The former Greek Prime Minister, PASOK’s Costas Simitis, is rapidly emerging, in the light of hindsight, as the man who took Greece into the 21st century with his bold embracement of the Euro and with his unbridled commitment to the economic modernization of Greece.

The popular Karamanlis, who still leads the personal popularity opinion polls (though PASOK is surging ahead, by seven percentage points,  as the preferred ruling party in the latest opinion polls), along with his photogenic wife, appears to be running out of luck.

Simitis, an economic technocrat who paid attention to detail, is seeing his infrastructure gains being squandered by Karamanlis, who is likely to lose the next election as the “official” unemployment rate soars to 9.4% while government predictions of positive economic growth, as opposed to retraction or recession, appear delusional.

Finance Minister, Mr Yiannis Papathanasiou, repeatedly expounds his view that economic growth will occur during 2009, if only at the modest rate of 1%.  

This repeated assertion is one of a number of arsenals that Papandreou will utilize in his attempt to finally oust New Democracy at the next elections.

Greece had previously enjoyed a decade and a half of annual economic growth at the 4% rate, much of it under Costas Simitis, a gifted economic technocrat.

Just as John Howard lost the 2007 Australian Federal election by his excessive deregulation of the labour market – which the Rudd Government will eventually find, much to its economic chagrin, that it has excessively wound back due to the luddite lobbying of the union movement – Karamanlis is losing much of his core constituency of small business owners and proprietors, ranging from factory operators to small and mid-size retailers, simply because he has displayed an inability to guarantee and maintain law and order, after a winter and autumn of mayhem on the streets.

Meanwhile, the Turkish Government has wisened up to the economic benefits of having a strong tourism trade and the “jet-set” are taking full-advantage of the Turkish currency – the declining British pound making it an attractive option for British tourists in particular – by increasing bookings to Turkey while Greek island holiday proprietors are bracing themselves for a reduction in bookings in the order of up to 15%.

Economic problems abound; European Economic Community auditors are furious with the Greek government’s inability to maintain its budget within its statutory ceiling of three percent while Papandreou, in similar fashion to President Barack Obama, will likely  inherit a public spending debt equivalent to 94% of the Gross Domestic Product.

While the government is likely to survive the current Pavlidis scandal, the unending accumulation of government scandals is clearly exhausting for Mr Karamanlis himself.

Greece’s former Director of Competition and Regulation has been found guilty of bribery – and the still-remaining possibility, albeit a remote one,  that Pavlidis will be indicted over an alleged shipping route bribe allegation – are events that do not augur well for the New Democracy government.

Papandreou will need to utilize all  his skills to restore economic stability and he will need an iron fist to restore the rule of law to protect Greece’s economic infrastructure and businesses from marauding anarchists.

He may not be popular, but Papandreou has the stamina to surpass a tired Karamanlis whose government appears to have no coherent policies with regards to economic stability and social cohesion.

Theo Giantsos is a regular contributor to NKEE