Europe's Greece: a giant in the making

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Europe’s Greece

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Europe’s Greece A Giant in the Making

AKIS K ALAITZIDIS

EUROPE’S GREECE

Copyright © Akis Kalaitzidis, 2010. All rights reserved. First published in 2010 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN: 978–0–230–62183–1 Library of Congress Cataloging-in-Publication Data Kalaitzidis, Akis, 1969– Europe’s Greece : a giant in the making / Akis Kalaitzidis. p. cm. Includes bibliographical references. ISBN 978–0–230–62183–1 (alk. paper) 1. European Union—Greece. 2. European Union—Membership. 3. Greece—Economic policy—1974– 4. Greece—Politics and government—1974– 5. Greece—Foreign relations—1974– I. Title. HC240.25.G8K35 2010 320.9495—dc22

2009017440

A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: January 2010 10 9 8 7 6 5 4 3 2 1 Printed in the United States of America.

CONTENTS List of Illustrations

vii

Acknowledgments

ix

1

Introduction

1

2

Post-Dictatorial Greece: Democratization and Transition to Socialism and Beyond

19

Beyond Political Parties: The Politics of a European Identity

43

4

Beyond Politics: Society and the State

59

5

Greece: A Country of Paradoxes

81

6

The Paradox of Public Policy and Politics

101

7

Greece’s Foreign Policy Paradox

125

8

Trends and Prospects

149

9

Epilogue

173

3

Notes

183

Bibliography

197

Index

215

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ILLUSTRATIONS Figures 7.1 7.2

The changed nature of foreign policy in Europe Internal polarity, external polarity, and state preferences

128 129

Tables 1.1 2.1 2.2 3.1 3.2 4.1 4.2 5.1 5.2 5.3 6.1 6.2 6.3 6.4 6.5 6.6 8.1 8.2 8.3 8.4

Options of Europeanization Election results 1993–2004 Results of the last two parliamentary elections in Greece National ID Cards in selected EU Members Public Policy priorities in Greece Policy transfer to EU by sector Strikes in Greece Member States compared by population, complaints, and infringement proceedings opened in 1983–1999 Do you think you are well informed or not about European political affairs? For each of the following statements about the EU, could you please tell me whether you think it is true or false? Importance of guaranteeing basic needs for all GDP growth from 1975 to 2007 Greek public’s economic expectations compared to other EU states Total household consumption expenditure per capita (PPS) Education levels, 2006 data GDP per capita in Balkan Countries (PPS) GDP per capita growth in Economic Tiger economies Growth rates in new member states of the EU GDP per capita in selected EU members Innovation indicators for medium and small size economies

11 33 38 47 57 61 74 85 93 94 109 110 111 112 119 120 150 156 161 171

viii

ILLUSTRATIONS

Graphs 6.1 6.2 8.1 8.2

Unemployment levels in Greece from 1996 to 2007 Gross national incomes as percentage change World competitiveness ranking of Greece, 1993–2006 Lisbon agenda: Number of targets attained (out of 17)

112 112 158 159

Maps 8.1 The Delta Model of economic development 8.2 Greece’s potential global production network chain

167 169

ACKNOWLEDGMENTS W     E   T University, I was fortunate to have benefited from the advice and guidance of several intellectual giants. My professors as well as visiting scholars were the source of many lively discussions regarding my native Greece’s membership in the European Union (EU). These discussions were always challenging and enlightening, even when not particularly flattering in their assessment of Greece’s prospects within the EU. Yet the more I looked at the process of building the EU, the more convinced I became that Greece not only benefited enormously by this membership but also slowly transformed itself into the thirty-fifth largest economy in the world. These changes brought enormous repercussions for Greek society and politics as well as its relations with its neighbors. This book thus became an effort to trace the development of Greek politics, economics, and society as a member in the EU while attempting to offer some tentative thoughts on the future of the Greek economy, provided the international financial situation does not further deteriorate. In this venture I received positive reinforcement from my friend and intellectual father Kyriakos Kontopoulos, who discussed the early parts of this project. Professor T. Couloumbis was the spark for this project with his timely observations on the progress achieved in Greek foreign policy in the Balkans as well as Greece’s position within Europe. My advisors Richard Deeg and Nikos Zahariadis have each supported various phases of this project with much-needed intellectual and moral support. I also benefited from the comments of an anonymous reviewer and a review provided by Professor Thomas Doleys. A great deal of debt is owed to my friend and colleague Gregory Streich, whose comments on earlier drafts have benefited this book tremendously. There are no words to express my gratitude for his selflessness and friendship—I only hope to be able to repay this debt soon. Keshav Bhattarai, geographer extraordinaire, is responsible for the maps in this book. My colleagues at the University of Central Missouri, James Staab, Shari Bax, Darlene Budd, and Henry Wambuii, have been more than patient and

x

ACKNOWLEDGMENTS

deserve many thanks for their support and help through these two long years. This book would not have been possible without the help of the very capable Julia Kerr, our office professional, and several conscientious and hardworking students who helped me through this project: Swetha Bodla, Alex Klang, Nagarjuna Gogineni, Joshua Anderson, Orlando Diaz, Scott Kieffer, Wilbur Lively, and David Bock. The Office of Sponsored Programs at the University of Central Missouri generously provided funds, which made research and travel possible. Finally, this book is dedicated to my family and friends, especially to my wife Peggy and my children Miltos, Alex, and Jason, because the time spent writing this book was time away from them.

Chapter 1

Introduction P  G      G . It could be the result of a rather pessimistic stand in the Greek psyche dating all the way back to Sophocles. It could also be argued that it is a rather new phenomenon, a result of the political turmoil that followed World War II. Nonetheless, an ever-growing body of literature points out significant shortcomings in Greek policymaking (for details, see Featherstone 2005). In a rather sweeping generalization, Allison and Nicolaides called the disparity between Greece’s promise and its performance the “Greek Paradox” (Allison and Nicolaides 1997). True to form, several pieces of significant research dealing with the Greek government argued that it is bloated, inefficient (Sotiropoulos 2004), and corrupt (Pagoulatos 2003, Eleftheriadis 2005). These arguments are also reflective of how the media treats the Greek policymaking process.1 Nonetheless, the Greek public seems to take it all in stride. Citizen attitudes in Greece are generally pessimistic, but it is only one point higher than that of the EU average as shown in the most recent Eurobarometer.2 However, one cannot dismiss the glumness regarding the future that permeates the population as a whole.3 Looking at the historical development of the country one notices that Greece has improved significantly and has morphed into a first-rate liberal democracy with a good economy.4 Putting aside a general feeling that the government could do more for its people (which, in all fairness, one could probably encounter in every country in the world), does a large gap exist between promise and performance? This book argues that there is no gap between promise and performance. Greece’s Europeanization is progressing rapidly these days, albeit after a slow start, the economy is booming, and although several areas of public policy may need improvement, the country has shown signs of tremendous progress in the past decade. Moreover, Greece has been freed from its foreign policy paradox, as will be discussed in chapter 7, and has been taking small but steady steps toward becoming a cosmopolitan civil society.

