Forum Nexus International IQ News and Analysis – Update December 15th, 2008

International IQ Update – Country in the News: GREECE

The violent riots in Greece have erupted as a result of anatmosphere of high unemployment, frustration and hopelessness, especially among the youth. The very same symptoms are present in Spain, France, Italy and elsewhere in Europe. With the worsening global economic crisis and the resulting rise in unemployment, the likelihood of “contagion” of violent street protests throughout Europe is actually quite high.

Recent developments:

Daily violent street riots in Athens and other cities since the December 6 killing of a teenager by police

On the night of December 6, in the Athens neighborhood of Exarchia, known as a center of anti-establishment and anarchist activities, two policemen on patrol were taunted and insulted by a group of teenagers. In the confrontation that ensued, a 15-year old was shot dead by police.

Public reaction:

There has been a very angry and violent reaction on a daily basis all over the country. Peaceful street demonstrations deteriorate into violent riots, with firebomb attacks on cars, shops, banks and police stations, causing substantial property damage without any significant intervention by police.

Questions:

Why so much anger? Why violence? Why are the police so passive? What are the political and economic implications?

Analysis:

• Greek society is still strongly affected by memories of the police and army brutality of the military junta that governed from 1967 to 1974, and violently crushed a student uprising on November 17, 1973 (in the Exarchia neighborhood).
• The current Prime Minister, Kostas Karamanlis, of the center-right New Democracy party, was elected in March 2004, 5 months before the Athens Olympic Games.
• The successful and well-organized Olympics restored a sense of pride and optimism. The return to power of the New Democracy party, after two decades of dominance by the social-democratic PASOK party, raised expectations of improved economic conditions and implementation of needed structural reforms (in the education system, the pension system, etc.)
• Karamanlis managed to narrowly win re-election in 2007, but all-in-all the results of his administration have been very disappointing. The economy has stagnated and unemployment has increased especially among the youth. The country has been plagued by several serious corruption scandals involving land swaps and pension funds. The administration is widely accused of having mismanaged the handling of the out of control forest fires in the summer of 2007. The promised reforms never materialized.
• The police shooting on December 6 was the detonator of the widespread malaise and discontent.
• The majority of the population, however, does not support violence. The violent turn of the street demonstrations are due to small groups of well-organized anti-establishment anarchists, bent on creating chaos by attacking the symbols of “the corporate machine”.
• The police have been disconcertingly passive by staying on the sidelines and allowing the violent rampages to proceed unimpeded. This is due to a deliberate government policy of maintaining a low police profile in an attempt to avoid further mayhem.
• However, this approach appears to have backfired. Adding to the economic insecurity and the mistrust of corrupt politicians, now many people feel unsafe and physically insecure and don’t trust that the police will protect them.
• The political implications may be quite serious for the Karamanlis administration. Its popularity is plummeting and the odds are increasing of a return to power of the opposition PASOK party.
• The economic outlook is quite bleak. The turmoil is happening in the middle of a severe world-wide economic contraction. The reputation of Greece as a quiet, safe and friendly destination has been tainted with possible short-term impacts on tourism and foreign direct investment.
• The atmosphere of frustration and hopelessness that prevails in some segments of Greek society, especially the youth, is also present in several other European countries, such as Spain, France and Italy. There has already been some evidence of “contagion” with several small but violent protests taking place across Europe. With the worsening of the economic crisis and the anticipated increase in unemployment, it is possible that this worrisome trend might intensify.