Economic Adjustment and Financial Reform: Greece's Europeanization and the Emergence of a Stabilization State

Abstract

In a brief part of the 1980s and throughout the 1990s, Europeanization, more in the nominal-macroeconomic than in the structural sense, was the most pronounced economic objective of Greek governments. This objective was pursued mainly through extensive reliance on monetary austerity predicated upon financial liberalization, and through the transformation of the growth state into a stabilization state. Macroeconomic policies were aimed at triggering the disciplinary mechanisms that would facilitate structural adjustment by eroding domestic sociopolitical resistance. A principal strategy employed for transforming a growth state into a stabilization state was one of surrendering government control over finance to the regulatory authorities of an increasingly autonomous central bank and to the allocative functions of a rapidly internationalizing market.