2

Europe’s Greece: A Giant in the Making

Why Greece? Though the original question in Allison and Nikolaides’ book was raised as the result of a conference and was mainly directed toward the less researchnuanced general public, their research has merits because it encompasses both an interesting case study and a particular point of view, that is, the fact that Greece, which is billed as the cradle of Western civilization, finds itself in category B of European nations both economically and politically.5 Nevertheless, the question merits attention first on the same basis as other interpretive and hypothesis-generating case studies that attempt to highlight the impact of Europeanization upon a single member state (Lijphart 1971). These types of case studies have their methodological problems and should adapt and use more comparative tools (Lees 2006), but on the surface the use of case studies and single-country scholarship is thriving. Bennet and Elman argue this situation exists because “Most mainstream qualitative methodologists have different ontological and epistemological commitments, and these produce a discrete set of methodological injunctions” (Bennett and Elman 2006). In such a single case study, Radaelli and Franchino argue that there is such a thing as “Europeanization Italian Style” (Radaelli and Franchino 2004), thus highlighting the value of single case studies in general. The authors also remind us that the state of Europeanization research suffers from methodological problems such as separating the impact of Europeanization per se from the impact of purely domestic as well as global decisions. In addition, a more prominent methodological error is that the EU is considered an actor of high saliency and effectiveness (Radaelli and Franchino 2004). In a recent work, Trine Flockhart divides Europeanization into narrow conception and broad conception. Thus, in a narrow conception there is uploading (institutional changes to the EU from the member states) and downloading (impact of the EU on domestic policymaking) of policies and decision-making leading to institutional changes and behavior modification. Meanwhile, Europeanization in the broader sense means that there is a large impact on the process of culture, political organization, and life in general across Europe and its adjacent areas (Flockhart 2006). Therefore, they develop what they call “bottom up Europeanization” in their research (Radaelli and Franchino 2004). Radaelli and Franchino are clearly part of the narrower conception of Europeanization as they attempt to systematize and rationalize the process of Europeanization (Radaelli and Franchino 2004). They note: We start from the analysis of the system of interaction (actors, resources, problems, style, and collective problem solving rules) at the domestic level and we raise the question whether the EU affects this system of interaction and if so in what way (as a resource, as a reformulation of the problem, as

Introduction

3

a new set of collective problem-solving rules, as a constraint on what is feasible, as an alteration to the opportunity structure, as a new frame of reference, etc.). This way we do not prejudge the role of Europeanization.

The authors go on to develop a set of questions on the Europeanization of political elites, political parties, local government, interest groups, the economic system, and the welfare state (Radaelli and Franchino 2004). Similarly, I have developed the following questions regarding the Europeanization of Greece, which include some of the questions developed by Radaelli and Franchino. The question of how Europeanization affects political parties is key to understanding the development and consolidation of Greek democracy. The issue of change in political party composition and policy positions as well as the response by Greek politicians to these changes could be an indication of the impact Europe has had on the political system of Greece. To answer the question of how Europeanization has affected political parties and politicians in Greece, one has to look at the historical transformation of party platforms and the type of professional politicians who are involved in these parties. In addition, one has to consider the types of issues that these political parties and their corresponding members face to examine whether or not there has been a qualitative change on the issues. Yet one may not disengage the specific issue from the larger implication: what is the impact of Europeanization upon the national party systems? Mair has argued that the impact of Europe on national party systems is limited but admits that he is not looking at inner party fissures that may have developed as a result of Europeanization and the state of inner-party competition, which is vital to understand the party consolidation that has taken place in Greece (Mair 2000). Along the same lines, but more broadly focused on society, one way to examine the impact of European membership on Greek society is to evaluate the responses of political elites to “downloading,” or, in general, to outside stimuli. Most importantly, there should be a discussion of politics either as defined by Laswell’s adage “who gets what when and how,” or politics as societal conflict. In such an attempt the impact of European membership upon elites representing more than political parties or ideologies but of different societal groups must be considered. Especially since Greece represents a statist and corporatist model, certain socioeconomic groups have the ability to interfere with the economy or to shape societal debates (Pagoulatos 2003, Lavdas 1997). In the case of European elites, as Flockhart argues, there is a wide disparity between elite and mass attitudes toward Europeanization, and this affects the process of uploading and negotiation as well (Flockhart 2006). A recent example of how the states negotiated the Economic and Monetary Union shows how the member state leadership influenced this

4

Europe’s Greece: A Giant in the Making

process (Dyson and Featherstone 1999). Nevertheless, viewing the process of member state societal Europeanization from the bottom up, one has to include both the elites and the mass public’s attitudes toward this process and ask the following questions: How do different groups respond to Europeanization? Who are the winners? If there is such a designation as losers, who are the losers? What are the compromises and how does this impact the politics and society in Greece? In addition to the two areas of interest above, I will examine the state of the Greek economy. Knowledge of the economy is vital to understanding the development of Greece in the past quarter of a century because it is intricately linked with “who gets what and how much of it.” In addition, the economy has been in the forefront of change in Greece. Liberalization came as a strategy of change, of breaking with the past and specifically adapting to Europe. One can safely argue that, as a result, political parties (at least the ones in the left) have certainly changed their socialist outlook and have toned down their ideology, and, as mentioned above, society has reluctantly followed, and this has to do with the gains and losses that such changes entailed. It has been argued by Borzel that noncompliance to policies by member states in the EU may be because there is a misfit between European and domestic policies (Borzel 2001), but this does not necessarily mean there will always be a noncompliance with EU regulations or directives by necessity. Borzel found that if significant actor mobilizations demand the alignment between domestic and European agendas, then there is policy change (Borzel 2000). It is therefore important to attempt an explanation not only of the social groups, as described in chapter three, but also to distinguish the veto players in the political arenas and their impact on economic policy or on the Greek economy as a whole. Last but not least, we must consider which sectors of the Greek economy, if any, have witnessed transformations due to European integration and, if possible, offer an overall assessment. In order to provide a meaningful analysis of Europeanization, I will follow Radaelli’s typology of measuring four outcomes of the process. His typology borrows from cognitive psychology and measures Europeanization by looking at four elements: (a) Interaction; (b) Robustness; (c) Equilibration; and (d) Discourse (Radaelli 2003). Interaction measures the institutional interaction between national and supranational institutions. Robustness measures the permanence of change in the institutional structure after it comes into contact with its supranational counterpart. Equilibration measures rethinking and adjusting of the national institutions vis-à-vis the supranational ones. Discourse measures the impact of the national level at large in the legitimization and acceptance of the new institutional existence. Although there are several other ways of examining Europeanization, especially in terms of outcomes and institutional adaptation, for the purposes of a macroanalytical

