Greek Premier Faces Electoral Test

END OF SOCIALIST ERA?

IT could be a long, hot summer in Greece this year, one that could spell the end of the first Socialist era here - or its unlikely rebirth. In the last days before Sunday's parliamentary elections, the Greek government has pulled out all the stops - from writing off farmers' loans to promising civil service posts after the elections to about 100,000 jobless Greeks.

But despite its best efforts, Prime Minister Andreas Papandreou's ruling Panhellenic Socialist Movement (Pasok) may be unable to organize a victory. And Greece's eight-year socialist experiment, after nearly 60 years of conservative rule, could come to a grinding halt.

The biggest hurdle to Pasok's reelection attempt is the government's alleged involvement in a $210 million banking scandal. George Koskotas, a banker awaiting extradition from an American jail, allegedly skimmed off interest at Mr. Papandreou's behest to support Pasok. Papandreou rejects these accusations as ``miserable lies,'' but the issue remains unresolved, because parliament adjourned early - just days before an investigative committee's findings were due to be released.

The government's economic austerity program may also hurt Pasok's chances. As a result of a tight wage policy, the country has been besieged by strikes since late last year. Says former Pasok economy minister Gerassimos Arsenis: ``The austerity program shifted the burden onto wage earners, without shifting resources to investment.''

And, at the same time, the now-divorced Papandreou has had to fend off criticism about his romance with Dimitra Liani, an ex-air stewardess half his age.

The scandals have done their damage, and recent opinion polls give the conservative opposition party, New Democracy, a seven-percent lead among voters nationwide.

``New Democracy should give a medal to two people, Dimitra and Koskotas,'' says a candidate for the party, Lazaros Ephraimoglou.

But despite their lead, analysts say, the conservatives are unlikely to win a clear majority in parliament.

A new electoral law passed this spring that gives smaller parties a greater chance of representation is likely to siphon off votes from the Pasok and New Democracy, the two largest parties. (Greeks have generally followed one of the two major parties, since traditional electoral laws have favored large parties, with the idea of promoting stability in politically volatile conditions.)

But even with this law, the fight this year still boils down to a choice between Pasok and New Democracy. A third powerful force, a new grouping of communist and socialist forces that could command up to 12 percent of the popular vote, could take votes away from both Pasok and New Democracy.

Many analysts predict Pasok and the leftist coalition will form a government. But coalition spokesman Stathis Yiotas, a disgruntled, former Pasok minister, says Papandreou must quit first. ``We can't accept responsibility for the scandals,'' he says.

Even within Papandreou's own party, says another analyst, members are beginning to talk about a post-Papandreou era. ``The knives are already out,'' he says.

While Papandreou's political situation may be precarious, he is famed for political dexterity and could surprise detractors.

This spring, for instance, Pasok defeated a no-confidence motion of which the conservatives had tabled in parliament. In a show of what many consider Papandreou's authoritarian style, he quickly expelled three Pasok members who abstained from voting.

Pasok has come closer to the center since the 1985 elections with more pro-Western policies, for instance embracing the European Community and allowing US military bases to remain in Greece. Another agreement is currently being negotiated, with a resolution expected after elections. In parallel, New Democracy is trying to sell itself as more liberal.

A large undecided sector - mostly women and educated professionals in the center and center-left - could determine the vote one way or the other.

If a government cannot be formed, another round of elections will have to be called, and the airwaves in Greece could be filled with campaign sloganeering for months to come, the billboards plastered with rude mesages about political opponents.

Difficulties in cobbling a coalition or a minority government could spawn political instability just at the time that Greece will need to marshal its economic forces to prepare for stronger competition in an integrated European market beginning in 1992. Businessmen say there is such uncertainty they have put most new investment on hold. In addition, several northern European conglomerates have entered the Greek market over the last two years, acquiring more than a dozen of the best-run, most profitable consumer products companies.

``We will probably have an unsettled election situation until mid-1990. Other countries, like Italy, have enough aplomb to handle this, but not Greece,'' says a prominent Western analyst. ``There could be a 10-month slug-fest or early elections.''

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