Greeks, Europeans, and anyone else who knew the score breathed a huge sigh of relief at the news that Loukas Papademos, the former deputy head of the European Central Bank, will be Greece’s new prime minister. His appointment, especially compared with some of the other names that were bandied about during the past few days as candidates for the post, is the best one could have hoped for if—at least if one believes that Greece belongs in the eurozone and that an exit from it, which became an ominously fashionable topic of discussion among Europe’s leaders the last few days, would be a disaster not only for Greece but for the whole euro project.
As I mentioned Monday, Papademos is a serious man, who has the background and the respect among European leaders that will allow him to guide Greece through the treacherous months ahead.
As the country moves forward—his term is expected to last about four to five months, though as he said yesterday, there is no fixed date for new elections—his government must, among other things, negotiate and pass the new loan agreement, arrive at a deal with (most of) its creditors for a 50 percent haircut in privately held Greek debt, bail out Greek banks and pension funds that will take a hit from said haircut, and pass the 2012 budget. Papademos must also prepare himself for some of the known unknowns that will surely pop up during his time in office, like a few days of widespread rioting here and there, or the large number of taxpayers refusing (or not being able) to pay the new property tax that has started being levied in people’s homes as part of the electricity bill.
Yesterday, unemployment was revealed to have reached 18.4 percent (43.5 percent among those aged 15 to 24). There will be no honeymoon for Papademos's government.
His ability to govern, in an interim coalition government including the socialist PASOK, which holds the majority in parliament; the center-right Nea Demokratia, which is the official opposition; and the smaller, right-wing LAOS Party, will depend significantly on how smoothly these parties co-operate in the next few months. But the parties’ actions in the last couple of weeks—these days of chaos, ludicrous plot twists, and an orgy of misinformation—inspires little confidence.
From the moment when George Papandreou, on October 31, declared in parliament that he would put the country’s amended second bailout to a referendum—provoking turbulence in world markets, horror in Europe’s capitals, and a political crisis in Athens—Greek politicians did their utmost to embarrass themselves. As one prominent Greek commentator put it, they—especially those belonging to the two major parties—seemed determined to commit collective political suicide, and to drag the whole country down with them.
What to remember? Finance Minister Evangelos Venizelos coming out in full support of Papandreou in parliament on the referendum before completely reversing himself three days later, at five in the morning, after he and Papandreou were summoned to Cannes and told off by Angela Merkel and Nicola Sarkozy? Papandreou holding and winning a vote of confidence after midnight last Friday-Saturday for a government that was about to resign? Samaras, leader of Nea Demokratia, appearing in parliament after the debate and the vote of confidence, which he did not allow his party’s parliamentarians to participate in? He looked beside himself and said that “the masks had fallen” and that he would refuse to support the new government, only for him, too, to reverse himself the next day. Or the drama of the past week, with repeated visits to the Presidential Palace by party leaders with anonymous sources leaking every name under the sun as a potential prime minister?
The low point was reached on Wednesday night. Rumors had spread that Papademos’s candidacy, which had been confirmed by enough sources on Tuesday to lead some major news outlets to declare him the new prime minister, was in trouble. By Wednesday morning, he was considered done for and, after more frenzied name-dropping, it seemed that Papandreou and Samaras had settled on Philippos Petsalnikos, speaker of parliament, as head of the new interim government. As the two leaders went back to the Presidential Palace to meet with the president and the leader of LAOS George Karatzaferis to seal the deal, though, a revolt against Petsalnikos exploded among PASOK MPs. Many of them considered him a person without international respectability and too close to the outgoing prime minister—plus, he was one of the two confidantes of Papandreou who urged him to call his ill-fated referendum. Soon, after a theatrical exit from the Presidential Palace by Karatzaferis, which included a cri de Coeur in favor of Papademos, the meeting was postponed, and Petsalnikos’s candidacy was shoved aside.
The reasons behind this elaborate farce are obvious enough. The parties will soon be in election mode, so their willingness to co-operate will constantly be tested by the natural instinct to compete. In the entire post-junta period (after 1974), Greece has only had about a year of coalition government (1989-1990), widely perceived as a failure. Not having to collaborate to govern, thanks to electoral laws strongly biased in favor of the winning party, Greek politicians have mastered the politics of polarization and are still hopelessly inept at cooperation.
Add to that the fact that they are afraid. The old political system, with its clients, its media supporters and its certainties, is collapsing under the weight of events. For years, the truly able have stayed away from politics. Now, someone with unquestioned credentials has, despite the major parties’ best efforts, been given the reins of government. God forbid he should do well. Then the Greeks might finally realize that they don’t need to vote for PASOK and Nea Demokratia until the end of eternity, and new, socially liberal, anti-statist political forces can begin to come to the fore. This would be the old parties’ ultimate nightmare.