Introduction

5

case study the elements highlighted above should give the reader a structured lens with which to view recent developments in Greece. In the end, as Featherstone points out, what happens in Greece matters for our understanding of the process of Europeanization and the future not just of Greece but of the European Union project as a whole (Featherstone 2005). Alternative Explanations of Greece’s Performance There are several issues surrounding the assessment of policy performance in any state, and in the case of Greece there have been many studies across disciplines attempting to access the societal, economic, and public policy performance. One must consider the parameters of the evaluation process in order to provide a consistent evaluation of the policy processes. In the case of Greece, consideration should first focus on the issue of identity and to understand the country’s unique position within the European Union. Second, the inherent conflict between statism and capitalism must be considered in order to fully account for the structural changes in Greece. And third, the pressure of Europeanization highlights the institutional reform issues reflected in what was titled the modernization effort. In his famous work on the clash of civilizations, Samuel Huntington places only two of the current twenty-seven members of the European Union as part of another civilization, Greece and Cyprus (Huntington 1993). Huntington’s assertions have been criticized by many, yet, in the case of Greek self-identification he is right. Insofar as the civilizational model being associated with religion, the idea of “Greekness” is not entirely outside the Huntingtonian scope given the fact that the Greeks believe themselves to be unique within the European Union. Scholars have argued that Greek religious homogeneity and communitarianism strengthens the population’s sense of exclusiveness (Pollis 1987, Stamoulas 2004, Molokotos-Liederman 2003). Yet modern Greece’s state and ideology are products of the spread of the nationalist French revolutionary ideas, which is not a unique phenomenon. In addition, the argument can hardly be made that the best classification of an entire civilization would be along the lines of religion, even though it is a strong indicator of cultural unity. Cultural boundaries are constantly being challenged, and in the case of Greece more so because of its membership to the EU. Greece is the recipient of a large volume of immigrant population, much of which is not Diaspora Greeks. Consequently, the country is currently grappling with immigration, assimilation, and multiculturalism issues in what some called the “Multicultural upheaval in Greece” (Ankara papers 2004b). Multiculturalism has highlighted both the resistance to change by a large part of the population and the fissures created as a result of mass immigration to the country.

6

Europe’s Greece: A Giant in the Making

It is important, however, to remember that because of this multicultural trend, researchers today may treat pre-dictatorial Greece differently than post-dictatorial Greece (Alivizatos 1999, Stamoulas 2004). Also important is the notion of an extended cultural relationship among the nations in southern Europe. The growth of economic interdependence (Petrakos 1997, Labrianidis et al. 2004) coupled with cultural affiliation reinforces new expressions of identity and creates new communities, imagined and not (Smith 1988, Anderson 1991). The most interesting example of this expression of an expanded community is the Balkan region, which the Greeks treat differently than the EU even though several states in the Balkans will soon be member states. Finally, identity is a key factor in the behavior of the state both internally and, more importantly, externally, that is, in this case within the European Union. Substantial differentiation exists within Greece, and as such it questions the assumptions of both Huntington’s thesis in general and also those who argue that religion and Greek culture are completely intertwined. One can hardly argue in favor of a monolithic approach to identity and civilization if the definition is vague. It is, however, important not to dismiss the impact of religion/culture upon the behavior of the state and to remember that religion and culture are important components of the statist nature of Greece. Traditionally, the state has been blamed for many of the ills plaguing Greek society. At least one researcher relates the state’s role in modern Greek society to its cultural/religious roots by arguing that the “use of collectivist language with passionate references to the importance of the national group had been very frequent in speeches and declarations of Greek politicians ever since the modern Greek state was created” (Stamoulas 2004, 489). Statist ideology, therefore, protects the cohesion of the country as a whole against unwanted ideologies and groups as used by the Greek social conservatives. However, statism also protects the social cohesion of the country by enabling a higher degree of economic redistribution. Either way the state became an important vehicle for promotion of ideology no matter what location on the political spectrum it came from. Naturally, statist ideology interfered with laissez faire capitalist practices and created somewhat of an immovable object on the road to modernization. The Greek state is seen as an obstinate element fed by a weak civil society. Illiberal ideas (Kitromilides 1978), powerful elites (Diamantouros 1972), and belated social class consciousness (Mouzelis 1986) led to strong statism and subsequently to the “backwards” element that prevented Greece from achieving its peak performance. Populism and interparty antagonism are credited with preventing the economic and social development of Greece (Mardas, 1992, Haralambis 1989, Spourdalakis 1998). In addition,

Introduction

7

a bloated bureaucracy (Sotiropoulos 1996), rent-seeking behaviors, and what in Greece is known as “Diaplekomena,” that is, special interests that receive extraordinary attention from the state (Pagoulatos 2003, Lavdas 1997), are also to blame for the weak performance of Greece. By all accounts, however, Greece has increased its per capita GNP, reaching a fairly healthy level. Modernization is by no means complete, but several institutions and behaviors have changed. Even though several structural issues remain obstinate, such as pensions, health care, and tertiary education policy, life in Greece has substantially changed as a result of increased liberalization in traditional state sectors such as banking, transportation, and the media. Membership in the European Union is generally credited as the factor propelling change. Even though Greece is oscillating between more liberalization and convergence to the European norm, on the one hand, and retrenchment in the traditional statist mode, on the other, there has been substantial progress in several functional areas. Several reform packages have been defeated by coalitions of special interests and so far politicians have been unwilling to accept the high political cost associated with these reforms. Kazakos, therefore, concludes that “. . . the implementation of European requirements is likely to be ineffective, if core national structures are seriously challenged” (Kazakos 2004, 916). However, the pressure of Europeanization would be expected to break through the barriers of statist persistency. Yet, in regard to regionalism, bureaucracy, interest groups, and other areas of the Greek system, some have argued that pressure has produced uneven results (Kalaitzidis 2004, Sotiropoulos 1996, Lavdas 1997). The unevenness of the outcome is what makes the Greek case interesting, because this Europeanization process did not produce uniform results but created tremendous improvement in certain areas and tremendous resistance in others. This research does not expect to show a uniform outcome, but to explain the differences in the outcomes of public policies throughout Greece’s post-dictatorial era and, most importantly, in the past twenty years. The author does not also believe that there is a simple monocausal answer to such complex phenomena, yet an account of the recent developments in the country may provide useful empirical data for researchers who propose alternative and sometimes competing explanations. Europeanization Processes It may appear all too natural these days to refer to the “Europeanization process,” as if this term magically supports the claim of the weakening of the state or even renders the state obsolete in the long run (Marks et al. 1996, Hooghe 1996, Marks et al. 1996b, Hooghe and Marks 2000). If, therefore,

