‘Soft’ co-ordination meets ‘hard’ politics: the European Union and pension reform in Greece

Abstract

The paper examines the process of pension reform in Greece in the context of the ‘soft’ policy constraint (on structural reform) emanating from the European Union. It argues that the EU stimulus to reform complemented a set of domestic pressures. However, the domestic system of interest mediation has largely thwarted reform. The reform process is marked by a strong configuration of institutional conditions undermining the will and capability to adapt. Negotiation reflects a game of ‘non-cooperation’, with those currently privileged fearing zero-sum outcomes and constituting powerful veto-players. Strategies of concertation have proved unsustainable, whilst unilateral approaches by government have failed to build coalitions and offer sufficient incentives. An acute problem of governance prevails, threatening Greek interests in the EU and the Union's ability to co-ordinate economic reform across an increasingly diverse membership.