18 Jun 2012

Panic averted, but chronic Greek pain continues

Vassili, a 21-year-old fish market trader wants to tell you one thing: “Young Greeks have no dreams any more”. Even if he could sell it in these torrid economic conditions, he does not want to sell fish. He is an economics graduate from a top university in Greece, and wants to be a journalist like me.

An Albanian fish seller tells me, having lived in Athens for 20 years, he’s going back to Tirana in September where the economy is booming and he can earn more.

Another young person does not flinch as he calmly explains to me why he voted for neo-Nazis “who occasionally do bad things” but at least they are “proud Greeks”.

Three stories from the day after a dramatic election. There are many loose ends though: here are five.

1. Merkel‘s chance to steady Greece. Despite the election result, Greek politics has no chance of passing €11bn of further austerity measures by the middle of July. Pro-bailout parties (ND and Pasok) received a minority of the vote. An anti-bailout party is likely to join the government. What concessions can the EU Troika grant to the Greeks, on timing, interest rates, and measures? Or will Germany and the northern European “donor” nations finally reveal its true intentions for Greece and the euro?

2. Expect a new Greek government on Wednesday. Though not definitely. Right now Pasok is insisting that it will only join a “grand coalition” including the radical left Syriza is acceptable. ND believes this just talk. Pasok might not take any ministerial positions, which bodes ill for the sustainability of the coalition. Whatever concessions are eked out of Brussels and Berlin, further cuts to healthcare, and up to 150,000 public sector job losses will reap huge a social reaction, and general strikes within weeks.

3. Drachmail works. Fear of savings destruction, through de-euroisation, is an overwhelming force in an election vote. The election reflected a marked social and generational shift. Older voters, with savings, fell for the centre right party. The young, without savings and jobs, for Syriza. The former appeared to be a reaction to the latter, and this was precisely predicted to me by a top Syriza figure on Friday. An ND adviser also told me on Saturday: “There’ll be a bank run on Sunday night if Syriza win”. That message will have been repeated across Greece in the run up to yesterday. Can a society survive, fiscally, when the generations are split like this?

4. There is no great love for New Democracy. Its celebration rally was attended by about 300 supporters. Voter after voter told us they had voted for ND holding their noses at the party’s role in Greek politics over the past decades. Mr Samaras is the former College roommate of former prime minister George Papandreou.

5. A strong result for Syriza, in proper context. Remember this is a barely formed political party, essentially a ragtag band of environmentalists, feminists, ex-communists, and student politicians, that have grown from 4.6 per cent of the Greek vote to 26.8 per cent.

Perhaps more astonishingly, despite actively threatening to use “Drachmail”, or at the very least repeatedly suggesting that that there might be a price that is not worth paying for euro membership, its vote share increased by ten percentage points in a month. Some insiders privately admit that Syriza were nowhere near being ready for government. As the official opposition Mr Tsipras has a few months to sort this out. Mr Tsipras will surely lead Greece at some point.

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