What will happen in this spring’s Greek elections?

Evangelos Venizelos, formerly the beleaguered finance minister of what remains of the Greek government, fresh off a negotiation of Greece’s second bailout (including an orderly debt writedown deal with private creditors), won the uncontested leadership of Greece’s main center-left party Sunday, in advance of legislative elections expected to occur in late April or early May.

Although he had only served as finance minister since June 2011, Venizelos quickly became battle-tested in having faced down the “troika” of the International Monetary Fund, the European Commission and the European Central Bank.  If you can negotiate against Angela Merkel, Christine Lagarde and who-knows-how-many creditors, and you can emerge with Greece remaining intact, however delicately, perhaps you have a decent shot are rehabilitating the Panhellenic Socialist Movement (Πανελλήνιο Σοσιαλιστικό Κίνημα), or “PASOK” (ΠΑΣΟΚ in Greek).

But if Greece’s economy is in shambles, its politics are perhaps in even worse shape — no one thinks Venizelos’s new job will be any easier.

A new poll today shows PASOK with just 12.5% support (down from the 44% it received in the 2009 elections), and Greece’s center-right New Democracy party (Νέα Δημοκρατία) with just 22.5% support (down from 33.5% that it received in the 2009 elections).

Former minister of culture Antonis Samaris will lead New Democracy into the election, which will be only the second Greek election that neither a Papandreou nor a Karamanlis will lead one of the major parties, at least since Greece returned to democracy in 1974.

Just three years ago, PASOK won a landslide victory under George Papandreou (whose government fell in November 2011 as the debt crisis threatened new heights of damage to the global economy).  Voters had repudiated New Democracy and then-prime minister Kostas Karamanlis, under whom Greece’s economy was battered during the initial 2008 financial crisis.

Under PASOK, however, the economy got much, much worse. As the global financial crisis receded, the Greek sovereign debt crisis took center stage as the first domino in a European sovereign debt crisis.  A once-stridently leftist party has now become the party of the harshest budget cuts in generations, but a long-term solution for a prosperous Greece in a prosperous Europe remains elusive.

How elusive? This “choose-your-own-adventure” summary by Daniel Davies from last month will give you a taste.

So while Greece — its government, its economy, its social fabric, its culture — is crushed in a way virtually unknown since the 1940s, the key question is whether any number of parties could step up or unite to fill the political void in a country where both major parties have been all but discredited:

  • The Communist Party of Greece (Κομμουνιστικό Κόμμα Ελλάδας), or “KKE” is polling at 12.5 of the vote, up from 7.5% in the 2009 election.
  • The Coalition of the Radical Left (Συνασπισμός Ριζοσπαστικής Αριστεράς, Synaspismós Rizospastikís Aristerás), or “SYRIZA” (ΣΥΡΙΖΑ in Greek) polls 12.0%, up from 4.6% in the 2009 election.
  • The Democratic Left (Δημοκρατική Αριστερά), or “DIMAR” currently wins 11.5% of the vote — it’s a new, democratic socialist party that emerged in 2010.
  • The Indpendent Greeks (Ανεξάρτητοι Έλληνες) emerged only last month, a splinter group formed by a former MP for New Democracy as a right-wing anti-austerity party.  It currently polls 11%.
  • The Popular Orthodox Rally (Λαϊκός Ορθόδοξος Συναγερμός), or “LAOS” (ΛΑ.Ο.Σ in Greek), a longtime radical, populist and right-wing party that’s been historically concerned with blocking Turkey from EU membership and blocking EU immigration, polls 3% — it is polling slightly below its 5.6% result in 2009.
  • The Ecologist Green (Οικολόγοι Πράσινοι) party polls 2.5%, which is exactly its 2009 result.
  • Perhaps most ominously, the far-right and neo-fascist/neo-nazi Golden Dawn (Χρυσή Αυγή) polls 3.5%, a staggering increase over its 2009 result of 0.29%.

Greece’s economy has lost 20% of its value since 2008, in recession since 2008 (in 2009 and 2010 it had negative 3.5% growth and in 2011 suffered nearly negative 7% growth).

Unemployment is set to reach 19% this year.

Greece is trapped (for now, at least) in a monetary union with a currency that’s vastly overvalued in order to permit Greece to be competitive globally.  The external requirements for Greece to cut spending, in order to receive its bailouts, are not only hampering potential future growth, but are causing lasting harm to the social and cultural fabric of Greece — see last week’s startling report in The Guardian about a surge in Greek HIV infections due to a lack of clean needle exchanges and the return of endemic malaria to the south of Greece.

In addition, Europe and the IMF have demanded that Greece address many of its long-underlying problems, many of which developed over decades.  Greece’s regulatory state needs to become less corrupt and less inefficient.  Greek taxpayers have long taken a relaxed attitude to tax compliance, reducing Greek revenue.  The Greek government most certainly fudged its budget numbers to meet the criteria to get into the euro in the first place.  A 2010 report showed, quite devastatingly, that Goldman Sachs had devised a cross-currency swap for Greece to allow it borrow even more money by using fictional exchange rates.  Reversing this culture in any country takes time — to try to do so while implementing unprecedented austerity

Meanwhile, it’s not clear that Greek’s political economy has ever been up to the task.

The birthplace of direct democracy, Greece saw precious little of it throughout the 20th century: a bitter ideological civil war from 1946 to 1949 prevented it from riding the rebuilding boom of the 1950s that revitalized Europe.  The rule of a socially conservative military regime from 1967 until 1974 further isolated the country from its more liberal and prosperous Western European neighbors.  So modern Greek democracy is quite novel than it seems — and remains immature in ways that have prevented its becoming a truly pluralistic democracy.

As Matthew Lynn writes in Bust: Greece, the Euro and the Sovereign Debt Crisis:

The story of postwar Greece is the story of two families, the Karamanlises and the Papandreous. [In] Greece, power has been divided up between the Karamanlises and the Papandreous as if it were their own personal heirloom.

Kostas Karamanlis, who served as prime minister from 2004 to 2009, is the nephew of Konstantinos Karamanlis, who founded New Democracy in 1974 and served as either prime minister or president in every decade from the 1950s to the 1990s.

George Papandreou, who served as prime minister from 2009 until late 2011, is the son of Andreas Papandreou, who founded PASOK and served as prime minister.  Andreas, in turn, was the grandson of Georgios Papandreou, who served as prime minister in the 1940s and in the 1960s.

As Lynn remarks:

There is something almost medieval about the way power is switched from one family to another.  It is closer to the kind of family politics that Machiavelli wrote about than modern mass democracies.  And that reflects the kind of country that Greece has been for the past century.

Against all of that background and amid all of the turmoil of the past four years, the upcoming election is not just a referendum on austerity or even just Greece’s role in Europe.  It’s also a referendum on the political and economic status quo of the past four decades.

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