The elections took place in a tense and polarized atmosphere, amplified by both sides. New Democracy and Leftist parties under Synaspismos campaigned on accusations of corruption against PASOK amid a series of growing scandals, most notably the Koskotas and Yugoslav corn affairs. In response, Papandreou introduced laws aimed at stalling the investigations and used the state monopoly over mass media to contain the scandals. Moreover, he changed the electoral law shortly before the elections, a move designed to prevent New Democracy from securing an absolute majority. On election day, multiple election irregularities by the state were reported.
New Democracy secured a 5% lead in the popular vote, but the newly revised electoral law prevented it from forming a government. The second party, PASOK also failed to form a government because the other refused to provide support. The stalemate was broken with the unexpected agreement between New Democracy and Synaspismos to form a short-term government with a limited mandate of "katharsis," a thorough investigation of PASOK's corruption. Tzannis Tzannetakis was chosen as a compromise to lead the coalition government and it was dissolved after the indictment of Papandreou of four of his ministers in connection to the Koskotas scandal on 7 October. This marked the first and, as of 2025, the only occasion when the Communist Party of Greece (as part of Synaspismos) joined a governing coalition.
George Koskotas began working at the Bank of Crete in 1979 and quickly accumulated wealth by falsifying bank records. By 1985, he had purchased the bank and used it to build a growing media empire. His rise drew scrutiny, as investigations into rapid media ownership changes in the mid-1980s raised suspicions among publishers and the judiciary. To evade prosecution, he fled to the United States, where he was arrested on unrelated fraud charges. From prison, Koskotas claimed that more than US$200 million[i] missing from his bank had been embezzled with the help of several government ministers and even Papandreou. In exchange, he had used his media outlets to support Papandreou's socialist party (PASOK), even acquiring conservative newspapers once critical of Papandreou.[2][3] The allegations sparked international attention and political turmoil.[4]
Several months after the arrest of Koskotas, six ministers (including Costas Simitis[5]) resigned in protest of the corruption among the most senior members of PASOK.[4] There were demands for a vote of no confidence against the government, which Papandreou defeated in December 1988 and another one in March 1989.[6] Still, three members of PASOK voted against the party line, however, Papandreou responded by removing them from PASOK, including Antonis Tritsis, who was a founding member of PASOK.[7]
Despite the rising public frustration with the state of affairs, Papandreou abused his position to stay in power since he had successfully removed constitutional restraints in 1985. Notable actions include but are not limited to the following:
Papandreou changed the electoral law shortly before the elections, a move designed to prevent New Democracy from securing an absolute majority.[ii][8][9][10]
Bestowing public appointments to about 90,000 people to gain additional votes six months before the 1989 elections;[11]Synaspismos political party decried this as a "recruitment orgy."[12] Papandreou's blatant patronage reached the point of giving in one of his rallies a public command to the Minister of Finance Dimitris Tsovolas to "give it all [to them]" (Greek: Τσοβόλα δώσ'τα όλα) and the crowd chanted these back.[13][14]
Judicial independence was damaged when Papandreou passed a law via emergency procedures—despite massive backlash from lawyers, judges, and clerks—to prevent the judicial investigation of the Koskotas scandal from advancing to Athens Appeals Court.[15]
The election campaigns were conducted under a polarized atmosphere with inflammatory allegations and vitriolic personal attacks, even between the two leaders of the dominant political parties.[16] PASOK's programme avoided mentioning the Koskota scandal and instead emphasized economic modernization with slogans, "For Victory and New Progress," and "PASOK is here: certainty for the present, hope for the future."[17] New Democracy's campaign strategy was based on liberalization of the market, i.e., "free the competitive forces of the market" from the overreaching state, but also criticized PASOK about the scandals with the slogan, "We deserve a better Greece."[18]
