Between the Symplegades of Resisting Politicians and Demanding International Lenders: The Case of the Greek State Budget Reform

Abstract

The scope of this study is to examine the progress of a neuralgic reform - that of the Greek state budget - during the financial crisis period and within the clashing rocks of the Greek politicians and the Troika. The objective of the reform is - or should be - common for both parties: the improvement of the budgeting function in a period of scarce resources and extensive austerity. Their different motives, though, define the progress and orientation of the reform. The study contributes to the research agenda regarding public sector accounting reforms and the choices of accounting tools during periods of financial crisis, and explores the conflicts between Greek resisting politicians and a demanding group of external fund providers, on the setting of the Greek state budget reform. The progress of the reform is viewed through the lens of the resistance to change theory and the resource dependency theory. This theoretical framework is supported by the relevant primary sources (IMF, EC, Greek Ministry of Finance reports, the Memoranda of Understanding and the reviews of their progress) and informed by the outcome of interviews and informal discussions conducted with five Greek politicians. We conclude that politicians resisted to change by showing an attitude that did not facilitate the reform process and permitted the creation of significant delays in the implementation of reforms agreed with resource providers. We attribute this behavior to ideological objections as well as practical pressures originating from citizens, and the opposition that put in danger their elected position.