Media’s Contribution to the Changing Political Landscape and Rise of Ideological Extremism in Greece Yiannis Mallios

Political System of Greece Parliamentary Republic ▫Prime Minister – Head of Government ▫President – Head of State ▫Ministerial Council ▫Legislative parliament (300 MPs) Hellenic Parliament (Βουλή των Ελλήνων) in the Old Royal Palace in Syntagma Square

Electoral Process for National Elections 56 Electoral Districts Mixed system ▫Multi-member districts awarded proportionally (250 seats). ▫Winning party awarded bonus (50 seats)  Creates Majoritarian structure Map of Greece’s Administrative Districts

Late 20 th and Early 21 st Century Political History: Two Party Dominance New Democracy, N.D. (Νέα Δημοκρατία) ▫Centre-right, conservative ▫Established by Konstantinos Karamanlis in 1974 ▫Formed first democratic government after the collapse of the military junta ▫Economic liberalization  Lower taxes  Privatization of state assets  Pro-Europe

Late 20 th and Early 21 st Century Political History: Two Party Dominance PASOK, Panhellenic Socialist Movement (ΠΑΣΟΚ) ▫Centre-left, Social democratic ▫Created in 1974 by Andreas Papandreou ▫Transitioned to moderate-left since its inception as a Marxist modeled radical party ▫Social populism  Public welfare  State market interventionism/Social corporatism  Income parity  Pro-Europe

National Election Results since 1974 (Winning Parties) 1974 – N.D – N.D – PASOK 1985 – PASOK 1989 – N.D – N.D – PASOK 1996 – PASOK 2000 – PASOK 2004 – N.D 2007 – N.D – PASOK 2012 – N.D Syriza

Parties in Government since 1974 ▫The chart depicts the parties that have formed a single party simple majority government or participated in a coalition government since 1974.

Era of Recession and Austerity in Greece Greece, and the Euro Area as a whole, begin experiencing an economic recession in ▫Primary reasons for economic depression in Greece:  Careless government spending and borrowing, tax evasion, high debt to GDP ratio, corruption, falsified financial figures, etc. ▫Principal consequences of the debt crisis:  Highest unemployment in Europe (second among youth), reduction in social welfare programs, decrease in national personal income, increased poverty, “brain drain,” etc.

The Greek Recession in Numbers

The Escalation of “Grexit” fears During the onset of the recession, global and national fear of a Greek default and Euro exit remained low. ▫Although a report issued by Greece’s government in October 2009 significantly altered public deficit estimates for ‘09 & ‘10’, “the risk premium for Greek debt” remained constant for several weeks when compared to German bonds, contrary to economic logic. After interest rates on Greek bonds increased in November, although later than expected, no new significant negative data was released on Greece’s debt repayment capabilities. ▫However, in the following five months, the top three credit rating agencies downgraded Greece’s score more than once.

The Role of Media Bias in Fueling the Crisis A study published by the political-economic analyst Sonja Juko provides empirical evidence that suggests a correlation between media coverage and the deterioration of the Greek crisis. ▫Juko argues that “ financial media organizations, being driven by commercial interests, have strong incentives to give market experts a platform to make their views known to financial market participants.”  Consequently, financial analysts are likely to make assertions that support their company’s investment portfolio and interests (i.e. media bias).  As a result, financial institutions leverage the news to influence investors’ interpretation of the bond market.  For example, after the CEO of Deutsche Bank declared in an interview on May 13, 2010, that Greece would likely not repay its debt commitments, interests on 10 yr Greek bonds increased by 40 points the next day.

The Influence of Media Coverage on the Greek Bond Market

Media Inspired Political Backlash In addition to generating financial concern over the Greek economic crisis, the media also produced social-political implications both domestically and abroad. ▫Globally, Greeks were labelled with unfair stereotypes and the government of Greece was forced to accept harsh austerity measures. ▫Internally, traditional parties were blamed for the crisis and the high levels of bureaucratic corruption. To a greater extent, many Greek citizens criticized the coalition governments of N.D. and PASOK for agreeing to austerity policies set by the Troika (IMF, ECB, EU). ▫Although not in the interests of most international creditors, the Greek electorate was motivated to explore political alternatives.  Radical parties especially benefited from this new political climate.  Fostered by extremism movements throughout Europe (e.g. Podemos)

Rise of the Extreme Left Syriza, Coalition of the Radical Left (ΣΥΡΙΖΑ) ▫Far left, anti-establishment ▫Founded in 2004 following the unity of 13 left- wing/radical-left parties ▫Democratic Socialism/Populist  Nationalization  Anti-austerity  Anti-capitalism  Welfare state/State job programs  Higher tax for wealthy

Rise of the Extreme Right Golden Dawn (Χρυσή Αυγή) ▫Far-right, fascist, neo-Nazi ▫Officially established in 1985, recognized in 1993 ▫National Socialist/Ultra-nationalism  Anti-immigration  Anti-austerity  Eurosceptic  Aggressive foreign policy  Nationalization

2015 Greece National Election Results

Syriza forms Coalition Government Tired of tough austerity measures and a sharp decrease in their standard of living, the Greek people elect Syriza with 36.3% of the vote. ▫149 seats won; forms coalition with right-wing, conservative populist party Independent Greeks.  Ideologically different socially and fiscally, but both are anti-austerity.  Reflects voter sentiment against Troika.  Ignites fear of “Grexit” as well as other Eurosceptic parties in Europe (e.i. Podemos, UKIP, etc.)

Current Situation Despite ambitious promises, the newly elected Prime Minister Alexis Tsipras and his appointed Finance Minister Yanis Varoufakis have failed to renegotiate the bailout deal as wanted. Although Syriza claims full support for EU membership, the party is rumored to be preparing to nationalize banks and print a domestic currency. Discussions with Euro Area partners and IMF are ongoing: 7/greek-finance-minister-debt-talks-eurozone-live 7/greek-finance-minister-debt-talks-eurozone-live

End of Moderation? Result of Media Bias? Prime Minister Alexis Tsipras supporting Podemos at European Left rally