8

Europe’s Greece: A Giant in the Making

the process is complete, one would expect to find that the state has greatly weakened in its traditional policy areas and that newly formed European levels of authority have co-opted these areas of responsibility and are now operating in these capacities. It might, however, be more productive to think of the European level in the same way that Cowles, Caporaso, and Risse think when they argue that Europeanization is defined as: “the emergence and development at the European level of distinct structures of governance, that is, of political, legal, and social institutions associated with political problem solving that formalize interactions among actors, and of policy networks specializing in the creation of authoritative European rules” (Cowles et al. 2001, 3). I argue that the Europeanization process is a complementary process, in which certain boundaries exists that may restrict the member state activities, and in which a range of formal policies may be adopted and produce differential outcomes. For Cowles et al., Europeanization is linked to the changes in the domestic structures of the member states. They establish a framework to take into account the effects of Europeanization upon domestic politics and identify its three relevant steps. Step one is all relevant Europeanization processes. Step two is the “goodness of fit,” naturally taking into account cases that differ along the cultural/institutional spectrum. Researchers argue that as a result of the variation of the goodness of fit there will be variations of the domestic structural change. The third step takes into account important mediating factors such as multiple veto points in the domestic structure, facilitating-institutions, and cooperatives cultures (Cowles et al. 2001). In this scheme, multiple points of veto act as impediments to domestic structural change, while facilitating-institutions and cooperative cultures may be more amenable to change. Even as these mediating factors exist they have to be weighted against the different domestic structures that exist in member states, which almost inevitably would explain the variable policy instruments and outcomes. For researchers attempting to explain whether convergence or divergence exists within the EU due to the goodness of fit, it is especially important to separate instruments and outcomes (Riise and Borzel 2003). In the case of instruments, Riise and Borzel use the concept of “goodness of fit” to explain why there would be domestic change because of the European Union and what kind of change it would be. They identify Absorption, Accommodation, Transformation, or Inertia as the possible outcomes of the pressure brought upon the differences in the goodness of fit between European institutions and policies and their domestic counterparts (Riise and Borzel 2003). My analysis claims that the outcomes may be similar or may at least converge, but the instruments of policy processes will not, or if they do, there will be a limited or clustered convergence, that is, similar political systems may

Introduction

9

experience similar pressures of fit. Moreover, the pathways that are followed to get to the described outcomes are related to rationalist and sociological institutionalist frameworks. Obviously the rationalist and sociological pathways describe different outcomes, and even though they are not mutually exclusive they are sequential. Since, for example, the Greek socialists had a radical agenda to begin with (as explained in chapter 2), they found themselves at odds with several EU institutions, more specifically, in relation to financial, defense, and foreign policy issues. As in the case of the French socialist party (Riise and Borzel 2003), the Greek socialist party had to alter their agenda substantially in order to achieve basic demands and negotiate resources that otherwise would not be available to them. In the course of the adaptation, the Socialist Party of Greece (PASOK) transformed itself from a clearly leftist/radical party with an agenda to transform the Greek political landscape to a more centrist, pragmatic and cooperative European party. This change includes both a rational institutionalist pathway that is followed by the sociological pathway and leads to the eventual transformation of the entire left-leaning spectrum in Greek politics. There is, however, another effect that institutional misfit can have on both instruments and outcomes in the domestic arena, namely, retrenchment. Radaelli considers this to be a very paradoxical effect, since in the case of Italy it produces more intervention rather than the intended liberalization by strengthening the domestic coalition opposing reform (Radaelli 2003). In the case of Greece, institutional misfit certainly produced retrenchment, but it also produced centrifugal forces in institutions under great pressure (such as the political parties and education, to name a couple) in which a large percentage opts to accommodate the changes and a smaller percentage radicalizes in opposition, thus adding veto points in the system. One must, however, keep in mind that because it has been argued that there has been a fusion/diffusion between domestic, international, state, and societal boundaries, works that deal with the process of Europeanization must account for the autonomy, the capacity, and sometimes the rationality of the state. If European integration changes these types of features, the state then has a true transformative experience, and thus Europeanization is expected to impact the members of the European Union heavily. Yet it seems that this is not the case. Moreover, not only is the impact of Europe upon the individual characteristics of member states hard to measure, but studies that attempted to measure this impact found that it is differential in nature (Herritier et al. 2001, Knill 2001). It is thus important to recognize that an approach that recognizes the fact that states will develop differentially with the EU is applied, especially in the case of Greece, which, as explained in the previous section, had significant challenges to deal with

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Europe’s Greece: A Giant in the Making

from the start of its membership. In my research, therefore, it is less useful to attempt a micro explanation of the processes of convergence, goodness of fit, or the interaction between uploading and downloading, because not only is it futile to expect it (Holzintger and Knill 2005, 792) but also because there is so much national variation we would be better served by looking at particular nationally based explanations of Europeanization. Focusing on national adaptation to certain European institutional structures, but most importantly in total transformation of society, if that is the case, will give the reader a better understanding as to the direction of European integration as a whole, instead of the more narrowly focused policymaking transformation. Therefore, research that looks at Europeanization need not discount cultural and historical explanations due to their methodological difficulties, since most of the time they ultimately look at the broader implications of Europeanization, such as the future of European integration. In this sense, it is best to combine both policymaking explanations but ground them in the larger societal and historical context in order to better describe the potential variation. Adaptation, Resistance, and Retrenchment: The Case for Upward Structuration It is one thing to say that Europeanization produces domestic change because of the pressure exerted from above (in which case the state is not more than just another minor actor in what could possibly be a very long list of forces). It is quite another thing to say that the pressure to Europeanize is mitigated within the state itself, the state, being a major player in the process, deciding to fall in line, pretending to accommodate the EU by building paperstructures, or opting out altogether. The fact of the matter is that the state, having preceded the EU historically, has developed mechanisms to deal with endogenous and exogenous stimuli. The state does not exist in a vacuum, so it does not deal with one stimulant at a time. It deals with a multitude of forces—global, regional (EU), bilateral, internal, subnational—at once. In a sense, for example, to argue that Europeanization drives the transformation of the European state carries the same weight as to argue that Globalization does the same thing. Obviously, it is hard to distinguish one force’s effects from the effects of another. And while most studies are more nuanced than this question points to, in the end Multilevel Governance theorists do see a process of the regionalization of the European member states with a massive loss of power for the latter, while the Intergovernmentalist theorists see the continuation of state power. `My argument is that although the nature of the European state and, in particular, the nature of state administration may be changing, the state is

