Monday, June 18, 2012

Another Month, Another Greek Election

The elections are over in Greece, and what reports have come out of there may seem a bit confusing, but I think I can boil it down to this quote by the BBC's Chris Morris:

The main parties do not seem to be in the mood to hang around and haggle. Everyone expects a government to be formed quickly - but this is Greece so let's wait until the signatures are on paper.

The big problem they face? New Democracy and Pasok are blamed by many Greeks for running the corrupt governing system that got the country into a mess in the first place.

Antonis Samaras begins urgent Greece coalition talks

OK, maybe that's getting ahead of ourselves...

Let's start with the basics. Here is a table explaining the results, with the parties listed in order of their presumed political stance, based on the graphic at the bottom of the BBC article I just quoted. Also noted is whether each party favors accepting the current "bailout" deal, which calls for considerable austerity on the part of the Greeks, and whether they favor using the euro as their currency:

PartyAccept austerity?Stay with Euro?May, 2012June, 2012
Democratic LeftNoYes1917
New DemocracyYesYes108129
Independent GreeksNoYes3320
Golden DawnNoNo2118

[The numbers in the May and June columns are legislative seats won.]

The parties favoring voiding the bailout and abandoning the euro have a white background. The parties that favor accepting the bailout more or less as-is, and staying with the euro have a yellow-ish background. The white is just a good choice to contrast with the table color, the yellow to me connotes something, which is that these are also the parties that have largely been in power these last few years, and can reasonably be blamed for Greece's current financial conditions if any politicians in Greece can.

As you can see, the establishment picked up a few votes in total. Syriza, the main opposition party, did as well.

So much for the votes. What does it mean?

Greece has a parliamentary form of government. The party that has a majority of votes in their legislature gets to run the government. In this case, there is clearly no party that has a majority, so the party that wants to rule has to form a coalition with enough of the other parties to gain a majority. A coalition is an agreement between the parties to cooperate on forming a government. The party with the biggest vote total within the coalition gets to run things, but the coalition partners will typically demand something that they want, as well. If the New Democracy party can't form a coalition for some reason, then Syriza, as the runner-up, will get an opportunity.

The reason that there are columns in that table, though, is that last month these same players failed to form a ruling coalition. That's probably one reason why the more politically extreme parties lost votes this time - people gravitated toward the more centrist parties that they thought would represent their interests.

In America, of course, we do things differently. Here, we form political coalitions within parties. The Democrats are a coalition of organized labor, environmentalists and some other progressive groups, and minorities of various sorts. Republicans are a coalition of "free market" ideologues, most of whom are well-served personally by that philosophy, libertarians, and people who refer to the Civil War as "the War Of Northern Aggression". One practical difference between the two types of coalitions is that it's much easier to leave the parliamentary form - the various parties each have their own loyalties. There is little or no loyalty to the coalition. In America, in contrast, it sometimes seems as though the parties are all about the brands, because getting people within them to agree on anything is just too difficult. It's rare, indeed, for a coalition partner like labor, say, to leave a party. It's just not done.

Much of that explanation is a way of explaining my own preconceptions about the political situation in Greece, and why I agree with Chris Morris's assessment of it. I don't see a coalition as being an easy thing to form here, because no one party has enough power to form one that it will mostly get what it wants. New Democracy needs Pasok right now, and I'm sure Pasok knows it. Neither the Independents nor Golden Dawn (A.K.A. "the fascists") have enough votes to put ND in charge by themselves. On the left, it's even more unlikely that Syriza can form a government, because all the left's votes together aren't enough.

Even if ND can form a government, it's not likely to last long. They and Pasok are the old guard. They're the folks who got Greece into this mess, as far as a many Greek voters are concerned. Since it's unlikely that the European Central Bank, the International Monetary Fund, and the governments they own will agree to much in the way of a changed bailout deal. A Greek government that isn't willing to leave the Eurozone has no leverage.

Meanwhile, of course, Greece's problems aren't fixing themselves. As Reuters reports:

With Greece in its fifth year of recession, protests have regularly choked central Athens, some hospitals are running short of medicines, thousands of businesses have closed and beggars and rough sleepers are multiplying.

Greek leaders close to coalition, aim to ease bailout

Actually, the term for what Greece is in is a depression. Its economy has been shrinking for the past two years, at least. It's been a basket case for a long time, and now it's going to be hit with yet more austerity. No one who can keep his saliva from running down his cheeks thinks this is going to go well.

So, yes, Greece will probably be having another election in a few months. I don't see how things can remain as they are much longer than that.

Afterword: Of course, France also had an election over the weekend:

French President Francois Hollande's anti-austerity front has received a boost as his Socialist Party romped to victory in the country's parliamentary elections.

The Socialists won between 308 and 320 seats in the 577-member National Assembly, clearing the way for Hollande to implement his centre-left programme without having to haggle with other leftist factions or the opposition.

Never in the history of the 54-year-old Fifth Republic has a party had so much power. Sunday's win puts the Socialists in control of both houses of parliament (the National Assembly and Senate) for the first time. They also control most regions and large cities.

Socialists secure big gains in France

Call me a pessimist, but I'm getting that "Democrats in 2008" feeling all over again.

Yes, the Socialists have more power than they have for a long time. Yet, I suspect we won't see much change here, either. After all, Socialist Party leader Francois Hollande's predecessor Dominique Strauss-Kahn was head of the IMF, one of the organizations trying to austere Greece to death. It's hard to imagine that the Socialists in their current incarnation are going to turn around and tell the banks to go to hell.

But we'll see. I'd love to be proved wrong there, and given how little I understand French politics, it's certainly possible that I will be.

UPDATE: Over at Naked Capitalism a few days ago, Philip Pilkington, an Irish economics reporter, wrote an article called "Budget Hawk Socialism – Why Calls for Balanced Budgets Lay the Path for Socialism". The best summary I can give of it is that the longer the balanced budget mania continues, the smaller the private sector will become, as when the government actually does come in with stimulus spending, it will have to be more than it is right now. Grain of salt time, I think, but it's certainly relevant to what we're seeing both here and in Europe.

Sooner or later, something has to give. The best we can hope for is that it's just the idea of perpetually balanced budgets being the height of good government that goes out the window.

No comments: