Greece: Election and Aftermath

Greece: Election and Aftermath

Order Code RS20575
Updated June 9, 2000
CRS Report for Congress
Received through the CRS Web
Greece: Election and Aftermath
(name redacted)
Specialist in Middle Eastern Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Prime Minister Simitis of Greece called an early election for April 9, 2000 because
he believed that his government’s achievement in meeting the criteria for entry into the
European Monetary Union (EMU) would return his PanHellenic Socialist Movement
(PASOK) party to power. PASOK’s narrow victory endorsed Simitis’s decision, but the
opposition New Democracy’s (ND) strong showing also validated Costas Karamanlis’s
leadership of that party. The election continued a trend toward bipolarism, as votes for
smaller parties, except for the Communists, declined appreciably. Simitis reappointed
most key members of his previous government, and brought in close allies and
technocrats to carry out a revitalized domestic agenda. In foreign policy, the government
will try to continue the Greek-Turkish rapprochement, to help stabilize the Balkans, and
to move closer to Europe through the EMU and the European Security and Defense
Policy. Greek-U.S. relations are warm, but intermittently troubled by differences over
the future of the former Yugoslavia, terrorism and counterterrorism in Greece, and minor
issues. This report will be updated if developments warrant.
Introduction1
On February 4, 2000, Prime Minister Costas Simitis called an early election for April
9, six months before his government’s term was to expire. On March 9, parliament
reelected President Costas Stephanopoulos and Greece applied for membership in the
European Monetary Union (EMU) single currency zone. Simitis believed that the prospect
of EMU entry and his early support for the popular President would strengthen his
PanHellenic Socialist Movement’s (PASOK) chances with voters, especially contrasted
with the opposition New Democracy’s (ND) delayed decision to support Stephanopoulos.
Victory, however, was more difficult to obtain than the Prime Minister had anticipated.
1 Some analyses in this report are based on meetings with Greek officials, academics, businessmen,
and media during the author’s trip to Greece in January 2000. For background, see also, CRS
Report 96-821, Greece: A New Political Era, by (name redacted).
Congressional Research Service ˜ The Library of Congress

CRS-2
Election
The political spectrum in Greece has narrowed. On the far-left is the Communist
Party of Greece (KKE). On the left is the Coalition of the Left (SIN). The center left is
represented by the PanHellenic Socialist Movement (PASOK), while the center right is
held by the New Democracy party (ND). There also are parties formed by splinters of the
two main contestants: the Democratic Social Movement (DIKKI), which is somewhat to
the left of PASOK, and the Liberal Party, whose policies are essentially identical to ND’s.
Political Spring (PolAn), a nationalist offshoot of ND, did not compete in the election.
The campaign was dull by Greek standards. The most gripping issue involved the
declining stock market,2 prompting ND charges against the government for encouraging
unrealistic expectations by small investors who suffered most and PASOK attacks ND for
manipulating the market by encouraging politically motivated selling. ND argued that the
government’s performance in education, health services, job creation,3 and crime-fighting
was deficient, due to PASOK neglect in its single-minded pursuit of joining the EMU.
However, ND, too, favors EMU membership. PASOK responded with promises of
300,000 jobs, pension and wage increases, and other benefits. The lack of a foreign policy
debate compared to past elections was striking, and may indicate a popular consensus on
foreign issues. Public interest appeared low, but voter turnout was 75%.
Election Results
1996
2000
Party
% of Votes
Seats
% of Votes
Seats
PanHellenic Socialist Movement (PASOK)
41.49
162
43.79
158
New Democracy (ND)
38.12
108
42.76
125*
Communist Party of Greece (KKE)
5.61
11
5.51
11
Coalition of the Left Progress (SIN)
5.12
10
3.19
6
Democratic Social Movement (DIKKI)
4.43
9
2.69
0
* Includes two Liberal Party seats.
The election was a cliffhanger. In the end, the two major parties were separated by
barely 1percent of the popular vote, although PASOK retained a respectable edge in
parliament due to a weighted formula for allocating seats. A trend toward bipolarism,
manifest in previous elections, was reinforced when DIKKI failed to gain the 3% of the
vote required for parliamentary representation, and SIN almost missed the mark. DIKKI
represents PASOK’s mostly discarded, socialist, populist past, while voters seem to prefer
the centrist, pragmatic, modern PASOK. Defectors from DIKKI split between those who
returned to PASOK and others who still resent the changes Simitis had made in PASOK
and, paradoxically, chose ND. SIN, on the other hand, had so changed its views that they
had become almost the same as PASOK’s; voters agreeing with SIN, therefore, might as
2 Overall, the market dropped approximately 30% between September 1999 and the election.
3 The unemployment rate for 1999 was 11.7%.

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well vote for PASOK.4 Of the small parties, only the KKE retained its hard core of true
believers.
Voters who wanted a change from PASOK and felt that 17 out of the last 20 years
was long enough for it to have been in power chose ND. The 43-year-old ND leader
Costas Karamanlis, who has never served in government, has moved his party toward the
center. ND’s views on many issues are similar to those of PASOK, although ND would
reduce the role of the state in more sectors and more sharply than the ruling party and
sometimes voices strident nationalism.
Political Impact
Simitis has been personally credited with PASOK’s victory, and it appears to have
strengthened his position within the party. Simitis’s two main internal party challengers
from 1996 no longer challenge him. Minister of Defense Akis Tsohatzopoulos has been
loyal to the Prime Minister, voicing discreet criticism on rare occasions. Former Education
Minister Yerasimos Arsenis lost popularity attempting reforms in that troubled sector and
is not in the new government. Pretenders to the leadership after Simitis include
Tsohatzopoulos, Minister of Foreign Affairs George Papandreou, and Minister of Interior
Vasso Papandreou, and all fared well in the polls. But Simitis has no current rivals.
On the other side, ND’s strong showing and gains endorsed Karamanlis’s leadership
and style, and may have strengthened his position within his party. His potential
challengers include Dora Bakoyianni, daughter of former Prime Minister Costas Mitsotakis
and shadow foreign and defense minister, and the ambitious and popular mayor of Athens
Dimitris Avramopoulos, who refused to rejoin ND for the election. Liberal Party leader
Stephanos Manos had formed an electoral alliance with ND, but opted to remain
independent in parliament. In May, Karamanlis may have squandered some hard-won
political capital and sparked party division by unilaterally purging a rightist ND member,
mainly for insulting ND spokesman and Karamanlis ally Aris Spiliotopoulos.
The fate of SIN is uncertain. PASOK probably will continue to try to attract SIN
followers, and the KKE may do the same. The KKE base is as constant as its opposition
to Greece’s membership in the EU and NATO. The party is likely to remain troublesome,
mobilizing street demonstrations and having an impact greatly disproportionate to its
electoral strength. It is the main voice of anti-Americanism, and led opposition to the
NATO campaign against Yugoslavia and to President Clinton’s November 1999 visit to
Greece.
Government Appointees and Program
Simitis has retained his “heirs apparent” in their same powerful positions: Foreign
Minister Papandreou, Defense Minister Tsohatzopoulos, Interior Minister Papandreou,
and Finance Minister Yannos Papantoniou. The major cabinet change and political shock
is the absence of the brilliant, ambitious, and outspoken, former Minister of Development
4 Some SIN politicians appear to agree. A former SIN leader was PASOK’s candidate for mayor
of Athens in the last regional elections, and SIN defectors were included on PASOK’s
parliamentary lists.

