GREECE: Greece was plunged into a general election campaign yesterday which will see the retirement of the Prime Minister, Mr Costas Simitis, and the possible elevation of the country's most successful political dynasty, the Papandreou family.
Mr Simitis announced that March 7th would be polling day and that he would resign as party leader before then, paving the way for the popular Foreign Minister, Mr George Papandreou, to replace him and - he hopes - revive the fortunes of Pasok, the ruling socialist party.
Mr Simitis said while he would remain as prime minister until the elections - five months before the Athens Olympic Games - he was stepping down as president of Pasok and would hand over the party leadership before the poll.
The actions left the way clear for Mr Papandreou, whose father, Andreas, and grandfather, also called George, were prime ministers, to ride to the rescue of Pasok who trail the opposition conservative New Democracy Party by 7 per cent going into the election.
Mr Simitis, who won elections in 1996 and 2000, has borne the brunt of voter discontent as many Greeks believe their standard of living has declined, with unemployment at 9 per cent, despite years of strong economic growth from Games preparations. Most political insiders expect Mr Papandreou (51) to be the only candidate to head the party, and believe his reputation as Greece's most popular and respected politician is the socialists' only hope of retaining power.
They said the transfer of power from Mr Simitis (67) to Mr Papandreou had the blessing of the prime minister and other Pasok powerbrokers. The handover was expected before the end of the month. "This is a new era and the new era for the Pasok party demands a younger generation that will take on the necessary responsibilities," Mr Simitis said. Parliament will rise on February 6th, marking the start of formal campaigning.
Apart from the period between 1990 and 1993, when the conservatives were in power, Pasok has governed Greece since 1981. Investors cheered the news, with the Greek stock market closing at a 19-month high and outperforming other European bourses.
Mr Simitis's pledge to step down right after the elections raised hopes that the vote would bring about a change in economic policies, even if Pasok managed to stay in power. Mr Simitis said a rejuvenated socialist government with a new mandate would be best placed to solve a deadlock with Turkey over the divided island of Cyprus.
The leader of the conservative New Democracy Party, Mr Costas Karamanlis, is a nephew of Mr Constantine Karamanlis, who was prime minister in the 1970s and president in the 1980s and 1990s.
"With his flight, [Simitis] is himself admitting the failure of the socialist party policies," Mr Karamanlis said.
- (Reuters)