Bloomberg News

Greek ‘Indignants’ Face Down Politicians They Blame for Plight

June 28, 2011

(See {EXT4 <GO>} for more on Europe’s debt crisis).

June 29 (Bloomberg) -- His face covered in white powder to stop the tear gas from stinging, George Styliatis is into his second month of trying to topple Greece’s leadership.

“We need this government to fall, we need a new constitution, a new Greece,” Styliatis, 41, an unemployed former ambulance driver, said as he mingled in central Athens during a general strike yesterday. “They wanted us divided, but at this time, as you see around us, all the people are here.”

Nowhere in Europe are politicians facing the wrath of the people who put them in power more than in Greece.

As Prime Minister George Papandreou tries to unite his party behind a package of cuts, increased taxes and asset sales, protesters are galvanizing their opposition to the politicians they blame for needing it in the first place. Lawmakers cast ballots today and tomorrow on the austerity measures, conditions for more foreign aid needed to prevent Greece from becoming the first European Union member to default on its debt.

Anger has turned Syntagma Square opposite the parliament in Athens into a symbol of the clash between the direct democracy of the ancient world and the decay of modern Greek politics, which started with the end of the military junta in 1974.

“A big percentage of the Greek people is under-represented in the Greek Parliament,” Finance Minister Evangelos Venizelos, appointed this month by Papandreou to bolster support for the economic plan, said in a speech in parliament late yesterday. “They should come so we can have a serious discussion. We are obliged to take such initiatives.”

Facing Reality

The daily crowds, who call themselves the “indignants” after a Spanish protest group, are also a reflection of how Greeks are balking at having to pay for an economy that was living on borrowed money, according to Stathis Kalyvas, a professor of political science at Yale University who did his first degree in Athens.

“The main messages coming out of it smack of the same kind of populism that got the country in its current trouble: the belief in easy solutions, the refusal to face up to reality,” Kalyvas said by e-mail from the U.S.

Papandreou’s latest, five-year, 78 billion-euro ($112 billion) plan includes higher taxes on restaurants and bars and for heating oil and lowering the tax-free threshold to 8,000 euros from 12,000 euros. Newspaper To Vima calculated the additional burden for an average Greek family of four at 2,795 euros a year, about the same as one month’s income.

No Stopping

The economy contracted 4.4 percent in 2010 and will shrink a further 3.8 percent this year, according to EU and International Monetary Fund inspectors in June. The nation’s debt will peak at 166 percent of gross domestic product next year, or two-thirds more than the size of the economy. Greek two-year bonds have plunged and now yield 26 percent.

“We won’t stop our efforts whether they vote for the plan or not,” Yiannis Koutsogiannis, 60, a municipal worker in the Athens suburb of Iraklio, said as he took part in the general strike yesterday with police dispersing groups with tear gas. “They caused this crisis not the workers.”

The relationship between Greek voters and their politicians is about doing favors in return for power, according to Athanasios Tsakiris, a doctor of political science at the National and Kapodistrian University of Athens.

Employment Machine

The Greek state turned into an employment machine, from bureaucrats in villages to workers at government-controlled enterprises. When people stopped working, they got among the most generous retirement benefits in Europe.

Economic growth averaged 4.4 percent a year between 2000 and 2007, according to data compiled by Bloomberg, and there was no shortage of credit. In 2001, Greece joined the euro and ditched the drachma.

Railway workers earned four times more in salaries than total ticket sales, while the Athens bus operator had 2,000 vehicles and three times as many people to run them, according to figures from the companies and government last year.

Greek pensioners on average lived on 96 percent of the salary they had when they worked, more than twice the proportion of earnings as Germans, according to the Organization for Economic Cooperation and Development last year.

“The politicians were using their ‘clients,’ meaning the voters, to gain power and the ‘clients’ would put up with the situation to secure the family income,” said Tsakiris. “This is the way the public sector has been working all those years.”

Pitched Tents

The protest on Syntagma Square has escalated since May 26 into a permanent demonstration with more than 100 tents pitched outside the parliament. On weekends, families mix with students and union groups. Police said the largest rally was on June 5, when 50,000 people gathered.

Almost 68 percent of Greeks support the action, according to a poll by the Statistics Department of the Athens-based University of Economics and Businesses between June 10 and June 17 in the area of Attica, which includes Athens, and Central Macedonia, where the second city of Thessaloniki is located.

Municipal worker Koutsogiannis’s complaint is that he will get 600 to 700 euros a month in retirement after 40 years in work while a politician gets a “fat pension,” he said.

Greek members of parliament are entitled to a lifetime pension of at least 1,000 euros a month after having served for two terms, or eight years, according to Athanasios Papaioannou, general secretary of the parliament. While lawmakers have taken a 25 percent pay cut, they still have drivers, leased cars, bodyguards and immunity from prosecution.

Blaming Politicians

“All these years our government didn’t work for us,” said Maria Boulis, 23 and unemployed. “We have to have a government that cares about us, not for their own profit.”

The gripe is echoed across Syntagma Square, where people blame the 300 lawmakers for the economic crisis and lament the dynastic nature of Greek politics.

The two biggest political parties, Pasok and New Democracy, have been switching places in government since the military dictatorship. Papandreou is the son of Pasok founder Andreas Papandreou, while his predecessor, Konstantinos Karamanlis, is the nephew of the founder of his party.

“The two big parties in Greece for a long time are looking out only for their own personal profit,” Yiannis Aivaliatos, 56, an environmental technician who attended protests at Syntagma on June 21 as Papandreou, 59, faced a confidence vote in parliament he later won. “We believe something new will be born from this gathering of the people.”

New Politics?

Papandreou plans a referendum on the Greek political system, including removing the immunity from “criminal responsibility” that applies to members of parliament.

“On top of our priorities is a new constitution, intelligible for all citizens,” Papandreou said on June 19. He said changes will be made in the way parliament is run, the number of members, ministerial remits, party financing and the election and justice systems.

In the meantime, Papandreou is focusing on trying to unite his Pasok deputies behind the austerity package in parliament. He replaced Finance Minister George Papaconstantinou with Venizelos in an effort to shore up support after two of his lawmakers quit parliament on June 17.

Styliatis, the former ambulance driver who has demonstrated in Syntagma Square since May 26, is urging Pasok, traditionally supported by the unions, to vote against the plan. He reckons Greece should walk away from its debt and go back to the drachma because Papandreou is “selling out” to foreign interests.

“People must not leave the square,” he said. “This road that they have put us on leads nowhere. The debt we have now is shameful. It is mostly interest that we are paying to bankers and that must be stopped.”

--With assistance from Maria Petrakis in Athens. Editors: Rodney Jefferson, John Fraher

To contact the reporters on this story: Tom Stoukas in Athens at astoukas@bloomberg.net; Eleni Chrepa in Athens at echrepa@bloomberg.net

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net


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