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The backlash over the government’s shutdown of state broadcaster ERT may help bring down a ruling coalition that had promised to turn the country’s fortunes around.
ATHENS, Greece — Just as this crisis-stricken country appeared to be turning around, Antonis Samaras shot himself in the foot.
Determined to re-invent his cash-strapped, chaotic country — the first domino to fall in Europe’s festering debt crisis — the business-minded conservative leader stumbled by taking an axe to Greece’s state broadcaster ERT this week, sacking all its 2656 employees.
News presenters were cut off mid-sentence, journalists dragged off air and the network’s transmitters swiftly deactivated, leaving millions of television screens black and radio signals silent.
Ostensibly, the closure was aimed at stemming the flow of taxpayers’ money into a network of what the government called “waste and corruption — all scandalously operated for decades.”
The shutdown was meant to help keep the economy afloat by securing continued funding from the country’s international lenders. Representatives of the so-called troika — the International Monetary Fund, the European Commission and the European Central Bank — arrived in Athens to conduct an audit this week.
Samaras’s bold move was directed at reassuring them that lagging attempts to fulfill the government’s promise to shed 15,000 public-sector employees by the end of 2014 in return for loans were finally kicking in.
He may have overplayed his hand.
Thousands protested and unions staged a general strike in support.
The fragile ruling coalition wobbled when the two junior members, the socialist Pasok and Democratic Left parties considered protesting the shutdown, the biggest disagreement in the year since the prime minister stitched together the alliance.
A surprising amount had been achieved since then. Fiscal deadlines are finally being met, and a small but significant budget surplus of about 0.5 percent of the country’s GDP is anticipated by the end of the year.
The threat of a calamitous Greek exit from the 17-member euro zone has largely receded.
Hedge funds are buying up Greek bonds, and millions of euros — either illegally stashed in foreign accounts or under mattresses amid fears of a chaotic return to the Greek drachma — are now finally being restored to the economy.
Political stability has also returned, something few expected after three changes of government in four years.
Ongoing protests against austerity and other government policies may be a daily affair in Athens, but violent streets confrontations have faded.
For the most part, the unpretentious Samaras has been able to carefully control his awkward political alliance. Although fraught with friction, the three-party coalition has overcome frequent policy hitches since joining forces to steer the country toward financial recovery.
Nevertheless, its unity has been threatened before. Disagreement over anti-racism snowballed into disarray last month when the two minority partners broke ranks with the prime minister for the first time. Since then, the gap has widened with every new snafu and poll showing Samaras’ popularity growing as his partners’ political fortunes weaken.
A nationwide survey just ahead of the ERT shutdown showed conservatives commanding a third of the nation’s vote while Pasok — which dominated Greek politics for nearly two decades with at least 40 percent of the vote — plunged to 6.4 percent. The Democratic Left stood at a stable 6.2 percent.
“It seems that with every uptick in his popularity, Samaras has grown not only more confident but cocky against his government allies, pushing them into corner like cats,” political strategist John Loulis says.
That may threaten the coalition in the future.
“They didn’t react much in the first couple of run-ins,” he adds, “but their claws are now out and that could easily escalate into a breakdown of the coalition.”
“If a compromise isn’t reached soon,” Loulis says, “the political crisis may spark early elections, and that would prove a monstrous failure and catastrophe for Greece.”
Locked out of international markets and well into the throes of its worst financial crisis since World War II, the Greek economy has been shrinking for six consecutive years, wiping out a decade of growth with no end in sight.
To defuse the latest crisis, Samaras has called for a meeting with the socialist leader Evangelos Venizelos and Democratic Left head Fotis Kouvelis on Monday.
Senior government officials suggest significant scope for compromise. Still, they say the likelihood of reversing the ERT shutdown is “next to zero.”
The stakes are high.
Even if it reaches compromise, the coalition will have been seriously scarred, putting the fate of fiscal reforms and Greece’s recovery back into doubt.
Just last week, the emerging market index MSCI downgraded Greece after its stock market plunged 90 percent since the start of the financial crisis here in late 2009.
Even worse, the government’s already troubled privatization program suffered its worst-ever setback earlier this month after a bid to sell off the country’s natural gas company to Russia’s Gazprom floundered.
Failure to woo the Russians back into the bidding process or attract a new investor could spell even more budget cuts for crisis-wary Greeks already reeling from three years of austerity that has squeezed incomes by an average of 25 percent and upped unemployment to a record of more than 27 percent.
Poverty has become widespread and the suicide rate has doubled in the last three years.
For a nation wary about the prospect of a revolution, there’s a strong whiff of cordite in the air.
Some 83 percent of Greeks fear a “social explosion” in the coming months, according to one poll. Whether striking ERT employees and labor unions provide the tinder remains unsure.
“What’s certain,” Loulis says, “is that this is the most defining moment of crisis-hit Greece” — yet.