| C O N F I D E N T I A L ATHENS 001255
NOFORN
SIPDIS
E.O. 12958: DECL: 2019/07/17
TAGS: PGOV, ECON, GR
SUBJECT: A View From the Chamber: New Democracy MPs Discuss Early
Elections, the Far Right, and Reform
REF: A. ATHENS 1033; B. THESSALONIKI 31; C. ATHENS 935
CLASSIFIED BY: Daniel Speckhard, Ambassador, State, EXEC; REASON:
1.4(B), (D)
1. (C) Summary. In an effort to take the pulse of the governing
New Democracy (ND) party, Polcouns and Poloff on 13 July met with
two junior deputies, Apostolos Tzitzikostas and Christos
Staikouras, and a vice-president of the Parliament, Elsa
Papadimitriou, to discuss the government's agenda. Each of the
deputies was eager to demonstrate that the government of Prime
Minister Konstantinos Karamanlis retained vitality and a commitment
to reform. They noted that the government would be pressing ahead
with efforts to restructure the bloated government bureaucracy and
loss-making state-owned enterprises like the Hellenic Railway
Organization. The two junior MPs played down the possibility of
early elections this fall, noting Karamanlis would attempt to
rebuild public confidence in his government and hold out until a
potential stalemate over electing a new President forced a general
election next March. Papadimitriou, however, made a plausible case
for the possibility that Karamanlis could pull the trigger early in
order to force two rounds of elections within the next year.
Although dismissive of the populism of the rightwing Popular
Orthodox Rally (LAOS) party, the deputies nonetheless expressed
concern about the party's growing popularity and its ability to
draw support from ND's ranks. All interlocutors rejected the
possibility that Karamanlis would cooperate, formally or
informally, with LAOS. Instead, two of them noted that a grand
coalition with PASOK would not be out of the realm of possibilities
if neither major party could achieve a parliamentary majority in
the next election. End summary.
2. (C) Polcouns and Poloff met on 13 July with Apostolos
Tzitzikostas and Christos Staikouras, two junior New Democracy (ND)
deputies, and with Elsa Papadimitriou, a long-serving ND deputy and
the second of seven vice presidents of the Hellenic Parliament, to
discuss the governing party's agenda in the wake of the European
Parliamentary elections in June. Each in turn offered opinions
that reflected individual interests and concerns, as well as the
priorities of their constituencies. Tzitzikostas, who represents
Thessaloniki's first district, displayed the most concern regarding
the rise of the Popular Orthodox Rally (LAOS), which has made
significant inroads, particularly in northern Greece (refs A and
B). Staikouras, a London-trained economist from Lamia, said that
the economic crisis dominated the concerns of his constituents, who
paid little attention to nationalist issues. Papadimitriou's
political pedigree stems from family ties to the former Center
Union of George Papandreou's grandfather and namesake. She openly
acknowledged center-left sympathies despite over 20 years as a
member of ND and described her shift from the Papandreou's
Panhellenic Socialist Movement (PASOK) as a "matter of aesthetics."
She claimed that ND maintained her seat in the Argolis solely based
her personal popularity, since the region's voter base was
primarily center-left.
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Timing of Elections: Anybody's Guess
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3. (C) The media has once again been rife with rumors that Prime
Minister Konstantinos Karamanlis was toying with the idea of
calling another parliamentary election in September, despite ND's
trailing PASOK in public opinion polls. Tzitzikostas and
Staikouras, however, played down the possibility of an early
general election this fall. Tzitzikostas, in particular,
emphasized that a loss was a loss, irrespective of the margin. He
argued that the government's goal was to win back the confidence of
voters over the next six months. He noted that PASOK's election
victory in the European Parliamentary elections in June was hollow
because the Socialists had actually lost votes in real numbers
compared to the September 2007 general election. (Note: This is
sour grapes since ND also obviously lost even more votes. End
note.) Tzitzikostas claimed that PASOK leader George Papandreou
lacked a mandate to govern and that those who had abstained from
voting or had voted for the rightwing Popular Orthodox Rally (LAOS)
could be won back to ND. He noted that if ND could close the gap
with PASOK in the opinion polls by January 2010, Papandreou would
back out of forcing early parliamentary elections by blocking the
election of the next President of the Republic. When Poloffs
probed for possible presidential candidates in the event that
President Papoulias decided not to stand for reelection, Staikouras
noted that the Socialist politicians, former Prime Minister
Konstantinos Simitis and former Interior Minister Alexandros
Papadopoulos, were two names that were being bandied about in ND
circles. Staikouras noted that like most previous presidential
elections, bipartisan support was necessary.
