Crisis? What crisis?

Government upbeat about financial future

The message that Greece wants to convey as it takes over the rotating presidency of the European Union’s Council of Ministers was perhaps best summarised by Yannis Stournaras, the finance minister, in Athens last week. “We’re assuming the presidency not as a country in crisis but as a country that is back on the path to recovery,” Stournaras told reporters in Athens on Wednesday (8 January), shortly before the Greek government received the college of European commissioners to mark the start of its Council presidency.

Greece is struggling more than other member states to convince its fellow members of the Council that it can pull off a credible presidency. No European country in peacetime has seen its economy dip as sharply as Greece, Prime Minister Antonis Samaras said.

Fighting the crisis has absorbed all the energy of the current government, the first-ever grand coalition of centre-right (Samaras’s New Democracy) and centre-left (Pasok, led by Evangelos Venizelos, the deputy prime minister) – the third government in the space of two years.

The crisis has led to the collapse of support for Pasok – since 1974 New Democracy’s main rival and ideological opponent – and the rise of the far-left Syriza in its stead. On the far-right fringe, Golden Dawn has captured the votes of some disenchanted Greeks with its aggressive racist policies; it might now be banned in the run-up to elections to the European Parliament (as well as municipal and regional councils) in May.

The country is exhausted after years of tough austerity under adjustment programmes demanded by the ‘troika’ of international lenders – the European Commission, the European Central Bank and the International Monetary Fund – in exchange for some €240 billion in bail-out funding. “Greece does not want to have any more fiscal conditionality,” Stournaras said. “It is out of the question because it is already too tough.” Venizelos, who was finance minister in the previous government and now deals with foreign affairs, last week angrily blamed the EU’s belated response to the crisis for exacerbating its effects.

But this, the Greek government seems to suggest, is the past. The economy is expected to grow by around 0.6% this year, Stournaras said.

The budget produced a surplus last year, before the cost of servicing its staggering debt is factored in. This should make it possible to re-negotiate the terms of Greece’s bail-out, either with lower interest rates or longer repayment periods.

The Greek government plans a limited return to the financial markets later this year. “Tangibly, recovery has already started, and the psychology has changed,” said a bullish Samaras. “The markets are optimistic.”

Scared of Syriza

But there are cracks in the façade. The government is terrified of a strong showing by Syriza in the May elections, which would undermine its authority and the country’s ability to service its debt – Syriza has pledged to abandon the troika’s strictures.

Just how terrified was made clear when the normally controlled Samaras launched into a blistering attack – in English – on Syriza and its charismatic leader, Alexis Tsipras, whom he accused of being “anti-European, anti-Western and anti-NATO” during a joint news conference with José Manuel Barroso, the president of the European Commission.

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