Greece is a country with deep Leftist beliefs, the result of the influence of the Greek Orthodox dogma and the lack of a bourgeois class in the first decades of the establishment of modern Greece, in 1827. Today Greece has a huge public sector, non-productive and corrupt, an unfair tax system exploited by its civil servants and ruling politicians, a heavily unionized and undisciplined labor force and a deeply cartelized market.
In this context Greece has a strong Leftist-Communist political class (Leftists, Communists, Socialists proper, etc.), which totals something between 35 and 45% of the voters. Adding in the picture one and a half million immigrants, several with voting rights and many illegal, you get a rough picture of the socio-political profile of Greece.
In three weeks time, on June 17, the Greeks will vote again and the country is likely to have a new government. The current electoral law provides that the first winner will get a bonus of 50 members in the 300-seat Parliament while the remaining 250 will be distributed in a quasi-proportional pattern to the parties that will obtain the ceiling of 3% for entering Parliament.
In the last election (May 6), six parties entered Parliament. Nea Dimokratia (EPP) under Andonis Samaras 19% and 108 seats, SYRIZA (quasi-communist coalition) under Alexis Tsipras 18% and 52 seats, PASOK (center-left Socialists) under Evangelos Venizelos 13% and 41 seats, Independent Greeks (Right Wing) under Panos Kamenos 11% and 33 seats, KKE (Communist Party) under Aleka Papariga 8% and 26%, Golden Aurora (Far Right) under Nikos Michaloliakos 7% and 21 seats and Democratic Left (Socialists) under Fotis Kouvelis 6% and 19 seats. Despite extended negotiations no coalition government was formed and new elections were called for June 17 despite Alexis Tsipras was offered the chance of Left coalition government.
Opinion polls as to the possible election results vary as depending on the company and the client who pays for the poll. Indeed, Nea Dimokratia or SYRIZA, lead one over the other by 2 – 5 percentage points, depending on the poll. At this time, however, independent analysts having access to polls ordered by foreign embassies estimate Nea Dimokratia leading by approximately 3% and anticipate the formation of a centrist government.
Under the circumstances, for Greece there is two possible scenarios, the bad scenario and the worse scenario but it is quite unclear which one is the bad and which one is the worse.
Before entering into what may happen we should consider the realities and the constrains under which the new Greek government will operate.
Greece is in such situation that cannot avoid bankruptcy, as it cannot eliminate its primary deficit and cannot reverse recession to development. Until now, the Greeks became poorer by 17%. The question is whether, before any sign of recovery appears in the Greek skies, they will become further poorer by 30% or 80%. This will very much depend on how bankruptcy will be managed.
No matter who wins the election, Greece will remain in the Eurozone as it entirely depends on its partners and the cost for the Eurozone to exclude Greece is roughly estimated over one trillion Euro.
If Greece attempts to cancel or to unilaterally modify the agreement signed with IMF/ECB for the 105 billion Euro mega-loan, which implies a series of austerity measures payments financing Greece’s primary deficit (salaries, pensions, foreign trade deficit, etc.) will be suspended. Yet the direct disbursement for the payments to Greece’s foreign debtors will continue uninterrupted. Otherwise, any deviation from such a simple principle will create a catastrophic precedent for the Eurozone.
The potential threat of social unrest is real and, if the situation is getting out of control, it may get the dimension of a civil war.
Catastrophic Scenarios, but only for the Records
The current election law provides that the first party gets a bonus of 50 seats in the 300-seat Parliament, provided it is not a coalition of parties as it is the case of SYRIZA which is a coalition of 12 small leftist, communist, anarchists and extra-leftist parties including the followers of Bakunin. Recently, SYRIZA presented to the Supreme Court a new party statute, which declares that SYRIZA is not a coalition of parties any more but a single party thus eligible to receive the 50-seat bonus if it wins first position.
In this case, if the second party appeals and the Court decide that despite its new statute SYRIZA remains a coalition of parties (which is true), this may trigger a civil war. Indeed, is election seems to be the last chance of the Greek Left. Recent Greek history is rich of violence and they may well attempt a new civil war while millions of illegal guns are in citizens’ possession including eight hundred thousand Kalashnikov’s.