4. (C) Tzitzikostas, who hails from Thessaloniki and boasted
close ties to the Prime Minister, claimed that Karamanlis wanted to
be the first Prime Minister since the restoration of democracy in
1974 to win three successive parliamentary elections. (Note:
Karamanlis's uncle and namesake accomplished the feat by winning
general elections in 1956, 1958, and 1961. End note.) The
government, therefore, was planning an aggressive reform agenda for
the summer and fall to rebuild popular support. Staikouras,
nevertheless noted that he and other deputies had been bracing for
early elections almost from the day that they had been elected in
September 2007. Both he and Tzitzikostas noted that another
scandal or unforeseen event could provoke an election with little
warning. Tzitzikostas warned that Greece could be entering-and he
emphasized "entering" to draw a distinction from the social unrest
of last December-a period of political instability akin to 1989-90,
when Greece held three parliamentary elections in eighteen months.
5. (C) By contrast, Papadimitriou said that she could foresee a
parliamentary election in October, followed by another in March
2010. She looked forward to implementation of ND's election law
passed in 2007, which would give the winning party a greater degree
of stability. (Note: The new law is similar to the election law
currently in force except that it allocates a premium of 50 seats
instead 40 to the party that achieves at least 41.5 percent of the
vote. The Greek constitution mandates that any new electoral law
not passed with a supermajority of 200 or more come into effect two
general elections after it is passed. End note) She claimed that
ND would be better off losing a close fall election because it
could leave PASOK to deal with the difficult social and economic
situation and then reap the benefits of being in opposition when
another election would be forced in the spring.
--------------------------------------------- --
Putting the Government Back on Track
--------------------------------------------- --
6. (C) Both Tzitzikostas and Staikouras were critical of the
Prime Minister's handling of the social unrest in December 2008 and
his failure to more quickly denounce and deal with corruption
scandals linked to ND. Tzitzikostas condemned the decision to
restrain the police during the riots, noting that this did more to
damage the government's popularity-particularly among ND
voters-than the decision to avoid casualties. Staikouras,
meanwhile, regretted Karamanlis's delayed response to the Vatopedi
Monastery land swap scandal, which undercut the government's claims
to be committed to clean government. Staikouras expected, however,
that his party would suffer less political fallout than PASOK from
the brewing Siemens bribery scandal. He claimed that ND members
implicated in the scandal, such as Kyriakos Mitsotakis, were tarred
as individuals without incriminating the party as a whole.
However, former PASOK insider Theodoros Tsoukatos's admission of
receiving one million Deutschmarks (EUR 420,000) from Siemens in
1999 to help finance the Socialists' election campaigns implicated
the whole party structure (ref C).
7. (C) Both MPs, however, sought to emphasize that ND was
committed to reenergizing its reform effort and stressed that the
government did not plan to wait until the fall, when the full
Parliament came back in session. Tzitzikostas claimed that ND's
first major task was to take on the Greece's bloated public
sector-a view seconded by Staikouras. Getting more specific,
Staikouras noted that the government planned to shed jobs and
restructure the state-owned Hellenic Railway Organization (OSE).
Noting that the railroads were hemorrhaging money, he claimed that
OSE was losing twice as much money per day as Olympic Airways prior
to its privatization. The government also was developing plans to
streamline the number of "special category" jobs in Greece that
were considered dangerous and thus qualified for early retirement.
He hoped that measures would be adopted as soon as July or
September at the latest.
8. (C) Tzitzikostas and Staikouras were sanguine that the
government could ride out any potential labor unrest, including the
railroad strikes that have already begun. Instead, they were
confident that voters would reward ND for taking on tough reforms.
Staikouras claimed that most of the Greek public was ahead of
members of Parliament regarding their willingness to suffer in the
short term for the long term benefits that would come from serious
structural reform. Both MPs sought to downplay the impact of the
global financial crisis on Greece, claiming that the summer tourism
season would not be as bad as projected. Staikouras, moreover,
insisted that the growth in Greece's budget deficit and its
unemployment figures remained below the EU average.
