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Summer gives Greek PM window to contain unrest

Greek protests that have erupted into deadly violence are likely to fade over the summer, giving the government a narrow window to show the public it can deliver on its austerity goals and a promised crackdown on corruption.

Greece's main public and private sector unions announced plans this week to hold a new general strike on May 20, hoping to build on the momentum from a May 5 rally which drew 50,000 angry workers, students and pensioners into the streets.

But once that strike is out of the way, Prime Minister George Papandreou's government could face a three-to-four month period of relative calm as Athenians flee the intense heat of the capital for the breeze and beaches of nearby islands.

Political scientists, pollsters and even senior union officials say the seasonal exodus affords the government extra time to tackle its reform goals, giving it a strategic advantage in its showdown with an angry public.

But the reprieve will be short-lived unless Papandreou moves aggressively on multiple fronts over the coming months.

“The government faces a race against time and a race against themselves,” said Costas Panagopoulos, head of pollsters ALCO. “I would say they have three months to prove they can meet their (economic) targets and show results on the corruption front.”

A key demand of the protesters has been a crackdown on corrupt politicians they blame for mismanaging Greece's economy. The government seems to have heard the cries from the street and has taken a series of mainly symbolic steps to stamp out graft.

Parliamentary investigative committees looking into two major political scandals of the past decade -- the Vatopedi land swap deal and a bribes-for-contracts affair involving German firm Siemens -- are expected to yield results by the end of May and June, respectively.

The justice ministry is promising to probe the income sources of top officials. The finance ministry sent a signal to tax dodgers on Thursday, naming and shaming dozens of doctors and dentists from a posh district of Athens it accuses of filing false returns. Fines were imposed and bank deposits frozen.

But punishing former ministers and parliamentarians, the kind of step the public would welcome most, remains tough due to strict statutes of limitations set out in the constitution which effectively invalidate any crimes committed before 2007.

Getting around these rules may prove to be one of the government's biggest obstacles as it moves to appease protesters over the summer in the hopes of preventing mass unrest when they return to the capital in September.

“They need to proceed rapidly in sending people to justice,” said Costas Ifantis, a political scientist at the University of Athens. “This would certainly have a symbolic impact with protesters who are demanding punishment.”

The summer also gives the government valuable months to show it can deliver on the tight austerity timeline imposed by the European Union and International Monetary Fund (IMF) in exchange for €110 billion ($139.7 billion) in aid.

Under that plan, deeply unpopular cuts in wage and pension bonuses and an increase in value-added tax (VAT) to 23% must be implemented immediately.

By the end of June, the government must launch a far-reaching internal reorganization to reduce the number of elected and appointed officials on public payrolls. By the end of September, it must put in place a comprehensive pension reform and audit program to combat rampant tax evasion.

A month before that, the IMF will issue its first review on the government's progress on measures that are a crucial part of a front-loaded austerity plan that aims to slash the deficit by 5.5 percentage points of gross domestic product (GDP) this year.

Despite widespread public opposition to the measures, Panagopoulos at ALCO said: “If people are convinced the austerity program is headed in the right direction, demonstrations in the autumn and winter could be contained.”

“About half the population is prepared to accept reductions in their quality of life, but they need to know there is hope at the end of the path. They won't make sacrifices without hope.”

Complicating the government's task is the slowness with which it has moved to fill hundreds of state posts since taking power last October. In a nod to greater transparency, Papandreou insisted many of these jobs be filled using open recruitment.

This has dragged out the process. Seven months after taking power, for example, the government has yet to find a replacement for the discredited head of its statistics agency.

Now it must make up for lost time, ensuring the people are in place on the ground to implement its austerity plan.

Savas Rombolis, a professor at Panteion University and scientific director of the Institute of Labour, a think tank linked to private sector union GSEE, said the government had very little time to win over the protesters.

After the calm of the summer, Greeks will return to find their salaries slashed and anger will rise.

“In the winter people will really start to feel these measures,” Rombolis said. “Until now this has been largely a theoretical debate. The pain has not been felt yet.” (Reuters)