Introduction

11

Table 1.1 Options of Europeanization EU Change driven by supranational institutions Driven

Q1 (Neo-functionalism) Yes/Yes

Q3 (Intergovernmentalism) Yes/No

State Change domestically

Q2 (Multilevel Governance) No/Yes

Q4 (No Integration) No/No

still driving the integration process and has more than one choice regarding how to react/respond to it. Table 1.1 examines the relationship between EU and state policy process in regard to administrative change and choice. What is interesting about this table—besides the fact that most studies, including this one, deal with the top half of the table rather than the bottom half—is the recognition that states and supranational institutions have a choice whether to adopt or to disregard the changes. The table also recognizes the fact that states may initiate domestic change responding to other stimuli than the EU supranational institutions (third quadrangle). As the EU moves forward with its constitution and the “federalization” of Europe, the options available to the member states could become the most interesting aspect of the Europeanization (re: quasi-federalization) process. Furthermore, in the same manner, the fourth quadrangle would be important in the case of change driven from outside the EU and its member states (globalization, intense competition among regional blocks or megapowers). In the first quadrangle, of course, the change is driven internally and achieved by coming together with other states, much like what functionalism predicts. The existence of a significant number of functional areas that could be serviced by their coming together would drive further changes. Quadrangle two describes a situation where supranationally driven change is rejected by the member states that have the following options: (a) comply, (b) opt out, or (c) extend token gestures. I suggest that the choice of adapting to supranationally requested administrative change depends on the state’s developmentalist plans and is also path dependent. The step-by-step integration process may be the reason behind the disagreement between neo-functionalists, multilevel governance theorists, historical institutionalists, and intergovernmentalists, given the fact that these scholars are looking at the same process. However, they draw different conclusions, with some looking at the process from its end point (e.g., functionalists and historical institutionalists) and seeing an Aristotelian entelechy, and others looking at the process from its starting point (e.g., intergovernmentalists and multilevel governance theorists) and seeing it as a Zeno’s

12

Europe’s Greece: A Giant in the Making

paradox, unable or unwilling to see its upward spiral direction. In my view, European integration is the result of upward structuration (emerging complexity); that is, the stepwise creation of binding European institutions every time the process moves forward in spurts. Seen macroscopically, this process has been more or less continuous even in the age of Euro-stagnation and Euro-skepticism. The process, however, is by no means linear or consistent in speed. Therefore, it appears at certain points that the EU has created a new institution, whereas, in reality, if one sees the totality of steps taken, the EU is working at building a strong confederation in the intermediary term. The reader may think of this as the same process of building a square castle by different crews on all four sides. It may even appear at one point that the castle is finished when the front building crew has reached a certain height, but one cannot make that determination without looking at all four sides, as well as what the intentions were with regard to height and functionality. Obviously, I argue that Europeanization is not a “sand castle” and cannot be swept away as easily. I also argue that it is path dependent. As the institutional building progresses more and more, steps of the process become even more binding and increases the sunk costs, which could be a cause of concern for those wishing to stop building. A critical point is reached when the structure is minimally complete and overdetermining, reaching the tipping point at which the power would shift definitively from the state to the supranational authority. Supranational structure is more than the sum of its parts, that is, EU institutions taken separately; moreover, it is not additive, but multiplicative, concatenated. Perceptions of the absolute necessity of European integration in view of the globalization process, the competitive weakness of single European states in the global economy vis-à-vis the United States, and the emerging Chinese superpower undoubtedly reinforce the cautious willingness of state elites to invest more authority to European institutions within the EU. Consolidation of “European production networks” already proceeds along these lines. The transfer of power required for the tipping point to happen is not necessarily at halfway, as is evident from corporate governance (which has been understood as an “oceanic game” by game theorists) or from the workings of global hegemony in the postWestphalian world. The transfer of power may not even be at 40 percent, yet it has certainly not been reached. One thing is certain: every step taken near the “tipping point” is not only an added constraint, as previous steps have been, but a sure sign of inevitability for the new state of affairs. Whether a weak or a strong confederate state, or even an outright federal state, is going to be built is as yet unknown. Therefore, an analysis of how Greece has adapted to the changing external stimuli, how its policymaking process has changed internally, and what types of uploading the country has attempted toward the supranational

Introduction

13

institutions can serve as a critical case study highlighting the importance of the concept of upward structuration in order to explain the differences in policymaking throughout European member states as well as their (un)willingness to go further with integration or their decision stop at the present arrangement. It becomes clear, in this study, that in the case of Greece the uploading happened more in the area of foreign policy while the downloading is more evident in the area of domestic or public policy. Overview This book attempts to entertain the major question: “is there really a Greek paradox?” Allison and Nikolaides (1997) argued that Greece’s performance does not match its promise. In order to even begin attempting to answer this question, one has to consider the larger implications regarding what it is that Greece is supposed to achieve, given that it is a rather small country with a medium sized economy and a rich, sometimes turbulent, political past. The easiest way to partially shed some light on our question is to examine the impact of European membership on Greece as a society and as a culture and examine some of the changes in its institutions and policymaking mechanisms. Chapter 1 considers theories of Europeanization in an attempt to outline the way one can look at the Europeanization of Greece and delineate the parameters of what types of institutions, policymaking mechanisms, and other societal changes should be (or should not be, as the case may be) considered. I also consider the particular explanations that have been offered thus far as to why Greece is mainly failing to achieve a better performance and attempt to draw attention to what this really means for the larger European project, namely European integration. The second chapter focuses on setting up a historical timeline, which helps readers understand the sociopolitical and economic developments that follow the immediate aftermath of World War II, the collapse of Greek democracy, and the advent of the military Junta. I will examine both the impact of the Greek Colonels’ Junta on society as well as some of the cultural debates that were born at that time in both political and economic strata, such as governmental intervention in both economic and moral issues facing the country. Basically, I show/argue that statism came of age in authoritarian Greece and it is not repudiated but heavily reinforced by the socialist model of PASOK. With the theoretical background set in the first chapter, chapter 2 will then examine Greece’s democratic consolidation and weigh in on the debate regarding Andreas Papandreou’s experimentation with socialist populism. Was it really a lost decade for Greece or was it a cathartic reaction on the part of society and its leaders? I will address some of the major points of

