Saturday, November 12, 2011

Greece’s dysfunctional politics: Tomorrow and tomorrow

 

How not to form a government

Nov 12th 2011 | ATHENS | from the print edition

IT TOOK several days of back-and-forth talks, missed deadlines and public and private outrage, but Greece finally has a new prime minister. On November 10th Lucas Papademos, a former vice-president of the European Central Bank, was named to replace George Papandreou, who had pledged to stand down four days earlier. The decision meant Greece had come full circle in less than a working week: on November 7th Mr Papademos had looked like a shoo-in for the job before negotiations went sour.

It may have taken a while to reach, but the choice at least looks sensible. Mr Papademos, an academic economist and a member of no political party, has the reputation to reassure Greece’s bail-out partners, and his financial expertise should prove useful when it comes to implementing the complexities of the looming 50% haircut private holders of Greece’s bonds must suffer, under a deal struck in Brussels on October 26th.

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The last casualty of this week’s wrangling was Philippos Petsalnikos, the speaker of parliament. A German-speaker skilled at keeping Greek lawmakers in order, he looked like a dead certainty to replace Mr Papandreou on the afternoon of November 9th. Mr Papandreou even delivered an emotional valedictory television address to the nation (although he did not name Mr Petsalnikos as his successor). Yet later that day Mr Papandreou (pictured, above, with President Karolos Papoulias) was forced to withdraw Mr Petsalnikos’s candidacy amid a threatened rebellion by backbenchers in his Panhellenic Socialist Movement (Pasok). They blamed Mr Petsalnikos for helping Mr Papandreou put together his ill-fated proposal for a referendum on Greece’s new €130 billion ($178 billion) bail-out package. That plan had been shot down by euro-zone leaders at the G20 summit in Cannes, triggering Mr Papandreou’s decision on November 6th to step down (see Charlemagne).

Mr Papademos’s “first” candidacy fell foul because he wanted to choose his own economic team. This proved unacceptable to Pasok, largely because it would probably not have included Evangelos Venizelos, Mr Papandreou’s finance minister, who is not popular among EU and IMF officials. Greece's conservative opposition party New Democracy was not keen on Mr Papademos either; he wanted an open-ended term rather than stick to an agreed February 19th deadline for elections.

Mr Venizelos threw his hat into the ring at the last moment, after running a whispering campaign against Mr Papademos. An ambitious constitutional lawyer, he is keen to succeed Mr Papandreou as Pasok leader. But he needs a position from which to build his campaign.

Mr Papademos kept a dignified distance from the chaotic politicking of the last week. But he reportedly added two more conditions. He wants support from New Democracy, which was reluctant to take up more than a few cabinet posts in the new government. And in line with a European Commission demand, he insists that both party leaders should sign a letter of commitment to the new bail-out terms.

Mr Papandreou is willing to sign up. But Antonis Samaras, New Democracy's leader, caused consternation in Brussels by apparently refusing to do so following objections from his party (though a later statement left open the possibility). Mr Samaras annoyed Angela Merkel, the German chancellor, and other European conservatives by opposing Greece’s first bail-out. He says he supports the second one, but EU officials are still unconvinced.

Over the next few weeks Mr Papademos will struggle with the country’s first coalition government in modern times. Left-wing parties rejected Mr Papandreou’s call for national unity. They plan to take their opposition to the streets.

from the print edition | Europe

Greece’s dysfunctional politics: Tomorrow and tomorrow | The Economist

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