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Greece PASOK's Second Term, 1985-89
Sources: The Library of Congress Country Studies; CIA World Factbook
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    Sensing public disenchantment, PASOK abandoned the slogan of change and mounted a largely negative electoral campaign, arguing that it needed more time to implement its program and raising the specter of a return to power of a vengeful right. This strategy worked extremely well. In spite of an aggressive and massive campaign effort by ND, in 1985 PASOK obtained 46 percent of the vote--a drop of just over 2 percent from 1981--and a comfortable parliamentary majority with 161 Assembly seats. ND increased its 1981 share of the vote by 5 percent and its parliamentary representation by thirteen seats. ND claimed these figures gave the party a moral victory, but the election was nevertheless a bitter disappointment. The negative campaign tactics appeared to have been particularly effective in some key major city districts in Athens and Thessaloniki, where communist voters apparently abandoned their party to vote for PASOK, averting a victory by the conservatives.

    In October 1985, just five months after the elections in which he had promised better days to come, Prime Minister Papandreou abruptly changed course. Alarmed by skyrocketing deficits, public debt, and inflation and seeking to satisfy the European Community (EC) conditions for low-cost loans to Greece, he announced an austerity program under the direction of Konstantinos Simitis, a former minister of agriculture whom Papandreou's had appointed minister of the national economy. In the painful two-year period that followed, some confidence was restored in the Greek economy at the cost of a rapid devaluation of the drachma (for the value of the drachma--see Glossary); significant reductions in public borrowing, consumer demand, and industrial production; and a fall in real wages of almost 12 percent (see The Structure of Employment; Wages, Prices, and Inflation , ch. 3).

    The austerity program also cost PASOK considerable popularity. Especially alarming for Papandreou were the local elections of 1986, in which ND scored large gains in communities throughout the country and, more important psychologically, managed to elect mayors in the two largest cities of Greece--Athens and Thessaloniki--as well as Piraeus. In mid-1987, Papandreou unceremoniously dismissed Simitis and, with national elections looming, the austerity policies were abandoned. PASOK resumed its strategy of seeking public approval by public-sector hiring, which reached massive proportions in the months before the 1989 election. In the same period, public borrowing increased from 13.5 percent of the gross national product (GNP--see Glossary) in 1987 to 21.8 percent in 1989.

    Data as of December 1994

    NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece PASOK's Second Term, 1985-89 information contained here. All suggestions for corrections of any errors about Greece PASOK's Second Term, 1985-89 should be addressed to the Library of Congress and the CIA.

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