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Europe’s Greece: A Giant in the Making

view regarding these issues but will also offer an alternative explanation. More specifically, as PASOK-reinforced statism failed, as it did with many European socialist parties, it was too early and too close to the events leading to the democratization of Greece at that time for the Greek elites to appreciate the long-term impact on the economy. Chapter 2 further examines the development of political ideologies and political party platforms in Greece, as well as the breakdown of the electorate, and the mandates subsequent governments received from the public. It also reviews the failed neoliberal promise of the conservative party of Greece, Nea Dimokratia, which faced a path dependent highly on statist Greece and has so far failed to convert it. As I follow these strategies in this chapter, it will become evident to the reader that apart from the short-term opportunistic political strategies followed by PASOK and the seemingly inadequate governance of Nea Dimokratia, there are larger issues that speak to the heart of European social problems as experienced this year by the French when they attempted to introduce a labor law that threatened job security. Several dynamics are evident, such as European versus National Identity, business versus labor, veto players in the Greek political system, job security, intergenerational mobility, employment for the young versus the old in the job market, and their attitudes toward the future. The third chapter will consider the process of belonging to the European community for the Greek public and Greek elites. Greece’s EU membership was taken for granted by Prime Minister Karamanlis when he negotiated entry, and it continues to be an issue that is taken for granted these days. But this has not necessarily been the case with the public, or with the elites in the first decade of Greece’s membership. Identity issues are notoriously tricky to delineate but are necessary in order to understand the Greek process of adaptation to EU as an institution. Examining why Greece was admitted in the first place and how it performed in the past twenty-seven years will give the reader an understanding of the changing behavior of Greece within the larger community. It also highlights some social changes that are important in my discussion of the Greek paradox later in the chapter. Finally, the bottom line is that if, on the one hand, the EU is on a path to federalization, then a European identity is a keystone to forming this federation. On the other hand, if the EU is in a path to a quasi-federation, as I proposed in chapter 1, then identity formation is not as important and national identities will continue developing at the same rate as the particular side of the EU castle each country is responsible for. Chapter 3 further considers some of the major developments in Greek society that hint at the tensions of modernization. Several pessimistic accounts of Greece’s ultimate showdown with its past, given its position as a gateway between the East and the West, will be debunked. Huntington’s

Introduction

15

model of the clash of civilizations may be evident from the pressures of Europeanization and certain EU innovations, such as the issue of national identification cards that do not include religious affiliation. Even though debate raged in Greece, the Europeanists have carried the day. This not only questions some of Huntington’s assumptions but also several anthropological assumptions such as the uniqueness of Mediterranean cultures as a whole, the idea of their different sense of obligation, honor, or, even more specifically, the idea that the Balkan region in particular is so different that it will certainly never be Europeanized enough. Chapter 4 deals with the relationship between society and the state. Beyond the idea of self-identification within a larger political unit such as the EU, the relationships within Greek society are key to a better understanding of the paradoxes of Greek Europeanization. I review the changes in public opinion in Greece that have become very Europhile and federal in nature over the years. I then review the theoretical terrain of state-society relations and, finally, explore the development of this relationship from 1980 to the presented day, dividing the timeline into three distinct eras, the 1980s, the 1990s, and the present. In the 1980s, as indicated above, the state continued with its dominance over society while itself being colonized by the political party in power, PASOK. The dominance of the Socialist Party of Greece over the government produced the “lost” decade, that is, a decade of economic shrinking and societal upheaval that was necessary in order to right the political wrongs of the previous decades. In the 1990s, after a brief, tenuous, and ultimately unsuccessful conservative three-year rule, the socialists returned to power, but the Europeanist camp dominated the political process. The leader of PASOK died, and his reformist minded ex-minister of economics became prime minister. The new leader was committed to the Europeanization of Greece and led a somewhat successful change, albeit incomplete, to revamp the state while achieving a great deal in terms of foreign economic policy. Greece also entered an era of “normalized” relations with its neighbor Turkey and actively negotiated with its northern neighbor FYROM while also achieving entry to the Eurozone. There are drawbacks, however; the colonization of the state by the political party has not stopped and the negative outcomes from it, such as nepotism and corruption, eventually lead to PASOK’s defeat in 2004. The major findings of this chapter are that on a series of issues such as ideology and institutions, Greece has evolved by leaps and bounds in the past decade. Moreover, it seems that Greece is closely following its European partners in terms of business-labor relations, veto players in the system such as interest groups, and even in the area of developing a modern civil society, in which there is positive movement, albeit slower than in the economic sphere. The fifth chapter will pool the paradoxes that shape today’s Greece and elaborate on them. Conceptually this is a key chapter in understanding why

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Europe’s Greece: A Giant in the Making

Greece is often considered a laggard but with increasingly strong potential. First there is the paradox of the Greek society, which is similar to that of the other member states of the EU, yet remaining unabashedly parasitic, trapped in the statist model. The development of the Greek political system, its elite structure, the societal veto players, and the other features of the statist model are put in perspective. As suggested in the previous chapter, this is an easy gateway to presenting the full set of paradoxes that Greece as a country is facing. The chapter also explores the paradox of politics and policy in which even though Greece had a break with its authoritarian past, a democratic consolidation, and a political transformation, it remains trapped in the logic of the clash of civilizations, debating its existence as a garrison state in a Balkan peninsula that is tormented by retrograde tribal nationalisms and turbulent transitions, echoing a Middle Eastern behavioral pattern high on the victimization rhetoric. Chapter 5 will finally discuss the paradox of the struggle to become a prosperous European nation, which clashes with the previously mentioned impediments and reinforces some of the largely obstinate elements of the Greek culture. A brief example that will be explored at length in a latter chapter is the “merchant culture” or what I call the industrialization paradox. Greek investment in the Balkans and Eastern Europe has been shortterm oriented as opposed to a long-term industrial commitment. Greece is not the only example of this early Italian-style economic policy; even medieval European culture was apprehensive in making serious investment for future growth because of the uncertainty, which obviously also exists in the Balkans. However, the twenty-first-century Greek generation seems very comfortable with its new role as a core EU member state with enlarged responsibilities and expectations that the country is more than willing to meet. Thus the Greek economic model is changing, but there are still structural reforms to be undertaken. These paradoxes as mentioned in this chapter will be elaborated upon in the subsequent chapters and given extensive consideration. In the sixth chapter I consider the changes mentioned in the previous two chapters vis-à-vis the participation of Greece in the European Union. The EU has been an enormously influential force upon the country, which is devoting tremendous positive energy to become a key member of the EU. The impact of the EU upon Greece’s economy will be discussed first, followed by a brief discussion of high politics, as otherwise foreign policy interests are known, which I will expand upon with some detail in the next chapter. It is highly important that Greek pundits argue, given the electoral distribution and climate, that the political cost of change is very high and cannot be accepted by any political leader; thus, the expectation is that EU pressures to conform will be a welcome mechanism of modernization and

