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Recent news suggested that the current Greek center-left Panhellenic Social Movement (PASOK) government might morph into a national unity government including the main Greek center-right New Democracy Party and possibly several technocratic ministers. Some reports say further that Prime Minister George Papandreou might step down in the process,1 though he announced on Wednesday that he intended to form a new government with him at the head. Whoever heads it, a new broadly based government would be great news both for Greece and for the prospects for another international bailout later this month.
First, this development would mark the end of the partisan phase of the domestic political struggle to reform the Greek economy fundamentally and turn the page on decades of incompetent kleptocratic rule. Hopefully, sufficient pressure will be put on opposition leader Antonis Samaras to end his unwillingness to take part of the political responsibility for the pain that Greece is going through.
Judging from recent elections in Ireland and Portugal, from a narrow political point of view, it makes complete sense for an opposition leader, who basically supports the international bailout and the role of the International Monetary Fund (IMF) in Greece, to refuse to support these measures in parliament. It makes political sense for any opposition to try to avoid the political responsibility for a program of pain inflicted by an incumbent government, while pledging to renegotiate the austerity program imposed by the IMF and the euro area countries. Once elections are held in such situations, voters usually punish the incumbent and the main traditional opposition usually gains power.
As clearly illustrated in Ireland and Portugal, elections in crises-stricken peripheral countries do lead to a change in government. But they do not necessarily lead to a break in the public support for parties that favor cooperation with the IMF or Europe. Despite the occasionally violent demonstrations, radical fringe parties that wanted to ditch the IMF decisively lost recent elections in both Ireland and Portugal. The same trend seems likely in Greece, and correspondingly Samaras and New Democracy could reasonably expect to win fresh Greek elections.
In Greece's current desperate situation, however, there is no time for such distractions as a lengthy election campaign. The economic situation dictates that a "democratic voice" will have to wait a little while longer until the end of the current Greek parliamentary election period in October 2013.
As illustrated in Ireland, too, it should be obvious that the notion that a new Greek government could meaningfully renegotiate the IMF program is not possible. Greece quite literally has no other choice now—if it wants to avoid a catastrophic sovereign default—but to get on with the (IMF) program. A national unity government consisting of the vast majority of current Greek parliamentarians who support the IMF's role in the country is therefore the right answer for Greece, and it has appropriately been called for by European leaders already.
The potential replacement of Papandreou with a technocrat as Greek prime minister (Samaras could not plausibly take over if Papandreou steps down) would in many ways be ill-advised. But it might help a national unity government strengthen the Greek political commitment to its IMF medicine. Greece's international creditors would certainly look favorably on such a development.
A national unity government in Greece would be unambiguously great news for all stakeholders. It is too bad for Greece that its irresponsible opposition does not yet seem ready "to do the right thing."
Notes
1. Elena Becatoros and Derek Gatopoulos,"Greek riots, political chaos hammer markets," Associated Press, June 15, 2011,
