Abstract
Greece’s economic crisis is a by-product of a deeper institutional, political and societal crisis. The crisis brought about a bailout programme conditional on fiscal and structural reform, as set forth in three successive memoranda of understanding between Greece and its creditors. The domestic political class accepted these memoranda, albeit reluctantly. After the initial response with its populist overtones and the subsequent long and tortuous process of adjustment, the country now seems close to a consensus on a minimum reform agenda. However, Greece needs a change of paradigm: a shift away from deep-rooted attitudes that have impaired the country’s tremendous potential, to a culture of reform and growth. Its political leadership has to come up with a plan, one embraced by the people, that will push the country out of the current catastrophic interlude and lead it into a new virtuous cycle.
Highlights
In 1974 Prime Minister Konstantinos Karamanlis launched the most ambitious modernisation programme in modern Greek history
The peaceful restoration of democracy and Greece’s entry in 1981 into what was the European Community ushered in a virtuous cycle that brought about political stability, institutional reforms and economic growth
When Karamanlis’s successor Andreas Papandreou took over the premiership in 1981, he opted to discontinue the ambitious reform project started in 1974. He adopted a populist approach to government, which turned the state bureaucracy and public administration into the spoils of party politics. He put off much-needed structural reforms in critical sectors such as education, healthcare and social security
Summary
When Karamanlis’s successor Andreas Papandreou took over the premiership in 1981, he opted to discontinue the ambitious reform project started in 1974 Instead, he adopted a populist approach to government, which turned the state bureaucracy and public administration into the spoils of party politics. He adopted a populist approach to government, which turned the state bureaucracy and public administration into the spoils of party politics He put off much-needed structural reforms in critical sectors such as education, healthcare and social security. Instead of becoming an agent for economic growth and institutional reform, the civil service and public administration functioned for the benefit of the clientelistic networks of the governing parties.
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