On 2 June, Avriani, a tabloid newspaper supporting PASOK, published a transcript of a conversation between Mitsotakis and an unidentified mistress that was supposedly being taped and also claimed to possess 'pornographic' photographs of Mitsotakis but never published.[16] This was in response to the publication of nude photos of sunbathing Dimitra Liani, Papandreou's then-mistress.[16] The rhetorical confrontation between the two leaders in the campaigns was personal. Papandreou implied that Mitsotakis was a Nazi collaborator during World War II and talked about Mitsotakis' "treachery" against his father's government in Iouliana of 1965.[19] On the other side, Mitsotakis, invoking the Koskotas scandal, talked of Papandreou's "little corrupt team that has looted Greece" and that PASOK was led by "a bunch of thieves."[19] Papandreou's defense was that the scandal was created and used against him: "The Americans and the Right together with the crook Koskotas are conspiring to otherthrow socialism in Greece."[19]
Despite the friction between the two sides in the newspapers, PASOK had the advantage of being the governing party, having control of the state apparatus that provided radio and television services, which became an unconcealed component of PASOK's propaganda.[20][12] For example, state television programs, including from two foreign cable networks, were interrupted to display Papandreou's final speech at his mass rally in Athens, but no such opportunity was presented for other political leaders.[12]
Weeks before the elections, various terrorist groups advocated to the public to spoil their ballots and used bombs against public buildings, including those of Ministry of Health and the Ministry of Justice.[21]
Irregularities
Irregularities and poor vote handling and counting were reported on election day.[22]Antonis Tritsis, a PASOK defector and leader of Greek Radical Movement, accused the state officials of not sending his party ballots to many polling stations.[22] Mitsotakis also accused the government of failing to send the election officials to their appointed polling stations or of delaying the opening.[22] Both New Democracy and Synaspismos were irritated by the refusal of the Ministry of Interior to release the official vote count, which was released a week later.[22]
PASOK's electoral percentage dropped to 38%, down from 48% in 1981, primarily due to the fallout from the Koskotas scandal.[23] Although Mitsotakis' New Democracy party secured 43%, it was insufficient to form a government, as Papandreou's last-minute change of the electoral law required a party to win 50% of the vote to govern alone. Mitsotakis made an offer to Charilaos Florakis, head of Synaspismos, but it was rejected. Papandreou had designed the electoral law so that PASOK, even if it came in second, could form a government with the backing of other leftist parties, but his offer to Florakis was rejected.[24]
The failure of the two major parties to secure enough support to form a government led to a hung parliament. The impasse was resolved when Florakis announced "a broadly based consensus government under a neutral prime minister" on 27 June 1989. Mitsotakis agreed to step down and Tzannis Tzannetakis served as prime minister for the coalition government, marking a historic compromise.[25] Despite their opposing ideologies and their division during the Greek Civil War both sides sought a "katharsis," a thorough investigation into PASOK's corruption.[26][11][27] This decision carried significant weight, as failing to bring charges against Papandreou under this coalition would prevent any future government from doing so according to the Greek constitution.[28][29] The participation of the Synaspismos in the government also marked the end of the militarized politics of the past, since there was no reaction from the military. Papandreou denounced the collaborative government as "unholy and unprincipled,"[30] and he ordered his ministers not to cooperate in the handover of power, and official documents and state treaties went missing.[31]
The coalition government indicted Papandreou and four of his ministers on 28 September 1989, after which it was dissolved and new elections took place in November 1989.[26] Moreover, to avoid political exploitation from any future omnipotent prime minister, it dismantled some of the state's surveillance infrastructure and granted the first private television broadcast license to publishers critical to PASOK as a counterbalance to state media.[32][33]
While it is frequent in Greek history for the governing party to change the electoral law for its purposes, Papandreou's electoral law change in 1989 was unique as it personally benefited him to avoid an indictment for the Koskotas scandal and be sentenced to life in prison if convicted.[35]
Magalhaes, Pedro C.; Guarnieri, Carlo; Kaminis, Yorgos. "Democratic consolidation, judicial reform, and the judicialization of politics in Southern Europe". In Gunther, Diamandouros & Sotiropoulos (2006), pp.138–196.
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