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Dismissive, But Running Scared of the Far Right
--------------------------------------------- --------------
9. (C) All three interlocutors were quick to dismiss LAOS as a
long-term threat to ND. They emphasized that LAOS had a populist
agenda with no credible policy alternatives. They noted that most
LAOS supporters were conservatives attracted to the party as a
protest vote against the government. Citing the party's
demographics as evidence of its lack of a future, Papadimitriou
claimed that 70 to 80 percent of LAOS voters were from ND; the
majority was males over 50 years old. Tzitzikostas even claimed
that support for LAOS would collapse when ND was once again in
opposition. In the next breath, however, he labeled LAOS the most
dangerous party in Greek politics because of its willingness to
pander to Greek nationalist and xenophobic sentiment. The deputies
acknowledged that the growth in the popularity of LAOS had come at
ND's expense, and the governing party had done a poor job of
countering LAOS's message. Tzitzikostas, for example, defended the
crackdown on illegal immigration in recent weeks, but noted the
poor timing of the government's moves because it played into the
perception that ND feared the far right.
10. (C) The ND deputies rejected any form of cooperation between
their party and LAOS. They noted that even an informal coalition
with LAOS would undermine popular support for ND. Although
Tzitzikostas acknowledged that ND could still govern without a
parliamentary majority as long as the opposition remained
disunited, he said that Karamanlis would prefer to call an election
if another deputy left or was forced out of the ND parliamentary
group. He noted that Karamanlis would not risk being beholden to
LAOS leader George Karatzaferis for the passage of legislation and
remaining in power. Tzitzikostas and Papadimitriou largely
dismissed attempts by Karatzaferis to cultivate a more moderate
image for his party. Papadimitriou noted that about four of the
LAOS parliamentary deputies were credible politicians, and she
claimed she was attempting to convince them to join ND rather than
allowing LAOS to woo disenchanted conservatives.
--------------------------------------------- ------------------
A Grand Coalition: The Best, But Unlikely Solution
--------------------------------------------- ------------------
11. (C) Papadimitriou described a grand coalition between ND and
PASOK as the best solution for Greek reform efforts. Staikouras
likewise regarded an ND-PASOK coalition as perhaps the best way to
address the economic crisis. Papadimitriou praised the principles
and integrity of both Karamanlis and Papandreou, claiming that
neither of them was personally tainted by the corruption affecting
ND and PASOK. She claimed that such a coalition could insulate
both parties from populist and media attacks, allowing the
government to implement unpopular, but necessary, structural
reforms. Tying it to her scenario for an early parliamentary
election in October, she claimed that if neither major party gained
a parliamentary majority, a coalition between ND and PASOK offered
the best possibility for political stability and reform. She
dismissed public statements by both party leaders opposing such an
option as mere posturing and claimed both Karamanlis and Papandreou
had the nerve and intelligence to consider a grand coalition.
Papadimitriou noted that such a government, which would probably
last no more than a year, should concentrate on four issues:
immigration, education reform, the economic crisis, and culture.
The rest could be left to Brussels.
12. (C) Turning briefly to a discussion of the Ecologist-Green
Party, Papadimitriou described the rise of this party as "proof of
the idiocy of ND." She lamented that her party had so far failed
to capitalize on the growing environmentalist movement by co-opting
some of its issues. At a minimum, she said Karamanlis needed to
create a separate Environment Ministry not tied to Public Works.
She acknowledged that PASOK had done a better job of advocating
"green" policies, but she nonetheless regarded Karamanlis as a more
capable policymaker compared to his Socialist opponent. Having
known Papandreou since he was nine, Papadimitriou largely dismissed
his effectiveness as a leader. "Papandreou is only collecting our
failure," she said.
--------------------------------------------- ---------------
Comment: Positive Words, But Can ND Deliver?
--------------------------------------------- ---------------
13. (C) Comment: Despite the private nature of the
conversations, these MPs tended to echo the party line regarding
the economic crisis and its impact on Greece. Although they
attempted to sound tough on reform, it remains unclear that ND will
have the stomach to force through structural reforms that risk even
more popular discontent among a fickle Greek public with the
numbers of unemployed growing and the prospect of another election
looming ever closer. Moreover, although they appeared to have no
sympathy for Karatzaferis and some ND members who have suggested
cooperation between the two parties, concern that LAOS is cutting
into ND's support among more conservative, nationalist voters could
lead the governing party to seek to blunt LAOS's popularity by
taking tougher stances on nationalist issues. The crackdown on
illegal immigration stems only in part from LAOS's hardline stance
and its subsequent electoral success, since the government's
reaction had been evolving for months. Nevertheless, as ND seeks
to rebuild popular support, Karamanlis might resort to adopting
tougher positions vis-C -vis Turkey and Macedonia to avoid being
further out flanked by the far right. End Comment.
SPECKHARD
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