Greece's day of reckoning: Bailed-out nation takes on EU presidency – and hopes to rehabilitate its economic fortunes

Riot police guarded a low-key ceremony in Athens today as Greece assumed the rotating presidency of the European Union with high hopes of rehabilitating its reputation and economic fortunes while guiding the bloc through a potentially-turbulent six months.

It was only a few years ago that the nation’s rocketing debt sparked an economic crisis which brought the very future of the European Union into question. Austerity measures and high unemployment have since spread across the continent, triggering deepening resentment of the EU.

Now, a fragile coalition government in Athens will be responsible for shepherding the bloc through the first continent-wide electoral test of the crisis policies, with European Parliament elections in May forecast to bring record numbers of anti-EU MEPs from the far right and left to the assembly.

This potential protest vote by a generation scarred by a deteriorating quality of life has sparked concern in Brussels, but there was optimism from the Greek and EU leadership.

“I really believe this year for Europe is going to be better than the last years,” said the European Commission President, Jose Manuel Barroso.

“Not long ago people were making speculation about a Greek exit, about the implosion of the euro, also about the implosion of the European Union,” he said. “So the very fact that we are here in Athens celebrating the beginning of the Greek presidency as a full member of the European Union and a full member of the euro area is clear evidence that those predictions were wrong.”

To those who questioned Greece’s ability to fulfil its EU presidency obligations – which include hosting meetings, playing a negotiating role, and helping guide the bloc’s policy agenda – Mr Barroso said such statements were “based on prejudice, and I don’t like stereotypes or prejudice”.

Other issues on the table for the EU over the next six months include negotiations on a single set of rules and a common rescue fund for banks in the eurozone. The so-called “banking union” is seen as crucial for restoring faith in the single currency. High youth unemployment across the bloc and addressing the deaths of migrants at sea are also on the agenda.

Each of the EU’s 28 member states has an obligation to host the presidency for six months. While it is a largely ceremonial role, analysts say it will give Greece an opportunity to shed its image as Europe’s weakest link.

“Unless the government or Greece makes a major mistake with regards to implementation of economic, social and security policy in Greece, this six-month long presidency can be a first step towards reconstructing the heavily damaged reputation of Greece among its European partners,” said Dimitri Sotiropoulos, professor of politics at the University of Athens.

The Greek Foreign Minister, Evangelos Venizelos, was at pains to paint a picture of “a simple presidency”, with the government keeping costs down “for substantial and symbolic reasons”.

Many people in Greece feel deep anger at what they see as unacceptable demands from Brussels for budget cuts in exchange for the bailout cash which pulled the nation back from a default. Spending on healthcare, education, social services and pensions have all been slashed, while youth unemployment is pushing 60 per cent.

Much of central Athens was in lockdown as protests were banned. Trucks of riot police protected the venues of the ceremonies and press conferences, with security fears heightened after shot were fired at the German ambassador’s residence in the capital at the end of December.

A small leftist party, Antarsya, defied authorities, however, and called for a protest march. One party member, Petros Konstantinou, said the call was to demonstrate “against a Europe of austerity, racism and where workers are asked to pay for mistakes of bankers”.

Greece takes on the revolving presidency amid the spectre of a looming political crisis, with the ruling coalition clinging on to a slim majority in the 300-seat Parliament.

In June 2012, Prime Minister Antonis Samaras took on the reins of the government with 179 lawmakers and the backing of three parties. Support for his administration is now down to 153 lawmakers after he lost the backing of the junior Democratic Left party.

Recent polls suggest the left-wing Syriza party maintains a narrow lead over Mr Samaras’ conservative New Democracy. Some commentators argue that the steadfast perseverance of the austerity policies of the government in combination with the continually deteriorating living standards of Greeks could even lead to snap national elections by the end of the year.

In a symbolic move, opposition leader Alexis Tsipras did not attend the formal ceremony marking the presidency. A Syriza official told The Independent that the move was aimed at rejecting the government’s priorities during the presidency, arguing that they did not properly address the country’s dire predicament. That earned a rebuke from Mr Samaras, who said such a move was “anti-European”.

Greek government ministers were, however, optimistic that the worst of the economic crisis was behind them, forecasting that the country would exit its recession by the end of the year. “People should this year begin to feel the impact in their pockets and in their everyday lives,” Finance Minister Yannis Stournaras told reporters.

Not all experts are quite so optimistic, warning that the country’s national debt is set to reach 176 per cent of its GDP. For months, Greek and senior European officials have hinted at various ways for Greece to tackle its Herculean debt pile without agreeing on specifics.

Mr Venizelos, the Foreign Minister, said that the nation had not asked for a reduction of its debt or more loans, which already total €240bn (£198bn). Instead, he said they were seeking ways to make the existing debt more manageable, potentially by extending repayment.

Greece is due to hold local elections alongside the European parliamentary polls in late May which would prove a litmus test for the electorate’s appetite for change.