First of all, I think it is essential to stress the multiple character of the current crisis. We live in a globalized economy now more than ever, and it is a truism that the effects of, for example, a credit crisis in the US could very much influence economic policies in the Eurozone and beyond. In contrast with other countries around the world, Greece has been particularly hit by the so-called Great Recession of the late-2000s, for a variety of reasons. Greece’s current predicament could be summed up in the herculean task of dealing with its sovereign debt crisis. This colossal public debt was mainly caused by spendthrift state policies during the previous three decades. Successive governments of Greece, whose economy is among the 30 largest in the world, and was one of the fastest growing in the Eurozone during the 2000s, based the country’s entire social model on running large public deficits, predominantly in order to finance public sector jobs (thus creating a gigantic and unsustainable civil service), with an eye to gaining advantage over their political rivals. The somewhat nefarious ways of the credit rating agencies, in conjunction with the lack of a stentorian European answer to Greece’s financial woes, has added poisonous elements to the already toxic mix. As far as the dichotomy mentioned in the question is concerned, I would like to make two observations. It is true that a large part of the Greek civil service is slow, well-paid and overstretched (I would also add inefficient and corrupt), and that the private sector is encumbered with all the negative consequences of a big state. However, I believe that it is the type and the function of the Greek economy (with the public sector accounting for about 40 percent of GDP), often characterized as ‘semi-soviet’ due to the state’s role and the predominance of vested interests (see, for instance, the existence of closed professions), that are the main culprits. One should not neglect the fact that a very large part of private sector activity (like construction, for example) is intertwined with the state, as it is mainly financed by it.
For the last two months, a new social movement (Desperates) continuously protests against the austerity measures. How does the political system see this movement/phenomenon?
The movement of Aganaktismenoi (Indignants) of Greece was modelled on that of the Indignados of Spain (its creation was actually sparked by protesters in Madrid). It now seems to have lost its, arguably significant, momentum. The originality of this social movement was owed to the fact that it was distinctively non-violent, and that it attracted people from across the political spectrum. Press and politicians alike initially discredited the movement thinking or hoping it would go away quickly. The perseverance of the demonsrators, however, forced the political system to pay increased attention to the movement. Unfortunately, though, this multifarious and far from monolithic phenomenon was once again exploited by politicians who wished to create the false impression that they were in touch with the people on the street. The protesters, on their part, did not manage to agree on anything more than their opposition to the austerity measures and the condemnation of MPs and the political system as a whole.
What are the benefits of staying in the Eurozone and the benefits of going back to the drachma?
I strongly believe that Greece cannot afford to leave the Eurozone. The benefits of going back to national currency (the rise of exports, for instance) would evaporate in a short amount of time and any real recovery would not be sustainable. Greece has a long tradition of strong ties with the EEC/EU, which is extremely important to it for historical, political and economic reasons. Despite the fact that Athens has repeatedly failed to cultivate sincere relations with other Eurozone members, and despite some jingoistic talk about dropping the Euro for nationalistic reasons, most Greeks realise that their country could only flourish in close economic cooperation with its traditional European partners. Of course, there are some disadvantages as far as Greece’s membership of the Eurozone is concerned; some analysts have long noted the inefficiencies of the economic system of the EU, as well as the inequalities it creates. These are issues, however, that need to be addressed on a European level, and certainly solutions that take into account not only major exporting countries like Germany and France, but also the countries of the South and the periphery, in general, should be reached. This is tied to the quintessential issue of political integration in the EU lagging behind economic integration.
In Greece, the labour unions have close connections with the political parties and for many they are historically controlled by PASOK. Do you think that this crisis can change this political relationship?
The way the socio-political system was created in Greece the last 30 years, has influenced all strata of society and all interest groups. Labour unions gained considerable power with the rise of PASOK, and the two seemed interconnected to a large degree. The symbiotic relationship between the unions and the socialist party has been on the wane since the death of Andreas Papandreou, and, more importantly (and somewhat ironically), since the premiership of his son, George.
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* Published in Political Reflection Magazine (PR) Vol. 2 | No. 3
** Dr Alexandros Nafpliotis has a PhD and an MA from the LSE in International History and a BA from the University of Athens. He has recently presented his research at conferences and seminars at King’s College London, Oxford University, NYU, Yale University, and the Centre for Contemporary British History, and he has won a dissertation prize from the London Hellenic Society. His most recent publication is “The 1971 Reestablishment of Diplomatic Relations between Greece and Albania: Cooperation and Strategic Partnership within Cold War Bipolarity?”, in Anastasakis, Bechev, Vrousalis, eds., Greece in the Balkans: Memory, Conflict and Exchange, Newcastle: Cambridge Scholars Publishing, 2009. His research interests lie in the field of international history of the Balkans and the Mediterranean during the Cold War. His doctoral dissertation (to be published by I.B. Tauris) focused on British policy towards the Greek military dictatorship, 1967-1974, and analysed diplomatic, economic, cultural and defence relations between the two traditional allies, by using archival sources from both countries for the first time. He has taught on various aspects of twentieth century international history at the LSE for a number of years.
*** Kaan Renda is a Doctoral Researcher at King’s College London.