Athens: The waitress in the coffee bar gives me a smile now, on this fifth day of election coverage fuelled by – she knows the order - frappe, orange juice and a croissant. “Where are you from?” she asks. When I tell her England she says: “I want to work in your country.” “Well there is no shortage of coffee bars there,” I say. The smile leaves her face: “I’m a qualified midwife.”
Like nine million Greeks she’s casting her vote in a country that has dashed her expectations. The health system here is falling apart under the strain of spending cuts. The borders are porous. More than one in five adults is out of work.
The longer you stay here – even in the nether-world of a business hotel – the more you can see what’s wrong. It’s not even primarily the economy.
What the Euro did was to solidify, and make successful for a time, a totally archaic system of politics, business and social life. Massive bureaucratic obstacles to everything meant people had to rely on political patronage: to get a business permit; to get their son a better posting during national service; to get planning permission for one of the endlessly unfinished seaside villas that dot the coastline. (This brilliant article in Kathimerini says more than I can)
This, in turn, reinforced a two-party system dominated by clans, family loyalties, village networks and debts of obligation going back to the war. Euro entry pumped this system, inimical to modern globalised business practice, full of money.
With prosperity, Greek workers fought for and won better wages, looser conditions, so that labour costs in Greece rise roughly on a 45 degree angle for a decade. Structural funds poured in to build motorways, trams and railway systems.
The only problem was that Greece had dissembled its way into the Euro. As its fiscal situation worsened, even in the boom years, oversights by Eurostat and miscalculations by its own finance ministry covered up the scale of the fiscal black hole.
The Greek crisis, which began in January 2010, not long after Papandreou’s Pasok returned to power, was at least - we thought – a catalyst for change in the Eurozone. North Europe would seize control of southern Europe, impose structural reform, austerity and – in return – move rapidly to a fiscal union.
That was the challenge and the opportunity posed by the Greek crisis. But it has been missed, catastrophically, by the politicians who run Europe. In this sense Greek politicians – from Marxists to neocons – are right when they say: this is not a Greek crisis but a crisis of the Euro.
If I look back through numerous frantic nights at the satellite feed; gas-smeared afternoons of rioting in Syntagma; sullen mornings in the student district of Exarcheia, and watch people queue for the polls today - three recurrent problems are obvious, whatever the outcome of the vote.
First, the indecisiveness of the old, Greek political class. Pasok signed up to a first bailout package whose austerity measures would collapse the domestic economy. Antonis Samaras’ New Democracy – lest we forget – opposed that bailout and voted against it in parliament, expelling the modernising technocrats who said rapid austerity was the only hope.
Then, when it became clear a second, much deeper bailout was needed, along with a huge debt write off that would put Greece under the control of the IMF and Brussels, the political will, even the machinery, of the old party system collapsed. So that now, even ND, the last mainstream party still standing, is having to mobilise people in new ways.
Second, the utter failure of the Merkel-Sarkozy axis to lead Europe towards the measures that would stabilise the continent’s banking system, stem the crisis and plot a route towards the fiscal union that would have to underpin any long-term bailout for the south.
At least Merkel, hemmed in by a culturally parsimonious electorate and rigid constitutional court, had a rationale for being the neinsager in this crisis. It is hard, with hindsight, to work out what President Sarkozy thought he was doing. The Merkozy era is in any case over, and it’s a new balance of power in Europe that will have to cope with what emerges tonight.
Third, the prevalent cultural dissatisfaction with the Euro arrangement among its electorates. Modern politics has become very adept at filtering out what people on the streets actually want: that’s as true in Germany as it is in Greece. But it can’t force people to like the Euro.
So 70% of Greeks still want to be in the single currency, but not a single political party standing in today’s election thinks the Memorandum signed this year, whose aim was to stabilise the public finances to enable Greece to meet the Euro rules, can work, or should be honoured. Meanwhile the majority of Germans want to stay in the Euro; but only a minority are prepared to see the huge fiscal transfer – of their money to the south – take place that is the precondition for the currency’s longterm survival.
Now, threatened with the rise of Syriza, the Euro leaders are putting in place the beginnings of a plan to resolve the crisis. Banking union, fiscal union, political union, Eurobonds, “growth funds”, Marshall Plans and like ideas are being thrown around from the corridors of the Elysee to the fragrant lawns that host the Bilderberg Group.
There are two possible outcomes after tonight’s exit polls.
If Syriza comes first its MPs will be a beleaguered minority in parliament. They will need the more moderate Eurocommunists of the Democratic Left and further splits from the Pasok party in order to form a governing coalition. In the process, they would be likely to retain their essential fiscal programme – a moratorium on interest payments to creditors; restructuring the banks; a rise in the tax take implemented through a land and wealth register, combined with capital controls.
But they would have to drop some of their more radical economic proposals – and they have said in advance they have no intention of challenging the structure of the Greek state and para-state. One of their spokespeople was shocked when I suggested they risked creating a Chilean-style clash with the state. They have no intention of doing so. Nevertheless I know for a fact some Syriza activists fear getting dragged into the low-level conflict between the fascists, migrants and anarchists that is simmering in the city slums.
