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FM AMEMBASSY ATHENS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2572
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RHEHAAA/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ATHENS 001380 
 
SIPDIS 
 
DEPT ALSO FOR EUR/SE 
 
E.O. 12958: DECL: 09/11/2018 
TAGS: PREL PGOV GR
SUBJECT: TOUGH TIMES FOR PM KARAMANLIS 
 
REF: ATHENS 1302 AND PREVIOUS 
 
Classified By: Ambassador Daniel V. Speckhard for 1.4 (b) 
and (d) 
 
------- 
SUMMARY 
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¶1.  (C) Recent weeks have not been kind to PM Karamanlis. 
His ruling New Democracy (ND) party is now polling lower 
than major opposition party PASOK.  His razor-thin two-vote 
majority in Parliament has been further reduced to a 
one-vote majority, following a September 30 expulsion from 
the ruling party's caucus of a ND MP who had publicly 
called for two senior Karamanlis advisors to resign.  It is 
clear that Karamanlis' focus will be on maintaining ND 
party discipline, and a few other ND MPs are grumbling 
about the current situation.  Although Karamanlis is a 
cagey politician who has weathered other storms, the 
current situation is certainly constraining his room for 
maneuver - both on unpopular but necessary reforms, and on 
key international issues - such as the macedonia name issue. 
End Summary. 
 
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ND MP Expelled from Party Caucus 
-------------------------------------------- 
 
¶2. (C) ND MP Stavros Dailakis was expelled September 30 
from the ruling ND party caucus in Parliament, reducing the 
GOG's already razor-thin majority from two to one votes 
(151 of 300 seats). Although ND party officials had asked 
Dailakis to resign from Parliament as well, thus opening 
the way for a ND "alternate" to replace him, Dailakis has 
refused to do so.  He has stated publicly that he intends 
to "vote with" the government, but ND officials have 
privately made clear they are uncertain if they can count 
on his support in Parliament. 
 
¶3. (SBU) The expulsion took place following widely 
publicized statements over the weekend by Dailakis that 
Minister of Information and Government of Greece spokesman 
Roussopoulos should resign due to possible links to a land 
swap scandal.  Dailakis also called for the head of 
Karamanlis' private office, Yiannis Angelou, to be removed, 
due to his "interference" and "isolation of the PM from the 
real world." This was seen as a direct challeng to 
Karamanlis who had -- just days prior on September 26 -- 
publicly met with the ND caucus and openly challenged them 
to maintain party discipline. In his September 26 speech 
to the caucus, Karamanlis made clear his determination to 
proceed with reforms, adding "I say no to the undermining 
of the government.  Let whoever has other plans to question 
me directly, let him topple the government." 
 
--------------------------------------------- ---------- 
Public Views - Dour on the ND Government and Karamanlis 
--------------------------------------------- ---------- 
 
¶4. (SBU) The problems within the ruling party's caucus 
have been fueled by extensive public comment on recent 
polling data which indicate a slight voter preference for 
major opposition party PASOK over Karamanlis' ND, for the 
first time since Karamanlis took office (approximately 34.5 
for PASOK vs. 32.5 for ND; these figures are within the 
margin of error, and are changing daily as new polls are 
commissioned). Ongoing stories of potential scandals, 
coupled with GOG expressions of intent to "stand firm" on 
unpopular (but likely necessary) economic reforms have 
further fueled popular discontent with the GOG.  One recent 
poll shows that 84 percent of respondents are "angry" with 
Karamanlis and 75 percent are "worried" about his 
leadership. 
 
--------------------------------------------- ---- 
 Why it matters?  A PM Focused on Party Disipline 
--------------------------------------------- ------ 
 
5.(C) Comment: Although Dailakis'was the most egregious 
case, he is not the only ND MP who is grumbling about the 
GOG's course.  We anticipate that PM Karamanlis will be 
devoting substantial time, energy, and attention to 
maintaining party discipline.  Rumors of possible early 
elections are ramant, and although rumors of possible 
early elections are part of the Greek political terrain, 
they are currently adding to the urgency for Karamanlis to 
keep his slight majority in Parliament together.  As one of 
his advisors put it: " he can not afford to lose even one 
 
ATHENS 00001380  002 OF 002 
 
 
more MP."  We anticipate that the Prime Minister will be 
distracted, at least in the short-term, by domestic 
political concerns.  This will likely impact his ability to 
aggressively pursue his reforms reform agenda.  It may also 
affect GOG room for maneuver on key international issues 
that attract popular attention - such as the prospects for 
Kosovo recognition or the Macedonia name issue.  End 
Comment. 
SPECKHARD