Europe, having narrowly avoided crisis with the departure of Silvio Berlusconi, appears to have been plunged into it again, when Greece — or shift-F1 on the keyboard as I like to call that sentence —  again backtracked on its commitment to usher through the full package of October 26 austerity measures.

With new Prime Minister Lucas Papademos addressing Parliament last night — a Parliament of which he is not a member — and inaugurating a two-day debate leading to a vote of confidence on Wednesday, the momentary consensus that made the new government possible has already been put on hold.

New Democracy leader Antonis Samaras, having accepted the terms of the deal, is now making objections both to the full implementation of the austerity package, and also to a further demand by commissioner Olli Rehn, that a commitment to the deal be signed by not merely the PM and President, but also major party leaders and the head of the Greek state bank.

The letter is clearly of no legal standing, and Samaras insists that it’s a deeply humiliating bit of political theatre. It is, but like the proverbial million dollar proposition, objections on grounds of dignity seem a bit beside the point. We’ve already established what kind of girl Greece is; now we’re just haggling about the price.

Perhaps the markets could have lived with that piece of symbolic resistance, but Samaras’s open rejection of a combination of spending cuts and tax rises — and particularly the latter — has been sufficient to spook the European markets, and restart chatter as to whether the €8 billion tranche required in December to stave off default, will go through.

It almost certainly will, but Samaras’s brinkmanship, not to say opportunism, is breath-taking. Ahead of the February elections, he is now desperate to get himself out from under George Papandreou’s referendum, a move designed to forestall mass protest on a epic scale, and to make New Democracy own the crisis in tandem with PASOK.

You can’t blame either of them for that. As the three-party government — which Samaras, bizarrely, suggests New Democracy is not a part of — finalises a more detailed program, the news has come that unemployment has officially hit 18.75% — and is almost certainly closer to 25%.

Unemployment benefits — a maximum of €115 a week — run out after a year, and usually before, and the country is now seeing a slow accumulation of social fraying following on from economic collapse.

Athens, a scruffy but lively city, has been, for the past two years, portrayed as Mogadishu with spanakopita in a half a hundred profiles. Now, the prophecy is starting to come true. Even at the centre, building proches and colonnades are filling with homeless, and at night, the police presence is massive.

Crime is slowly but remorselessly on the rise. And while it is always dangerous to generalise on such matters, one could also say that the mood on the street has changed decisively. There is a dourness here, in the shops and streets, beyond the usual east European style of hospitality.

The mood spells danger for both major parties. Should they go to the election with no great change in their image, they will both lose out, but New Democracy will lose out more. PASOK will get some credit for tackling the crisis — from those who are still willing to vote for either major party, or at all.

Samaras is also facing opposition from within New Democracy — with one veteran MP arguing that the party is being infiltrated by far-Right figures betraying the party’s original vision, under Samaras’s watch — just as Papandreou is also facing a threat to his party leadership.

The result is that Greece is repeating the farcical process which attended the last days of Papandreou – the country is heading for a vote of confidence which will be won, but with no actual confidence being expressed in the lead-up to it.

The vote is timed for the evening of November 16, on the eve of Polytechnic Day, which will have its traditional large Left rally to commemorate the fight against the junta. The march usually ends at the door of the US embassy, to make clear where the real power lay.

Always rambunctious, this year it promises to be something more — as the old law of university sanctuary — by which the police could not go on campus grounds — has been removed. Frequently a running battle, this time it promises to be more of a pitched one.

By that time, Papademos won’t even be in the country. He’ll be in Brussels, a location presumably based on the idea that there is no point even pretending that he is the choice of the Greek people. Removing himself to the capital of Europe removes one component of any symbolic challenge, such as another storming of Parliament.

To say that this is far from the north European idea of smooth technocratic government is an understatement. But it is simply a reflection of the key fact underlying the whole process — that there is something weird about the whole set-up, a government that has the people’s consent, gauged only by opinion polls, gaining confidence by a vote from parties that have none, to implement a deal the people would reject if they could. And the health of the world economy still hinges on it. New democracy you could call it … or shift F2

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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