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George Papandreou’s new government has passed its first pressing test. But disaster may still loom
Jun 23rd 2011 | ATHENS | IN THE middle of Syntagma Square in central Athens, flanked on one side by parliament and on another by luxury hotels, would-be revolutionaries jostle for space with phlegmatic African street-traders selling handbags. On June 22nd one group of youngsters conducted a spontaneous “economics lesson” in which terms such as “credit event” and “haircut” were explained and deconstructed. Petrograd 1917, or even Paris 1968, it was not. Explore our interactive guide to Europe's troubled economies Nonetheless, the stakes are very high. It is entirely possible that in the weeks to come the situation in Athens could go from being strained, angry and confused to plain catastrophic: negotiations between Greece’s economic rescuers and its political leaders may fail, and the state may run out of money and/or crash out of the euro, triggering a financial crisis that would reverberate round the world. Even if that were avoided, Greece’s fundamental problems would hardly improve. For the country is not just bust, it is deeply uncompetitive, and dealing with that will require years of painful reforms. Related itemsJun 23rd 2011Related topicsBut those gritty realities seem to have escaped most of the actors in the drama which is unfolding inside and outside the Greek parliament. In time-honoured fashion, the country’s political parties are jockeying for advantage, with little regard for the disaster that they might help to bring about. Meanwhile, the demonstrators outside are chanting slogans implying that the happy days of living well on borrowed money can come back if they only shout loud enough, and if the “traitors” and “thieves” who spoiled the party are given their just deserts. In the short term, the Socialist government has gained some breathing space in its struggle to endure the twin pressures of popular discontent (over the austerity already imposed) and international demands for reform. The ruling party’s fractious legislators, galvanised by fears they might lose power, rallied behind George Papandreou, the prime minister, in the early hours of June 22nd to give his new cabinet a vote of confidence. All 155 Socialists turned out for the roll-call vote, which went strictly along party lines. Minutes before the vote the opposition walked out because of a noisy, petty argument over whether “democracy” had returned to Greece in 1974, when the military dictatorship fell, or in 1981 when the first left-of-centre administration was elected. Mr Papandreou managed to coax his opponents back by pointing out what an appalling impression such squabbles make on the rest of the world at such a grave hour in the country’s history. New Democracy, the centre-right opposition party, is withholding support for an internationally agreed austerity and privatisation plan on the ground that it can and should be renegotiated, with more emphasis on tax cuts. Few people outside Greece see much scope for that. But some of the government’s critics, especially on the left, gleefully observed that Greece’s international partners seemed to soften their stance slightly around June 15th, when street protests came to a head and the country looked ungovernable. This week’s small successes for the government left the anti-austerity protesters outside parliament unimpressed. They said they were issuing their own vote of no confidence in the country’s entire political class. Admittedly, their four-week-old tent village (modelled on the Spanish version) looks scruffier by the day. But the protesters say they will stick it out at least until the next critical vote, on a five-year austerity package intended to prevent a default and put the country on the road to recovery. They are planning a “day of action” as the vote takes place. Regardless of the atmosphere on the streets, there are big question-marks over Greece’s future. The current The current |
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