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Evangelos Venizelos, who rejected the Ministry of Justice because it lacks a high profile
regarding issues of public interest. Simitis brought back the equally outspoken former
Foreign Minister Theodoros Pangalos, who had resigned in February 1999 over the Ocalan
fiasco5 and became a party gadfly. Pangalos is now Culture Minister. Simitis also placed
close allies and technocrats in other posts essential to fulfilling his election promises,
notably the Ministries of Labor, Health, Education, Development, and Transport. The
Prime Minister has personally assumed responsibility for shaping up Greece’s lagging
preparations for the 2004 Olympics, an issue of national honor.
The last Simitis government6 had a remarkable record of economic achievement in
meeting the EMU convergence criteria.7 It cut inflation from double digits and reined in
deficit spending. The new government faces public expectations that it will address a
domestic agenda on health, education, employment, and social security reform. It must
also work to ensure that the Olympics are successful. All these programs require heavy
public spending. At the same time, however, Greece will be constrained by the EMU
criteria, even after it enters the EMU in January 2001. Public debt is already 104% of
gross domestic product and Simitis promised tax cuts not rises, which eliminate borrowing
and taxes as sources of funds. The government hopes to find resources in economic
growth, European Union funding, a budget surplus, and revenue from the privatization of
state power, telecommunications, and other enterprises and banks. Unions, socialist
stalwarts, and communists will likely oppose each offering. Simitis faced down opponents
in his first term and will likely have to do so again.
Foreign Policy, Including Relations with the United States
Turkey. Foreign Minister Papandreou has pursued a rapprochement with Turkey,
Greece’s traditional rival. Popular goodwill has supported this initiative. In December
1999, Greece chose not to oppose a European Union (EU) decision to affirm Turkey’s
candidacy for membership. Greece and Turkey subsequently aided each other during
devastating earthquakes in summer 1999. They cooperate in the Balkans and have reached
agreement on nine so-called “lesser” subjects, such as environmental cooperation,
maritime safety and educational exchanges. Business ties are flourishing. In early June
2000, Greece and Turkey successfully participated with 10 other countries in NATO’s
“Dynamic Mix” exercise in northern Greece and the Aegean, with Turkish troops landing
on Greek soil for the first time. However, the two governments have deferred discussion
of Aegean sovereignty and Cyprus – issues at the crux of their antagonism. Greeks
5 The Greek Embassy in Kenya gave safe haven to Abdullah Ocalan, the leader of the Kurdistan
Workers Party (PKK) terrorist group. Turkish agents seized Ocalan as he was en route to the
airport in Nairobi.
6 Simitis first became Prime Minister in January 1996, when Andreas Papandreou resigned the post
due to ill-health, and took the country to elections in September 1996.
7 These include: average inflation rate for one year no greater than 1.5% above that of the three
European Union members with the lowest inflation rate; stable currency exchange rate not
devalued against another EU currency for two years; a non-excessive budget deficit, using
reference values set at 3% of gross domestic product and government debt at 60% of GDP;
average long-term interest rate no more than 2% above the three best EU inflation performers for
one year. See, CRS Report RL30107, European Monetary Union and the United States: An
Overview, by Arlene Wilson.

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generally are troubled by what they consider Turkey’s obstinacy on these matters, and
some Greek commentators are annoyed by the lack of a Turkish “gesture” to reciprocate
Greece’s EU decision. They have suggested that a suitable act might be the reopening of
the Greek Orthodox seminary on the island of Halki or rescinding the “casus belli.”8 (The
latter refers to Turkey’s 1994 decision to go to war should Greece claim a territorial sea
of 12 nautical miles in the Aegean. Turkey contends that an extension of Greece’s
territorial waters from six to 12 miles would transform the Aegean into a “Greek lake.”)
Greek officials themselves rarely seek a Turkish “gesture,” and say that Turkey’s
conformity to EU membership criteria and international legal standards over time will lead
to the resolution of major bilateral issues. It is uncertain, however, how long the patience
of public opinion molders and the public will last.
Balkans. Greece aims to play a pivotal role in promoting Balkan stability through
economic development and democratization. In 1999, the government committed $320
million for reconstruction efforts in southeast Europe. Greek businesses are major
investors in the Balkan countries and the government encourages their expansion
throughout the region.
Greece has good relations with its Balkan neighbors. It is trying to compromise with
the Former Yugoslav Republic of Macedonia (FYROM) in an ongoing dispute over the
FYROM’s name, which stems partly from the fact that Macedonia also is the name of a
northern Greek province. The dispute has been superseded by marked advances in trade
and investment since a 1995 compromise accord on related issues normalized relations.
Meanwhile, Athens is attempting to distance itself from the Milosevic regime in Belgrade
and, in a move that is controversial at home, has reached out to Milosevic’s domestic
political opponents. Greece has cordial ties with Albania despite anxiety that the unsettled
situation in Kosovo could lead to a Greater Albania.9 Greece insists on the inviolability of
borders in the region, and may be greatly concerned should trends toward the
independence of Kosovo or Montenegro accelerate. Greek troops are serving in Bosnia,
Albania, and in the U.S. sector in Kosovo. Greece is a member of the Southeast Europe
Brigade (SEEBRIG) seven–nation regional task force10 and of the Southeast European
Cooperation Initiative (SECI) that seeks to normalize regional trade.