Introduction

17

a political “escape valve.” In this sense, the paradox works in Greece’s favor both socially and politically, giving a new generation of politicians of all political colors more leeway to maneuver Greece in the right direction. For example, as the pressure with youth unemployment, economic restructuring, and the pension situation increases, the Greeks will have to follow some of the same paths that large and small EU members had to take when faced with the same issues in a much older Europe that could not replace its labor force quickly enough to avoid a major crisis. The positive energies spent on the Europeanization of Greece by both political parties in power will certainly move Greek closer to the European core as well as force her to expand on her commitment to play a largely peaceful role in the Balkans. The paradox of Greek foreign policy is the focus of the seventh chapter. In this paradox, Greece has, mainly as a result of EU membership, advanced economically and has started developing postindustrial values. At the same time, a large proportion of the population remains unaffected, thus still harboring feelings of victimization that very recently proved fatal to the Yugoslav federation. In chapter 7 I discuss the ambiguity of EU membership, which contains “low” but not “high” politics, to use Haas’ analogy. While the Greeks mostly occupy themselves with non-foreign relations matters, they still remain imprisoned in their security dilemma, as expressed by their annual defense spending. Moreover, as this economic and political development happened, the security situation in the Balkans deteriorated and added to Greek insecurity, as evident in their behavior toward the Former Yugoslav Republic of Macedonia. The Greek government threatened and then implemented an embargo on FYROM in the early 1990s, and after more than a decade of stalemated negotiations it threatened and then executed a veto against FYROM’s membership in the NATO in 2008. The Greek-Turkish détente especially shows the strain on the part of the Greek state as well as a society that is called upon to walk a tightrope between the politically expedient need for the extension of good will toward Turkey and the need to be conservative and not overextend her support for Turkish accession to the EU without the necessary commitments to democracy and the rule of law. The strongest challenge to Greece’s developmental and foreign policy agenda will come from this area where identity forces (self-identification within Europe, “who we are statements,” etc.) show the strongest gravity and pull back to the claims of uniqueness as expressed in the first chapter. In chapter 8 I view Greece through the lens of “southern Europe” and assess its future potential. As Dennis O’Hearn said in his book on the Irish Tiger, tigerhood is largely a product of international circumstances (O’Hearn 1998). I argue that special handling of regions along with advance spatial and economic regional planning may turn a certain area of the world

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Europe’s Greece: A Giant in the Making

into a region of special interest. In the past the Irish republic as well as Denmark and, to a lesser extent, the Iberian Peninsula have received attention in what I call the “Antlanticist side” of a European developmental triangle. The Baltic countries with growth rates around 10 percent and other East European countries like Slovakia with 10 percent growth are now receiving tremendous attention as a special European region ripe for development with solid political systems and with plenty of economic opportunity. I have labelled these countries the East European side of the EU economic development triangle. Southern Europe will be the third side of what I will call the “Delta Model” of economic development countries, which have developed enough but which may still surprise the world by acting as gateways to business in the adjacent regions. After all, the same model of economic development was extremely lucrative for the Irish and is proving to be the growth engine for Central and East European countries (comparative data provided). The paradoxes discussed in the previous chapters possibly kept Greece from fully applying itself but created the necessary conditions for the country to fulfill the gateway role both in the Balkans and the Middle East. In my opinion, these paradoxes allow Greece to operate in both continents. And while in the short term these paradoxes may seem like impediments to development, when the international conditions are right these same paradoxes will be her biggest assets. In chapter 9, I pull together themes from the previous chapters and conclude with a more optimistic view of Greece’s position in the EU and, for that matter, in the global economy. I illustrate how far the country has come and suggest that, even though much remains to be done, Greece’s current position justifies a better outlook than being viewed as the European “south.”

Chapter 2

Post-Dictatorial Greece: Democratization and Transition to Socialism and Beyond T   G’    E U (EU) starts in 1981. But given that Greece as a European country has a much longer history, tracing the Greek path to EU membership a few decades prior to its 1981 accession is necessary because those years are important to understand modern Greece. More specifically, this chapter will briefly touch upon the rocky political existence of the Greek state after World War II, highlighting both the ideological divide that sent the country into a tailspin immediately after the war’s end, and the resurgence of several groups with the ability to dictate terms to the state. The first part looks at the Greek civil war while the second looks at the last military intervention in Greek politics. The third section discusses the Greek transition to democracy until the democratic consolidation that saw the peaceful transition of power from the conservatives to the socialists, while the fourth section extensively discusses the socialist era, its apogee, and its transformation. This cycle of political events, though thoroughly historical, will establish a timeline and partially explain some of the main peculiarities that the Greek political system developed over the years. Most notably, it will establish the roots and the development of the Greek dirigiste economic system, the foundation of its Byzantine bureaucracy, and the reinforcement of the active interest groups with extended veto power within society, which will lead to the next chapter that will discuss the transition’s impact on society.

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Europe’s Greece: A Giant in the Making