Whatever, if Syriza wins and manages to form a coalition the ball would be firmly in the court of the ECB, and the Germans.
But Germany is for the first time looking confused. I’m told there is a struggle within the Merkel administration between the CDU, which is prepared to stick to its commitment to do everything to keep Greece in the Euro; and elements of the CSU, together with the minority coalition partner the FDP, which is pushing the “Greece out soon” line.
These factions in Berlin have been briefing furiously this week, with the Greece-out lobby winning the battle of spin on points. Hence Hollande’s warning that “some countries” would have Greece leave; hence George Osborne’s musing that maybe Greece needs to leave in order to convince Germany to go for fiscal union.
Syriza, however, is an insistently pro-European party. They are left globalists and denounced as such by the hardline Stalinists and Trotskyists at their periphery. It will not, and needs not, provoke an exit crisis.
An exit crisis will only happen if the German government, the IMF and the ECB combined decide to make it happen.
In the second, more likely scenario, New Democracy comes first, gets the 50 extra MPs, but still needs Pasok and the Democratic Left to form a coalition. ND leader Dora Bakoyannis told me on Friday the present austerity plan is doomed, is killing Greece and will not work. If they can negotiate concessions quickly from Brussels, Frankfurt and Berlin, an ND-led coalition could stabilise the situation.
But it all depends on the size of the concession. It has to include time – extending the deadlines for deficit reduction; and major changes to the MOU, allowing ND to try its tax-cutting programme. And as Mrs Bakoyannis was clear with me yesterday: it would need a massive privatisation programme, taking on and defeating the labour unions and imposing order on the recurrent chaos in central Athens. Whether a Pasok/Dem Left element could survive that experience for long is a moot point.
But the real problem facing a ND/Pasok/Dem Left coalition would again be Germany. If the Germans, as the price of banking union, decide to cut Greece adrift then no amount of tear gas fired into Syntagma by the riot police is going to persuade them Greece is doing enough.
That’s why many political commentators here, and much of the wisdom in taxis and coffee bars, says we get an ND-led coalition tonight, which collapses six months later, and is replaced by a strengthened Syriza, which leads to the final showdown.
This gets you through the summer, allows Brussels to stabilise the Spanish banking system and gives the Germans time to have the debate they probably should have had a little sooner about who’s in and who’s out of a German-financed fiscal union. Whether forced out or kept in the Eurozone, an ND-led Greece would still need the kind of Marshall Plan called for by economists such as Standard Chartered’s Gerard Lyons.
Any incoming government has one positive thing to build on: because of the savage austerity implemented so far, the public finances are close to “primary balance”. This is the platform from which Syriza could suspend interest rate payments, diverting the money straight to an expansion of public spending on benefits and public sector wages. Likewise it creates a cushion for ND, if as expected their hoped-for multi-billion privatisation receipts simply fail to materialise.
There is one final factor dictating the outcome of tonight’s vote, and it was clear at the final rallies of the two leading parties. New Democracy – for all that clientism is collapsing – remains a party with a machine. It is an alliance of demographic groups: the chic, the rich yes, but also struggling taxi driver, the shopkeeper, the ordinary Joe.
Syriza – which is picking up youth votes across Greece – remains an expanded left wing activist group. Though it has support among youth, at its rally on Thursday those who turned up earliest and stayed longest were not only wearing Che Guevara t-shirts but were old enough to remember Che being around.
There is almost no Syriza machine: it is a phenomenon. A political bubble, which is expanding right now but could easily burst.
This absence of machine, for Syriza, has so far proved its main advantage. Young technocratic people of Mr Tsipras generation could not make their mark inside New Democracy or Pasok. They were always waiting to step into dead men’s loafers. Always having to attend political events that bore horrible resemblance to the one Michael Corleone throws at Lake Tahoe in Godfather II.
Many modernisers and technocrats in the old parties feel like cultural outsiders even now. They will complain – off the record but loud – that the older generation of leaders is useless.
So for now Syriza is the only big party that projects the image of a break with the past. Actually there is also Recreate Greece, a party of young professionals formed in March this year, which I heard spontaneously mentioned a lot by young people in the bars of the Plaka last night.
But Syriza’s modern image, and clear rejection of austerity, is what has propelled it to the status of serious challenger – but wider popular fears of a break with the past will be the cause if it fails to win tonight.
The remnants of the old Greek system may form a coalition. But until mainstream politics becomes hospitable to people who understand that the main aim of politics is not to equip yourself and your family with Porsches, they will find it hard to govern Greece.
The only thing certain is that, until the Germans and their north-European allies decide what they want Europe to be, the crisis will continue. By that time, the waitress-cum-midwife in the Plaka intends to be long gone.
-> I will be tweeting today @paulmasonnews and blogging tomorrow.
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