Posted on Thursday, June 30, 2011
Athens, Greece: President Obama's fate may rest, in part, on his counterpart in Athens. A year ago, the U.S. economy was poised for recovery, only to be roiled by the first Greek debt crisis. This past week, it was déjà vu: Wednesday's positive trends on Wall Street were foiled by Thursday's riots on Athens streets.
It should come as little surprise, therefore, that Greek Prime Minister George Papandreou is probably on speed dial at the White House. But what does the president hear when he speaks with the prime minister?
First, he hears American English. George Papandreou, after all, was born in Minnesota to an American mom. His father, the former Prime Minister Andreas Papandreou, was an economics professor, living in exile in the U.S. during years of military rule in Greece. George, the son, graduated from Amherst College, and has been a college professor at Georgia State University. He is on a first name basis with most senior foreign policy hands in the current Administration, having worked closely with them during the Balkan wars of the late 1990s, when he was Greece's foreign minister.
And for good or bad, Obama and Papandreou's political strengths and weaknesses mirror one another.
Obama and Papandreou were both elected on a mandate of "hope." Each came to power in the early days of the global financial crisis. In both countries, conservative parties had not only ushered in a recession, but had widely expanded government and built up considerable debt.
That means that once they were elected, both Obama and Papandreou have had to not only restore economic growth, but also take on the long-term challenge of structural budget deficits and huge long-term public debt.
As a result, these two left-of-center heads of state have had to consider reforming—or even dismantling—major elements of the welfare state. That's hard enough in the best of times. It is nearly impossible when unemployment is high.
Both showed initial political courage. Obama passed a massive stimulus package, and tried to reform health care. Papandreou came clean with the faulty—indeed, fraudulent—accounting of his predecessors, and then passed a first round of austerity measures, cutting public sector pensions and salaries, and tried to reform a broken tax collection system.
But both also have begun to lose touch with their publics. Hope is fading in both countries. That's largely because the economy remains weak. But neither leader has been able to sustain the visionary rhetoric in governing that propelled them as candidates.
Both may be too professorial. Policy wonks may salivate at the thought of two former professors willing to roll up sleeves to master bond spreads and actuarial charts. Unfortunately, neither leader has translated that mastery into an easy-to-explain plan for how to cut long-term deficits or how to inspire and generate new economic growth. Entrepreneurs in both countries are desperate for direction and optimism that government officials can provide. And workers in both countries—whether on the factory floors or shipyards or in the public sector—want to know how policies will lead to a better future.
Moreover, neither Obama nor Papandreou have found a way to work with their political opponents. Both failed to get any significant opposition support for any of their first major initiatives. Whether the fault lies in the ruling party or the ruled party can be an endless debate; what is certain is that neither of them has mastered the relationship.
And neither leader has been able to shake the nagging criticism that they are not genuinely "native". The extensive wrangling over Obama's birth certificate has an odd parallel in Greece, where many joke that Papandreou's problem is precisely that he DOES have a U.S. birth certificate, and not a Greek one. For many, Papandreou's faltering mastery of the Greek language holds him back from connecting with the man on the street. In a country with a long history of anti-Americanism, Papandreou's American accent is no asset.
Why does all this matter? Because Obama and Papandreou need each other. Obama needs Papandreou to settle world financial markets by coming up with a sustainable plan for Greece's finances. There can be no sustained recovery in the United States as long as markets are wildly uncertain about the fate of the world's second most important currency. And Papandreou needs Obama, because a American support—and at times pressure—has been essential to the IMF and EU support that is critical to getting through the crisis. More importantly, perhaps, they need to find a way to make the case to, respectively, the world's leading democracy and the world's oldest one that they have a vision for prosperity.
William J. Antholis, Managing Director, The Brookings Institution