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Greece The ND Returns to Power
Sources: The Library of Congress Country Studies; CIA World Factbook
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    The election of 1990 finally produced the parliamentary majority (a bare 152 seats) that Mitsotakis had been seeking since 1984. After nine years, the ND had regained sole power; Mitsotakis then served as prime minister for the next three and one half years, through October 1993.

    The second major political event of 1990 was the Assembly's election, with the concurrence of PASOK, of Konstantinos Karamanlis to his second term as president. Coming five years after Papandreou had unexpectedly denied Karamanlis a second term in the presidency, this event was viewed as a vindication of Karamanlis and the capstone of a long and distinguished political career.

    The new ND government promptly presented a medium-term economic recovery program designed to cut inflation (which had again reached 20 percent per year) by more than half (the target was 9.9 percent by the end of 1993), to reduce state expenditures and public employment, and to increase revenues by a variety of means including a crackdown on tax evasion, the privatization of many government-owned companies, and the sale of public land.

    The EC strongly endorsed this program as a step toward stabilization of the national economy. However, indecisiveness and internal disagreements within ND hampered implementation in the government's first two years. Government policy was pulled in opposite directions: free-market advocates wanted to move rapidly toward reducing the overwhelming dominance of the public sector in the country's economy, whereas a more moderate group argued for more cautious reform of the state system in order to preserve the social safety net.

    In practice, both factions of ND were usually overcome by large numbers of populists who simply wanted to enjoy the spoils of victory after nine years in opposition and to share their wealth with loyal party supporters. Thus, despite preelection promises to freeze appointments to the civil service and to public-sector companies, ND contradicted its own economic recovery program by adding considerable numbers of its own supporters to patronage appointments. Clientelism and patronage became as integral to this "reform period" as it had been under the second PASOK administration of 1985-89.

    The early 1990s also saw the continuation of trials of PASOK figures on corruption and other charges. By far the most important of these procedures was the special court trial of Papandreou and three top associates for involvement in the Koskotas affair. The trial, which lasted several months, was followed eagerly by Greek television viewers. The chaos of that trial was a public demonstration that the politicized Greek judicial system was incapable of dealing effectively with cases involving malfeasance by elected officials. Neither the government nor the judiciary attempted to bring Papandreou personally before the court, and Koskotas, the state's star witness, produced none of the evidence he claimed to have against Papandreou. The trial ended with Papandreou's acquittal by a narrow margin. After the Koskotas trial turned into a public relations disaster, the ND government retreated and canceled Papandreou's wiretapping trial.

    The threat of privatization and ND's austerity program triggered waves of strikes by public employee unions in 1991 and 1992. Particularly aggressive were the employees of the Public Power Corporation (Dimosia Epicheirisi Ilektrismou--DEI), who disrupted the electricity supply, and those of the Urban Transportation Company of the Athens region, who engaged in violence against nonstriking fellow employees. Although the public showed little sympathy for the strikers, the government responded quite passively to their activities.

    In 1991 the disarray in the ND government was partly corrected by the appointment of Stefanos Manos as minister of national economy. Under Manos, free-market advocates gained control of the ND's economic policies. A new austerity program was announced, together with an aggressive privatization program centered on the sale of most of the state-owned Greek Telecommunications Organization (OTE--Organismos Tilepikoinonion Ellados) to private investors (see Transportation and Telecommunications , ch. 3). Manos pursued these plans assiduously throughout the remainder of ND's term in office, but he achieved very few of his ambitious goals. Manos was stymied by governmental ineffectiveness, dissension in ND ranks, and the premature collapse of the Mitsotakis government. The austerity program, which seemed to penalize wage earners most heavily, was also very unpopular and certainly contributed to the heavy losses that the ND suffered in the 1993 national elections.

    Paralleling PASOK's embarrassments in 1989, the Mitsotakis administration also fell prey to allegations of scandal and corruption. Prominent among them was the affair of Heracles General, a large Greek cement company sold to the Italian Ferruzzi conglomerate, which in 1993 was implicated heavily in the government corruption scandals of Italy. Mitsotakis, his daughter, and a close military associate were accused of illegally wiretapping political opponents. In August 1994, the cement company affair and the wiretapping case were both under investigation by special parliamentary committees and by judicial authorities.

    As a result of all these difficulties, the ND government was staggering by the end of its third year in office, and Papandreou was calling for new elections. The downfall of the government, however, was the festering feud between Mitsotakis and Antonis Samaras, who had been the first minister of foreign affairs in the Mitsotakis administration. Samaras had been forced to resign his post because of his radical nationalist position on the Macedonia issue (see The Balkans , this ch.). Then, in June 1993, he announced the establishment of a new party, Political Spring (Politiki Anixi- -PA). About three months later, a Samaras ally in the Assembly withdrew his support of the government, ending the ND's tiny majority and forcing new elections in October 1993.

    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 The ND Returns to Power information contained here. All suggestions for corrections of any errors about Greece The ND Returns to Power should be addressed to the Library of Congress and the CIA.

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