Europe. The Simitis government maintains that Greece’s expected entry into the
EMU next January and role in an evolving European Security and Defense Policy are key
to bringing it to the center of European Union decision-making. Greece’s orientation will
become ever more focused on Brussels as integration within the EU deepens.
8 Turkish officials have not indicated willingness to make a “gesture.” Some believe that Turkey
had made one when it stopped blaming Greece for its role in the Ocalan affair, and observe that
Greece never apologized. Others argue that Greece had no choice in December 1999 but to go
along with the will of the EU majority on Turkey’s candidacy. Still others remark that the
rapprochement has been reciprocal, noting Turkish Foreign Minister Ismail Cem’s actions and
Turkey’s signature on agreements alongside that of Greece. Some Turks want to reopen Halki for
reasons unrelated to Greece’s EU vote, but see obstacles caused by disparate governing coalition
partners and parliament.
9 See CRS Report RS20149, Kosovo: Greek and Turkish Perspectives, by (name redacted).
10 Greece, Turkey, Italy, Albania, FYROM, Bulgaria, Romania.

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United States. U.S.-Greek relations are good. Greece is a NATO ally. The United
States was concerned about but understanding of Greece’s reaction to the Kosovo
conflict, when the Greek government did not oppose or participate in NATO’s action and
the Greek public overwhelming disapproved of the campaign. The U.S. and Greece now
share a common interest in Balkan stability and democratization as well as in improving
Greek-Turkish relations. Greece last received U.S. military aid in FY1997 and has
diversified its arms purchases, but remains a major market for U.S. weapons. In 1999,
Athens decided to purchase Patriot anti-missile missiles for $1.2 billion and 50 F-16 fighter
aircraft, with an option to purchase 10 more, for more than $2 billion. U.S. companies are
major investors in Greece and bilateral trade is growing, with the balance favoring the
United States.11
Difficulties in the relationship are few, but irritating. U.S. officials have repeatedly
criticized Greece for its failure to counter terrorism.12 More anti-American terrorist
incidents occurred in Greece than elsewhere in Europe in 1999. Most were bombings or
threats against U.S. government and private interests. The Revolutionary Organization
17 November is believed to be the main perpetrator. The U.S. State Department reported
that terrorists act in Greece “with impunity” as no terrorists have been arrested, convicted,
or sentenced, and plans for modernization of counterterrorism police have not been
implemented. The Congressionally-mandated National Commission on Terrorism
recommended that the Department consider putting Greece into the “not fully
cooperating” category of countries and imposing stringent sanctions as an incentive to
improve its inadequate responses to terrorism. (The Administration said that it is not
considering sanctions.) The Greek government views the U.S. assessment as unfair, and
some Greeks suggest that fulfilling U.S. demands would infringe on Greek sovereignty.
A somewhat related issue involves Greece’s ineligibility for the U.S. visa waiver
program.13 Greece does not meet requirements for machine-readability of passports, and
perhaps compromises U.S. law enforcement interests because of its poor performance in
counterterrorism and border controls. Twenty-nine countries, including all other EU
members, participate in the program and some in Greece question its continuing exclusion.
Periodically, Greek violations of U.S. intellectual property rights also surface as a bilateral
issue.
For its part, Greece seeks to have the United States play a more assertive role in
resolving the Cyprus issue, by pressuring Turkey to compromise and to prevail upon the
Turkish Cypriots to do the same. Greek accusations that Washington values its
relationship with Ankara more than its ties with Athens, however, have become less
common.
11 In 1999, Greece exported $350 million in goods to the U.S. and imported $640.5 million in goods
from the United States. U.S. State Department, Bureau of Economic and Business Affairs,
Country Report on Economic and Trade Practices, Greece, 1999, March 2000.
12 See, U.S. Department of State, Office of the Coordinator for Counterterrorism, Patterns of
Global Terrorism, 1999, released April 2000, and the National Commission on Terrorism,
Countering the Changing Threat of International Terrorism, released June 5, 2000.
13 For background, see CRS Report RS20546, Immigration: Proposals to Reauthorize and Make
Permanent the Visa Waiver Pilot Program, by (name redacted).

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