After four days of bargains and scheming behind closed doors, the pillars of the Greek political system have produced a “national unity government” – a term which isn't a misnomer if one excludes from the “nation” the various left parties, currently polling the same as or above the leading conservatives, and a majority of Greek citizens.
This government will be quite appropriately led by a former ECB Vice President, Loukas Papademos, since it has been hand-picked to implement a policy conceived and imposed under the presumed threat of immediate economic annihilation by the ECB and its partners. Since the country’s fate is being decided by bankers, central or otherwise, it is at least honest for a central banker to assume direct leadership, circumventing the (elected) middlemen. The fact that it is the first Greek government after the fall of the military junta in 1974, to include a far-right, xenophobic party, LAOS, is also telling.
The local elites have grasped at the opportunity to reassert hegemony. The mass media, almost all owned by Greek oligarchs, have reacted with uniform praise for Papademos. Optimistic TV anchors express their hope that things will be better now that the “experts” are running the show. The economic, bureaucratic and banking elites are converging on the person of Mr. Papademos, after support for their previous favourite, George Papandreou, became untenable.
This lengthy farce is the consummation of a political tragicomedy that was set in motion by Papandreou’s “decision” to announce a referendum on the “rescue package” agreed upon by the EU/ECB/IMF troika after the Brussels emergency summit negotiations, on October 27.
This “rescue package for Greece”, as described in the Euro Summit’s Statement:
This on top of the previously decided sell-off of the larger part of Greek state-owned companies and utilities; a permanent tax-barrage that includes a harsh and regressive property tax; massive real wage reduction, especially if one includes delays in payment of wages and elimination of higher paid jobs that are replaced by part-time ones, if at all; official unemployment over 18% in August; a defunding of education and health services; elimination of labor protection laws; the virtual abolition of collective bargaining; and the pauperization of large swathes of what used to be a middle class, but have now entered the ranks of the unemployed or the precariat.
Having barely survived two years of this extreme austerity and the social disaster it has produced, people didn’t take to kindly to this new package brought triumphantly home by the Papandreou and his Finance Minister, Evangelos Venizelos. The first polls showed that over 50% of those asked believed that the new summit package would plunge Greece even deeper into recession while only 18% thought the opposite. More importantly, after the two day general strike on October 19/20, which saw possibly the greatest labour demonstration ever in Athens and record rallies in most major cities, came October 28, just one day after the PM returned from Brussels. The school and military parade that day commemorates Greece’s entry into World War II, and is usually a very “proper” and unpolitical event. This time all hell broke loose across Greece: protesters and participants alike subverted most of the parades through boos and symbolic acts of defiance, forcing in many cases the few participating officials to leave the podium, chased away by curses and jeers.
As enough of his own party’s MPs seemed to be at the verge of abandoning him and precipitating his government’s fall, Papandreou decided to gamble with a proposal he knew he could not implement: a referendum on the loan package he agreed to on October 26. The rest is history: announcement, global turmoil, panic, Merkel and Sarkozy forcing the Greek Prime Minister to put the referendum idea to rest. After that, as EU officials were threatening with expulsion from the Eurozone if a coalition government was not formed fast, Papandreou managed to coerce from the conservative opposition its consent for a “national unity” or “national salvation” government.
There are two things to note here:
1. Papandreou was widely seen outside of Greece as attempting a brave move for democracy and accountability, only to be foiled by Merkozy's reaction. This is evident in the way all sorts of well intentioned people from Jürgen Habermas to Dean Baker and from Ireland to the US wrote about Papandreou's gambit. In this version Papandreou is the principled democrat, forced to abandon his principles against his will by brute blackmail. This is not the picture that most Greeks have, and certainly not the Greek left, as Costas Douzinas’ and Yanis Varoufakis’ reactions show. It was obvious to many people from the moment this referendum was announced that it was a stratagem against Papndreou's Greek opponents, not a issue of principle, and that even if Papandreou somehow managed to convince the rest of the EU leaders who signed the treaty to accept a referendum, any opinion poll predicting victory for a 'No' vote would send depositors in Greece running to the banks and the markets in a manic frenzy. That this was aimed principally at the local political scene was admitted by Papandreou himself. Speaking to his Ministerial Council, he described how the move was intended to bring (Conservative leader) Antonis Samaras into the “troika consensus” and have him accept a power-sharing deal that would make him co-responsible for the new, harsher austerity planned.
2. Having said that, even if Papandreou's referendum was nothing but a ploy in an elaborate game aimed at internal enemies and audiences, the reaction it produced from European (and Greek) elites was telling, both regarding their understanding of the non-existent popular legitimacy of the austerity policies being imposed across Europe, and about their rejection of democratic political processes, at least in the European periphery. The sight of Merkel and Sarkozy dictating the terms under which they would allow a referendum in Greece, its topic and its date, before the Greek Prime Minister had a chance to make a statement, was widely perceived in Greece as colonial in attitude.
After all of this, Papandreou has managed to turn over power to a government composed mostly of PASOK cadres, “reinforced” by four ministers from the far-right nationalists, four ministers from the conservatives, and headed by a former central banker. This government (the far-right part being conveniently ignored) is gaining the applause of EU officials, German and French governments as well as the IMF. Whether it has been successfully “sold” to the Greek people remains to be seen.
The new government has now a month of serious upheaval ahead of it. General strikes of private sector unions are expected later this month although the date has not yet been set. The public sector unions will be striking on the 15th. Following that, the commemoration of the Polytechnic School uprising against the military junta in 1973, a reference point for the local indignant movement, and an event that is anyway traditionally accompanied by clashes between protestors and police. Then December 6 is the anniversary of the shooting of 15 year-old Alexis Grigoropoulos by the police, an event that sparked the Athens riots of December 2008. It is improbable that the commemoration events will pass peacefully.
At the same time the movements against toll road hikes, individual union strikes, and other protests and demonstrations will surely develop as the new government shows its true colors. It is going to be a hard couple of months ahead for the Papademos administration.
It has become obvious over the past couple of years of the harshest austerity imposed in Europe since the Second World War that the true opposition to IMF/ECB policies comes from the streets and popular protest. As the fabric of society crumbles in Greece it seems improbable that a population in such distress can be pacified by a change of government guard. The coming months until the elections (supposedly due in February, though the date isn't set yet) will be crucial. Should the left manage to unite in an anti-austerity front as effectively as the elites have united behind the new Greek PM, Greece, so the polls seem to indicate, could be the first country in Europe to elect a hard left government. But there is a long way to go and the Communist Party, the largest party of the left, insists that it isn’t interested in such a front. It remains to be seen whether it will keep to this line in the face of intensifying austerity.