Does DIKO change anything?

Much is being said about the meaning of Sunday’s elections in the junior party of the ruling coalition in Cyprus. Indeed, analysts, political pundits, party insiders and journalists are already trying to sort out how the ousting of Marios Garoyian by Nicholas Papadopoulos will change the balance of power in Cyprus’ government. Here’s some points to watch:

Don’t worry when they leave the government

Cyprus has a presidential system and the government doesn’t fall if it fails to command a majority in Parliament. This is obvious, but many people are worried about it. In any case, DIKO under Papadopoulos will remain liberal and will most likely support legislation related to Cyprus’ MoU.

In any case, DIKO will probably not leave the government for a while, perhaps well after May

Don’t be surprised by a reshuffle

The cabinet seats held by DIKO –most importantly in Defense and Education- will likely change. Commerce and Energy is also held by DIKO and it, too will likely become part of a reshuffle, but for different reasons, although a general DIKO-reshuffle will offer an excellent opportunity for wider changes.

DIKOWatch for privatizations

DIKO’s support for the hardest and politically costliest decisions will start high and dwindle fast as the need to pick up votes from Papadopoulos’ formerly close ally, Lillikas, will likely drive the party towards populism. If the privatizations program takes off soon, that’s good. The more the delay, the more hick-ups it will face.

Keep an eye on the banks.

Just keep an eye. If we notice that the way the bank deals with the largest borrowers (about 20 borrowers hold 6 billion in NPLs) starts to become softer (again), then it’s time to start asking questions about “political influence” in the bank. The sooner they make harsh decisions, the better it will look.

Worry about accidents

With Papadopoulos leading DIKO, the Center becomes a viable political pole. But, despite what one would expect, the center is more hardline with respect to “national” issues than either the Right or the Left. As tensions rise, nationalist rhetoric returns to the Papadopoulos era (under Nicholas’ fathers’ rule), social divides will again surface.

With more acrimonious conditions, rash decisions in Parliament (remember the Co-ops Bill?) will become more likely and DIKO will become more unpredictable. With it, Parliament decisions will also become more unpredictable.

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