At the beginning of the 21st century, entry into the European Monetary Union (EMU) and the improvement of relations with Turkey were the most important issues in the political life of Greece. Two objectives that had begun to inspire the governing activity of the Panellinion Socialistikon Kinima (PASOK, Pan-Hellenic Socialist Movement) since its reconquest of power in 1993, after three years of opposition to the conservative executive of Nea Demokratia (ND, New Democracy). The Socialists, led first by A. Papandreu (1993-1996) and then by K. Simitis, the latter much more determined than his predecessor to support a policy of greater integration of Greece into the European Union (EU), they obtained the country’s membership of the euro and started a new dialogue with Ankara. But from 2002 public opinion began to show a growing detachment from PASOK, favoring ND’s return to power in 2004.
For the government of Simitis, 2000 began amidst protests and strikes against the austerity policy imposed by the government on the country in order to achieve the necessary requirements for joining the euro. In February, the premier decided to call early elections for the month of April. Before the start of the electoral campaign, Parliament voted with a large majority in favor of a second term for the President of the Republic K. Stefanopulos (Feb.). In the April consultations, PASOK managed to beat ND by a narrow margin, winning 43.8 % of the votes (158 seats) against 42.7 % of rivals (125 seats). Simitis formed a new government, and in January 2001 was able to celebrate Greece’s entry into the EMU. But, after reaching this milestone, the premier was forced to confront a growing social protest. Strikes and demonstrations followed one another between 2001 and 2002, first against the reform of the social security system, then against the price increase following the introduction of the euro (January 2002). In the same period, however, the executive achieved important results in the fight against far-left terrorism: Parliament approved a tightening of repressive measures (June 2001) and the police forces arrested some leaders of the Revolutionary Organization November 17 and Revolutionary Struggle groups. popular (July2002 – January 2003), responsible for murders and attacks mainly against military or commercial structures linked to US interests. These successes in the fight against terrorism did not prevent ND from winning in a series of regional and local elections, including those in Athens, where D. Bakoyannis (Oct. 2002), former Minister of Culture and daughter of the former, was elected mayor. Premier K. Mitsotakis. After another wave of strikes by civil servants, fighting for a pay rise, in early 2004Simitis announced his resignation as leader of PASOK and called early elections for March. Two moves dictated by the attempt to contain the rapid rise of the opposition. PASOK chose Greece Papandreu, foreign minister and son of the former prime minister, as the new party president and candidate to lead the government, while ND relied on Kostas Karamanlis, party leader since 1997 and nephew of the former president of the Republic Konstantinos Karamanlis. In the ND elections it obtained 45.4 % of the votes (with 165 seats), PASOK 40.6 % (with 117 seats), Kommunistiko Komma Ellados (KKE, Communist Party of Greece) 5.9 % (with 12seats). It was a historic victory for conservatives, often in opposition in the previous two decades: Karamanlis, 47, became the youngest prime minister in the history of the republic. As soon as he took office, the premier immediately set to work to cope with the organizational emergency of the Olympics, set for August. The delay in completing the works of the plants and a series of terrorist attacks (May-June 2004) had in fact alarmed the international public opinion on the possibility of being able to play the Games regularly. But the government managed to speed up the work and strengthen security measures. The Olympics were held without incident, with a record participation of 202 nations and over 16thousand representatives, including athletes and companions. An undoubted organizational success, reduced however by the high cost of the event: about 9 billion euros, almost double the original budget. This burden on the public coffers accentuated the budgetary problems of the state, struggling with a growing increase in the deficit (which in 2004 reached 6.1 % of GDP), well above the limits imposed by joining the EMU. Furthermore, the European Commission denounced having discovered that the data on public accounts communicated by Greece in 2000, on the eve of the entry of the euro, were not reliable (Oct. 2004), causing a heated controversy between ND and PASOK, then to the government. In February 2005 the socialist K. Papoulias, former foreign minister, became president of the republic with the joint support of ND and PASOK. In June, the government obtained a vote of confidence on a project to reform labor legislation aimed at stimulating a recovery in production.
Greece’s foreign policy was largely oriented towards the continuation of the detente process with Turkey, which had begun in 1999. The controversy over Cyprus did not prevent Athens from relinquishing its veto on Ankara’s possible entry into the EU (December 1999). Despite clashes and moments of tension, the dialogue between the two countries experienced significant progress. In fact, in 2000, a dense exchange of official visits and political consultations began between the Greek and Turkish authorities, which resulted in the stipulation of economic and cultural agreements, and in the signing of a joint arms reduction program (April 2001). In May 2004Karamanlis invited the Turkish Prime Minister, RT Erdoğan, to Athens and pledged the support of the Greek government for Turkey’s accession to the EU. An important decision, which however did not favor an immediate resolution of the conflicts between the two countries.