their main political parties in the general election on May 6, but all subsequent attempts to form a government have failed, and another election is to be held on June 17.

 

Under the reinforced proportional electoral system, the Panhellenic Socialist Movement, which had been part of Lucas Papademos' interim national unity government, crashed by about 30 percentage points, and its 13 per cent vote-share sent it down to third place with 41 seats in the country's 300-seat unicameral parliament. Its former governing partner, the conservative New Democracy, benefiting from being in opposition during the economic crisis and downplaying its earlier vote for budget cuts, got 19 per cent, but won a 50-seat bonus for coming first. It had 108 overall, but could not assemble a government; neither could the election's surprise package, Alexis Tsipras' anti-austerity left grouping Syriza, which won 17 per cent and 52 seats, on a 65 per cent overall turnout. Looming over the situation too is the fact that the far-right Golden Dawn party won 21 seats with a vote-share of 7 per cent. President Karolos Papoulias has appointed a senior judge, Panagiotis Pikrammenos, to head another interim government until the next election.

Greece is now in chaos. The European Union, the European Central Bank, and the International Monetary Fund have provided a €130-billion loan to follow the 110 billion lent in 2010, but the money has been used mainly to compensate private investors; the 2011 sale of public assets realised only a third of the expected €5 billion. Other loan conditions, like higher taxes, deep cuts in pensions, pay, and public sector jobs have hit ordinary Greeks hard. Unemployment, at 21 per cent, is twice the eurozone average, and in the 15-24 age-group it has risen from 17 to 51 per cent in three years. The resulting slump in aggregate demand has caused business closures and has worsened the slide. While almost 70 per cent of the May 6 vote was for parties opposed to the bailout terms, the majority of Greeks wish to stay in the eurozone. Therefore, Mr. Tsipras's level of support — currently rising through 27 per cent — makes it highly significant that he intends to renegotiate the bailout terms. Ominously, vulture funds which hold Greek debt are demanding interest payments, but the key problem is the intransigence of the EU and the German Chancellor, Angela Merkel. The sooner the EU moderates its position, the better the prospects for a solution which both respects Greek public opinion and allows the country to remain in the eurozone.

The Hindu (India)

 


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