New York Times
June 27, 2011
Prime Minister George Papandreou is likely to win this week’s crucial parliamentary vote on his latest austerity measures — a key condition of Greece receiving a second bailout from its euro zone partners. But there will be protests and possibly riots outside the Parliament and the vote will be tense and narrow. Thereafter, Greece can progress along the path agreed in Brussels last week, but it will do so in a weak position and in need of continued solidarity from its partners.
The parliamentary victory should be enough to abate the immediate crisis. But Greece’s vulnerability on the financial markets will continue and the talk of default will not go away. In the meantime, an uncertain, divided and weak country must implement the new austerity measures, undertake parallel institutional reforms and restore its international reputation. No euro zone or E.U. state has faced this kind of challenge in recent memory.
The Papandreou government must also contend with a political and social crisis. The main political parties remain poles apart and the prospects of reform by consensus appear close to zero. Opposition also comes from the powerful public-sector unions, an increasingly fearful public, and disparate political forces maintaining constant street protests. Within his own party, the Pan-Hellenic Socialist Movement, better known as Pasok, Papandreou has lost MPs and supporters and has never been more constrained. Socially, more and more Greeks appear despondent and unsure of the path being taken. Observing the protests just over a week ago, it was clear that there is a stratum of society ready for a radical and/or populist leader: either might provide a nationalist answer to a seemingly interminable crisis.
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