What have we become?

The Economist 1-7-2011

Some Greeks are angry about their paralysed, corrupt country. Others just want the good times to come back

THEY had been warned. As Greece’s 300 legislators debated, and finally approved, an internationally backed financial-rescue plan with many clear downsides—it will pile pain onto hapless firms and citizens who already pay taxes, for instance, and so subsidise those who do not—some dire pronouncements on the possible consequences of saying “no” to the world were ringing in their ears.

A group of 18 Greek economists (mostly from the nation’s academic diaspora, in flight from the cronyism and disorder that mar campuses back home) listed some of the likely results if the country opted for autarky: in other words, if it stopped paying its debt and rejected the idea of moving, with foreign help, towards fiscal and administrative health.

Public-sector wages would plunge, banks would crash, the country would be barred from world debt markets for years.

Leaving the euro could cause hyperinflation.

Theodoros Pangalos, the famously blunt deputy prime minister, put it even more starkly. If Greece were to break with its would-be saviours and launch a new drachma, local banks would be besieged by panicked depositors and the army would have to keep order. “The shops will empty, and some people will jump out of windows,” he told El Mundo, a Spanish daily. (Last year Mr Pangalos irked some compatriots, and impressed others, by saying that ordinary Greeks, as well as the political elite, had wasted the loans and subsidies that rained down on the country: “We ate it up together.”)

Dire as these warnings sounded, this week the country still seemed finely balanced between those ready to embrace change and those who apparently dread it so much that they might bring the entire house down rather than risk any damage to their own interests. Alexis Papahelas, editor of Kathimerini, Greece’s newspaper of record, has coined the term “coalition of the unwilling” to describe the array of ultra-leftist and ultra-traditionalist forces bent on blocking reform. As he has noted, the number of citizens sullenly suspicious of all change may now increase, as middle-class Greeks see their hard-earned prosperity go up in smoke.

On the other hand the country does have a constituency of modernisers: people depressed by interrelated woes, including a malfunctioning justice system, a kleptocratic civil service and impunity for the corrupt. Stathis Theodorakis, a television host and founder of www.protagon.gr, a popular website, says he finds keen interest among the public in various reforms that the mainstream parties would never dare to embrace: from liberalising drug laws to cleaning up the police.

And for people enraged by the impunity of the well-connected, there was satisfaction this week at the uncovering of a huge match-fixing scam in Greek football. Two club chairmen were among those arrested, as police said they had amassed a 90,000-page dossier on the affair and were investigating 85 people, from players to bookmakers. “There is a direct link between what is happening in football and broader Greek society,” said Pavlos Yeroulanos, the culture and sport minister.

If only Greece’s broader woes were as easy to put right. As parliamentarians bickered and police battled demonstrators outside, rolling power cuts were imposed across the country because of a two-week-old strike by workers at the Public Power Corporation, whose powerful and privileged union is high on many people’s list of impediments to sensible change. Also affected by a strike, timed to coincide with the debate on the so-called medium-term rescue plan agreed on with the European Union and the IMF, were schools and hospitals. Flights were disrupted by a stoppage of air-traffic controllers, and tourists were prevented from boarding ferries to the islands because of a picket by the communist labour movement, PAME.

This will be only a small dent, perhaps, to the confidence of Greek tour operators, who say arrivals are slightly up this year, albeit not as much as in destinations like Turkey and Cyprus. The mood on popular Aegean islands remains quite upbeat, despite a rise in panic sales of gaudy new second homes which had drawn the attention of tax collectors. Still, there is only so much tear-gas that visitors to the museums and ancient sites of downtown Athens can be expected to ingest.

Many of the malcontents—whether in unions, or the more spontaneous protesters of many ideological hues, encamped near parliament—say they were demonstrating against an entire political class; or at least the ruling Socialists and their centre-right opponents, New Democracy. One banner outside parliament asked “how many pieces of silver” politicians have taken to sell the nation.

If such protests implied a mature rejection of the country’s political order, that would be encouraging. As Nikos Mouzelis, a sociologist, points out, Greece’s two big parties have become machines for dispensing patronage and pork on a scale that is amazing even by the standards of Mediterranean democracy.

Can anything be done, apart from economic plans designed to stave off short-term disaster? George Papandreou, the prime minister, has floated the idea of constitutional reform that would put an end to old-time patronage politics by cutting the number of legislators and altering the electoral system. If such changes were approved in a referendum, it would mean Mr Papandreou had successfully appealed to citizens over the heads of his own parliamentarians. That may be his last, best hope of regaining the political initiative.

But it is also possible that many Greek citizens are disappointed with politicians not because they reject the old patronage system, but because it has run out of money and is now failing to provide for them. If Mr Pangalos is right that everyone ate at the trough, then some people may still be craving handouts. In that case, the people responsible for Greece’s fate—at home and abroad—will now have to cope with the politics of hunger.