Pyrrhic Victory Costs Greek Government

ATHENS – A smiling Greek Prime Minister Antonis Samaras – with his delighted Finance Minister Yannis Stournaras beaming by his side, rejoiced when the Parliament on Dec. 21 produced twin wins for his shaky coalition government: approving a new unified property tax that hits farmers, and allowing banks to start confiscating the homes of many Greeks who can’t pay their mortgages because of austerity measures they have both supported.

But it came at the cost of seeing the razor-thin majority that Samaras’ New Democracy Conservatives and his partner, the PASOK Socialists had cut from four to three seats in the 300-member Parliament. The measures got 152 votes, with one New Democracy rebel, Vyron Polydoras voting no,  and a PASOK lawmaker, Apostolos Kaklamanis absent, saying he was ill. Twenty-three MPs didn’t vote.

That could weaken the government, especially with the major opposition party Coalition of the Radical Left (SYRIZA) already widening its lead over New Democracy in a new poll – taken before the votes that even many ruling party lawmakers said would further enrage the populace and likely undercut their strength.

Samaras immediately ejected a long-time New Democracy stalwart, former public order minister Vyron Polydoras, for voting against the measures. Greek lawmakers are told by their political leaders how to vote, effectively nullifying any sense of democracy, and are routinely booted from their parties if they disobey.

“What sort of policy is this when you put a knife on homeowners’ throats? Do you expect me to vote in favor of this?,” he told the Parliament about the new tax that is aiming to raise 2.5 billion euros ($3.41 billion) but which sparked furious, and violent protests by farmers.

Samaras’ office hit back. “At a time when the government is successfully trying to get Greece out of the economic crisis, Mr. Polydoras has consciously chosen to oppose these efforts and his party and to identify with the anti-Europeans, the populists, the supporters of the drachma and those who deny the national effort to save the country,” the conservative party said in a statement.

The other measure – which, like the tax, was demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) in return for the remainder of $325 billion in two bailouts – means only households with values up to 200,000 euros ($270,000) and where family income is under 35,000 euros ($47,850) will be saved from seizure, but only for one year.

SYRIZA said the government was disguising its plans to let banks in 2015 take all homes where mortgages are in default, some 90-95 percent of them estimated to be legitimate inability to pay because people have been hit with big pay cuts, tax hikes and slashed pensions by successive governments. Stournaras was staunchly in favor of the foreclosures.

Since the 2012 second elections, which New Democracy won but without enough of the vote, requiring Samaras to form a coalition with PASOK and the Democratic Left (DIMAR) – which quit this fall after objecting to the firing of all 2,653 workers at the national broadcaster which Samaras shut down, the coalition has seen its seats in Parliament dwindle from 179 to 153.

Samaras has lost three MPS and the party is now down to 126, while PASOK has lost six and has only 27 left in Parliament.

Samaras now will have to see if social unrest gets ramped up again, especially if there is a wave of foreclosures and families being put on the street as even the IMF’s envoy in Athens, Poul Thomsen, has warned, advising the government to set up alternative housing.

The Troika insisted on the the new tax and foreclosures before agreeing to the next installment that was due this month, of 4.9 billion euros ($6.69 billion.) The envoys aren’t due to return now until next month, by which time there may be some evidence of how the taxes and foreclosures sit with the voters.

Samaras and Stournaras argued that the measures – as they said all others have been – were necessary to save the economy from collapse, but the votes came amid a report that the government has failed to go after people involved in scandals who owe 2.5 billion euros – the same amount that will be raised by the new property tax.

Polydoras’s vote was not the only unexpected incident. Many governmental lawmakers were outraged and attacked Finance Minister Yiannis Stournaras because at the last minute he attached irrelevant articles of law on the multi-tax bill, Market News International reported.

One of the articles increased fines in tax payment delays, including Value Added Tax (VAT) to 30%. The Finance Minister made minor corrections by it most cases, the 30% fine remained. Despite their objections, all the ruling parties lawmakers did as they were told and voted for the measures, except for Polydoras, who remains in the Parliament as unaffiliated and free to vote as he wants.

Greece will undertake the six-month rotating presidency of the European Union in January and while Samaras appeared confident that he will run a successful term, it could be difficult for him to retain a parliamentary majority at home as more, tougher laws are expected to be tabled for approval in the next few months.