The second catastrophic scenario relates to Turkey. The Athens intelligence community does not rule out a provocative act in Thrace that will trigger a Turkish invasion and the occupation of Thrace and Kastelorizo Island thus completely changing the geostrategic map of eastern Mediterranean. The provocation could be a bomb in Mosque in Xanthi or Komotini at a Friday noon killing a couple of hundred praying Muslims. The provocation will be implemented retaliations and staged pogroms in the Muslim villages, which will force the Greek government to put the area under martial law. This will “legitimize” the Turkish army to invade Greece in order to “protect” the “Turkish” (Muslim) minority as it happened in Cyprus 40 years ago.
Such an action will stop all relations and negotiations of Turkey with the EU but in reality it is all what Ankara wants, as Turkey cannot comply with the European human rights standards. As to NATO, it will remain only an observer, as it cannot intervene in any dispute between two members of the Alliance. In considering such scenario one should recall the recent statements of former Turkish Prime Minister Tansu Ciller who admitted that the Turkish secret service was responsible for the big fires in Greece in recent years.
The Bad Scenario and the Worse-case Scenario
As several elements are missing, so to suggest which the bad is and which is the worse scenario, we will start with the most likely, as it is risky to define what is bad and what is worse.
Most probably, Nea Dimokratia and PASOK total at least 151 seats and form a government. This government will ask for the re-negotiation of certain parts of the loan agreement and Europe will accept. After all, there is a new wind is blowing in Europe and thus such a renegotiation of no-crucial parts of the agreement will be possible.
In this context, Europe will continue all payments as agreed. However the discontent among citizens will be generalized. The end result may be social unrest with SYRIZA, powerful more than ever and supported by its new members (the so called PASOK “waste” including trade unionists and the entourage of Akis Tsochadzopoulos currently in jail for receiving commissions from arms purchases when he was PASOK defence minister), will get into the streets attempting to initiate a civil war. It will depend entirely of the government to handle the crisis and if it proves successful, Greece might be led through a long thorny road after a decade or so to normalization and growth. However, this looks rather unlikely as a combined quasi-communist and communist opposition will not let it happen. Indeed, a victory of Nea Dimokratia, which looks likely, may prove only a futile exercise.
The second scenario wants SYRIZA to win and form a Leftist government. Given the lack of any government experience, the lack of cash for salaries, pensions and imports of basic goods (oil and gas, medicines, etc.) and the unwillingness of the EU to negotiate under pressure in the context of a populist approach, the government will soon lead the country to bankruptcy, yet within the Eurozone.
In order to survive the Leftist government will try to impose higher taxation, may block big bank deposits and will try to abolish the big cartels, which are keeping the Greek cost of living amongst the highest in Europe. Big cartels in Greece include fresh milk, cement, construction steel, supermarkets, domestic flights, vessel fairs, etc. while there is a series of small cartels in the islands, which control the trade of fruits and vegetable and other food items.
Think that a kilo of tomatoes in Corfu is at 2 Euro when opposite in the mainland (15 miles distance), same tomatoes are at 60 cents. Cartels in Greece are strong and unbeatable. In 2004 the European Commission has sent to Greece one of its high rank functionaries, a Greek from the Department of Competition, to head the Greek Competition Authority and he ended up in …jail, thanks to his involvement with the …milk companies.
However, the rule of the left will soon bring the total collapse of the country, which either will go into a total social unrest with unpredicted outcome or to new elections which is likely that will bring in power a new leader, the well-known from the Greek tragedies, Deus ex Machina. Most probable personality in this case, at this moment appears to be former Prime Minister Kostas Karamanlis who will lead the country to recovery. This is an idea that is getting rapidly ground in private discussions especially among the lower income classes and neo-poor.
If Greece manages to get through Leftist Symplegades to the Karamanlis solution, the country will eventually become integral part of Europe as it will get completely rid once and for all of the Left (communists and quasi-communists). The Greek Left is solely responsible for the post 1974 boycott of any serious attempt to modernize the administration and attract investments. Indeed, so far no foreign or national investor proved that naive to invest in a country which is ruled by an army of hostile bureaucrats and medieval trade unions.
Under all such considerations, a victory of the quasi-communist Left of SYRIZA, may constitute for Greece, its historical necessity, which however, may derail to endless adventures.