Who'll Win Gold In This Election?

Greece's vote comes at a crucial time, just months before the Olympics

With national elections due on Mar. 7, Greece's main candidates for Prime Minister look like two sides of the same coin. Socialist George Papandreou and center-right rival Kostas Karamanlis both hail from Greek political dynasties and sport degrees from U.S. institutions. And in a country that has known extremes of left and right, Papandreou and Karamanlis are solid centrists with remarkably similar platforms.

Recent polls give Karamanlis a three-point edge. But while a victory for his New Democracy party would end 23 years of nearly unbroken Socialist rule, economic policy will favor freer markets no matter who wins. Both Papandreou and Karamanlis back less government intervention and more measures to encourage foreign investment. "Whatever party is in power will follow growth policies," says Michael Massourakis, an economist at Alpha Bank in Athens.

Still, the elections come at a crucial moment. The nation is sprinting to finish preparations for the Athens Olympic Games in time for the Aug. 13 opening ceremony. Delicate talks are under way between Greeks and Turks on reunifying the island of Cyprus, which is to join the European Union on May 1. Amid all this, the economy is zooming: At an inflation-adjusted pace of nearly 5%, fueled by Olympics-related construction projects, growth is the fastest in the EU. The boom is raising hopes that the nation can catch up with the rest of the EU. But there is also a danger of overheating -- and of a post-Olympics hangover.

CHANGE OF THE GUARD. The Games may yet prove a problem. A new rail line linking the airport to the Athens subway system is scheduled to open in July, leaving little time to work out any kinks. And work is behind schedule on a soaring roof for the main Olympic stadium. The stadium will be able to host events, but there's a risk it will still look like a construction site.

In a country known for rough politics, what Greeks appear to want most is a change of the guard. Papandreou's PASOK, in power since 1981 but for a four-year hiatus, suffers from a perception that it has grown lethargic and corrupt. "The main thing Karamanlis has going for him is fatigue with the party in power," says Theodore A. Couloumbis, director-general of the Hellenic Foundation for European & Foreign Policy in Athens.

As for the Olympics, officials insist they are above politics. "We agree totally on preparation of the Games," says Athens Mayor Dora Bakoyannis, a member of New Democracy. Costas Simitis, the outgoing Prime Minister, is also trying to ease worries. He moved elections forward from May to March to get the politicking out of the way sooner.

Simitis has been easing economic worries, too. He recently ceded party leadership to Papandreou, who had been Foreign Minister. While that was a political move, it also signaled that PASOK will continue its transition from a leftist movement to a centrist party. Papandreou has already named outspoken free-market advocates to his election slate. He promises to speed deregulation of the energy market, cut red tape on foreign investment, and remove barriers to competition -- all reforms that could help Greece keep growing.

Both parties are now focusing on centrist voters. But in spite of its edge, New Democracy is haunted by the 2000 election. Early returns pointed to victory, and party supporters were already celebrating when late results gave PASOK a narrow win. This year, champions of a more modern Greek economy will probably find something to celebrate no matter who triumphs.

By Jack Ewing in Athens

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