Greece: Success story or reshuffling of cards?

Greece: Success story or reshuffling of cards?

Few could forget the famous cover of the German magazine Focus of the 22.02.2010 issue, showing the ancient statue of the Aphrodite of Melos but with the missing right arm re-attached and with its middle finger lifted in an improper gesture. “Crooks in the family of Euro” was the title of the cover story and the theme was about the then “black sheep” of the Euro, Greece, who, as the first Euro member to fall victim of the economic crisis, had to be demonized and singled out as a bad example. Several German articles, especially among the pro-Merkel media, followed the same line where the Greeks were sufficiently “assassinated” for their lazy and irresponsible character contrary to the responsible style of the northern European citizen. The stereotype of the “lazy, leisure-loving, tax-evading Greek” spread fast among the European media and kept the Greek media busy in defending the opposite.

Three years later, and after two huge bail-out agreements and write-offs of debts, the Greek economy is still in bad shape. After five years of recession, the economy is expected to have shrunk by 25% in total by the end of 2013. One million jobs have been lost in the private sector and unemployment tops the Eurozone with 27% (60% among the young). Analysts are talking about an entire generation of largely educated people being lost. Poverty, low income, deterioration of health services and education, and loss of labor rights are among the many destructive side effects of a tough austerity program implemented with diligence under the monitoring of the representatives of the creditors (EU, ECB and IMF).

Yet, if you look into the copy of the last issue of the Economist, you would be surprised at the change of climate. “Up, but not out” is the title of an article which sees many signs now which point to a radical positive change in Greece. “Greece remains in recession but recovery may be around the corner... The threat of “Grexit” from the euro has receded,” claims the writer who emphasizes that a lot of this change of heart is attributed to Mr. Samaras who managed “to keep his awkward coalition under control, the PanHellenic Socialist Movement (Pasok) and the Democratic Left who had even accepted deep cuts in health and welfare spending and now job losses for civil servants.”

But the most turnabout change was seen among the German media. There, Samaras is now seen as “winner” who managed from a “prime minster of bankruptcy to become a prime minister of hope” as portrayed by the populist tabloid Bild while for other German media Samaras is a reformer who achieved the impossible for his country.

However, this late optimism from abroad is viewed with deep skepticism from large parts of the Greek society, particularly the middle-classes and the youth who have been mostly hit. “In spite of today’s rhetoric abroad that Greece will not be kicked out from the Eurozone, I reckon that at this moment the chances for Greece to lead itself out of it, are greater than staying in it, wrote a prominent former politician from the Socialist Left while the official opposition of leftist SYRIZA accuses the government of a “well orchestrated cheating of the people.” Alexis Tsipras, SYRIZA’s leader says, “There is no success story, there is a tragic reality which gets worse by the day.”

There is no doubt that Samaras has succeeded in creating a stable government where, though, his party retains the lion’s share. Some economic indicators are promising, although there is still a long way to go. Also he has managed to get the backing of the Germans who now promote the Greek austerity program as a success story for the tight fiscal policy they promoted within the Eurozone. The upcoming crucial elections for Angela Merkel may have an important role in the recent eulogies by the German media. What I see as more interesting, though, is the reshuffling of political cards inside Greece as the two minor government partners are rapidly losing support and a stronger Samaras – as seen by the recent polls – may want to seek to his left and to his right for a broader based renewed New Democracy party.