Greece an easier ally? Strong Socialist victory may open way for Papandreou to be more conciliatory to West

Prime Minister Andreas Papan-dreou's strong election victory is expected to give him greater flexibility in both domestic and foreign affairs. But Sunday's Socialist win does not necessarily add up to a mandate for major change, say Greek political observers and foreign diplomats here.

Mr. Papandreou, they say, will have to move quickly to shore up the country's faltering economy and stabilize foreign policy. And the need to deal with daunting economic problems, some diplomats say, may well encourage him to be more conciliatory toward his Western partners.

They note the lack of anti-American rhetoric in the election campaign and statements by Papandreou that, if he were reelected, Greek-US relations would enter a calmer phase.

During the election campaign, Papandreou said he had no plan to withdraw his country from NATO or the European Community. But he did repeat his 1981 pledge to expel the United States bases from Greek soil after the current agreement expires in 1988. He also said he would demand the withdrawal of US nuclear weapons stored in Greece although he has not specified when.

As the final decision on the bases approaches, however, he will have to consider what effect such a move would have on the $500 million in military aid the US provides Greece each year. Loss of those funds would upset the balance of power between Greece and Turkey and as a result do severe damage to Greek interests.

Papandreou's Panhellenic Socialist Movement won nearly 46 percent of the vote, the conservative New Democracy Party won 41 percent, the pro-Moscow Communists 9.9 percent, and the Eurocommunists 1.8 percent. The Socialists will have 161 seats in the new Parliament, against 125 for New Democracy, 13 for the pro-Moscow Communists, and 1 for the Eurocommunists.

The election did see the two communist parties together lose 3.3 percent of their support, compared to their showing in last year's elections to the European Parliament.

Throughout the campaign there was some concern that a return of New Democracy would plunge the country back into the sort of heavy-handed right-wing rule that characterized the 1950s and '60s. The prime minister openly encouraged that sentiment during the campaign.

Papandreou's election in 1981 brought to power the first left-wing Greek government since World War II. Even some who have become bitterly opposed to Papan-dreou since 1981 thought the time had not yet come to turn back.

Despite Papandreou's remarkable political victory few independent political observers in Athens regard the result as a mandate for his policies.

According to political columnist Costas Calligas, ``The dynamic is completely different from 1981. No one has favorable expectations this time. The center and right are radicalized. The [communist] left is radicalized. Paradoxically, though he won, he is finished politically if he misplays his hand.''

The rallies of New Democracy during the campaign reached a level of intensity and fervor rarely seen for a conservative event. This determination is not likely to disappear any time soon. Many prominent centrists have openly and bitterly criticized the prime minister, accusing him of undermining the country's democratic institutions and domestic and foreign policy foundations.

In his concession speech Harilaos Florakis, head of the pro-Moscow Communist Party, asserted that Papandreou's majority in Parliament was built with ``stolen'' communist seats. He hinted that a wave of strikes may be in store.

Nevertheless there is a general consensus here that in the short run Papandreou will have more room for maneuver. He has a large majority in Parliament. Former President Constantine Caramanlis -- who had exercised a restraining influence on the prime minister -- is out of the way. And the communists have been routed.

Papandreou must use his new flexibility to reverse the dismal state of the economy. Greek inflation is more than 18 percent, unemployment near 10 percent, domestic and foreign debt has skyrocketed, and the Greek currency has fallen against to the dollar.

To improve the economy, he will have to steer a careful course between the unions, in which the communists are very powerful, and the private sector, which has been damaged by what industrialists regard as his unpredictable policies.

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