The End of World War II Brings Further Destruction A candidate country as a poster child of victims of the cold war would ideally be Greece. The country resisted the initial German attack with its limited resources and resisted the occupation, suffering severe consequences such as Nazi reprisals, a famine in Athens in the winter of 1944 that killed an average of 300 people a day, and the complete wipeout of the largest community of Jews in the Balkans in the port city of Thessalonica, numbering almost 50,000 people (Crampton 2002).1 The most important political developments, however, were happening inside the resistance movements and in the exiled government of Greece, which took up residence in Cairo during the war. The ideological divide was too much for the Greek resistance fighters, who divided themselves into left-wing and right-wing groups, with the left possessing more personnel and firepower. Consequently, in the spirit of the cold war yet to come, the Allied Powers, themselves divided along the liberal-communist divide, attempted to influence political events in Greece. This attempt to influence, and later to completely dominate, Greek politics shaped the postwar political system of the country and is only considered a historical legacy after the successful turnover of government in the 1980s when the major leadership of the political parties involved was either pushed aside by age or was dead. It is therefore a useful tool in illustrating where Greece was to begin with at the advent of its EU membership in the early 1980s and why, since one cannot examine the last two decades of Greek politics without considering at least partially the country’s past. The timeline of events includes the withdrawal of Nazi forces from Greece and the almost immediate clash between the dominant communist resistance group whose political wing was named the National Liberation Front and whose military wing was named the National People’s Liberation Army (EAM-ELAS) and the British forces. As Greece became liberated with the arrival of Georgios Papandreou (father of Prime Minister Andreas Papandreou, who led Greece in the 1980s and 1990s, and grandfather of current socialist leader Georgios Papandreou) in 1944, the communists fought the British forces in the streets of Athens in a battle known as Dekembriana even though they understood that by agreement Greece was to remain allied to the western liberal powers such as Britain and away from the eastern/communist powers such as the Soviet Union. The brief but bloody conflict ended with the Varkiza agreement in February 1945 whereby the communists agreed to surrender their arms, disband their army, and be given amnesty for political crimes. This agreement, however, did not mark the end of the civil war, which continued until 1949. In fact, from the sources within EAM, several historians conclude that the communists were not unanimous as to

Transition to Socialism and Beyond

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what the strategy regarding Varkiza should be, which led to the famous split within EAM and the continuation of resistance to the British by a smaller force led by Aris Velouhiotis (Close 2002, Mazower 1993, Clogg 1992). This complication, coupled with a campaign of “cleansing” the country of the communist element by the government and some rather unsavory nationalist organizations, and the inability of the British to think in less than absolute terms, produced a renewal of fighting that lasted until 1949. Famously, Winston Churchill, who visited Greece during the fighting in 1944, said that there would be “no peace without victory” (Mazower 1993, 371). In a sense, he got neither, and the British forces withdrew in favor of the Americans, who would now become the new superpower in charge of Greek affairs. In this regard “beware of Greeks bearing gifts” describes the Americans, considering that the United States came in with military aid and funds galore from the Plan for the Reconstruction of Europe, otherwise known as the Marshall plan. The Greeks did, however, insist, as one historian puts it, on receiving as much in return as possible from their new protectorate (Clogg 1992, 146). Before the new world superpower descended upon Greece, however, a tragedy of unimaginable proportions transpired, and it was undoubtedly a major crisis point that would affect Greek politics for the rest of the twentieth century. This tragedy reinforced local political identities by dividing the populations into the two ideological camps and contributed greatly to the immigrant movement from Greece in the 1950s (Laiou 1999). The winners not only “took all” in good old-fashioned Jacksonian-style American politics, but until the first socialist victory in 1981 excluded and sometimes outright oppressed the losers. Some have argued that exogenous factors in facilitating the coming civil war were the most important and should be assigned a rather paramount position in the analysis of the post-World War II Greece. Most illustratively, the late Greek prime minister Andreas Papandreou, in his book Democracy at Gunpoint considered the involvement of foreign powers in Greece paramount (Papandreou 1970). This was followed by a host of writers attempting to show how foreign powers meddled with Greece (see Mathiopoulos 1994, Papahelas 1998, Roubatis 1987). This could be interpreted in a more realpolitik fashion as an extension of the superpowers’ global dominance struggle, mainly considering the Churchill-Stalin percentages agreement on Eastern Europe to be proof. However, some leftist writers such as Mouzelis, fully conscious of the above explanation, preferred to explain the Greek civil war and post-World War II political developments as part of the global capitalist system and its influence, which was by no means limited to Greece, upon the country. However, according to Mouzelis, it was not so much direct superpower involvement but a culture of underdevelopment being promoted by the global capitalist system (Mouzelis 1986).

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Europe’s Greece: A Giant in the Making

It seems that the right-wing politicians and practitioners saw the situation at the end of World War II as an ideological battle between superpowers within Greece. Looking at the history of Greece written by Spyros Markezinis, in Volume 2 the reader gets the idea that the opening act of the cold war was played in Greece and that all Greeks, foreign leaders, and participants were fully aware of the stakes (Markezinis 1994). In this assessment both leftist and rightist practitioners agree that the failure of Greece to establish a stable democratic system and instead to plunge into a civil war was an ideological exercise. However, newer studies of the Greek civil war show the impact of the prewar political institutions upon the Greeks, such as the instability and fractiousness of the prewar times basically reasserting themselves and politicians basically reverting back to the old prewar conditions (Legg 1987). These studies note that the story is “much more mechanical and more tragic” (Mazower 1993, XVII). These analyses provide a bottom-up accounting of events and focus more on the domestic developments, the local stories, and the possibility that developments before the country was freed were not actually exogenously influenced from the Nazis but locally born (Kalyvas 2006). It is very hard to assess the impact of the involvement of the major powers upon the domestic events in Greece during the Nazi occupation and during the civil war, but historical studies generally fail to account for issues of perception and belief. As Iatrides points out, studies in perception, or rather misperception, in international relations note that a substantial number of wars have started precisely because of such causes (Iatrides 1987, 245–247). Nevertheless, it would be an understatement to say that this terrible chapter of Greek history influenced politics well into the 1990s. Postwar Instability of the Monarchy and the Collapse of Greek Democracy Whether or not the Greek civil war was decidedly influenced by high politics, local politics, or structural politics, the fact remains that the end result was the return to an ex-ante period of Greek politics centered on the monarchy supported first by the British and then controlled by the Americans once they took over. Though monarchy is not an American pastime as an institution, the Americans immediately understood its value at beating back the communists from the country, especially at a time when communist parties throughout Eastern Europe were successfully removing obstacles to the establishment of communist rule. The period leading up to the restoration of democracy in 1974 can be characterized as vital in any understanding of why the Greek political system operates the way it does internally and why Greek foreign policy went

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through ebbs and flows vis-à-vis its international commitments. From the study of American declassified materials conducted by Alexandros Papahelas, American involvement in Greek politics was purely self-serving, but by no means did it favor nondemocratic regimes to begin with (Papahelas 1997). As noted in the many archival materials, initially the American policymakers wanted to deal with as many Greek politicians as possible, as long as this would not lead to the communists taking power. The American pressures upon the conservative prime minister Kostantinos Karamanlis over the issue of Cyprus, his disagreements with the monarchy, and his length of service—he had already served eight years and there was some political fatigue regarding his leadership—(Papahelas 1997, 74, 84, 87) forced the American administration to look elsewhere in the political spectrum for allies and allow Karamanlis to exit from Greek politics for the time being.2 As the political scene became nebulous, the triangular relationship of the American foreign policy apparatus, the monarchy, and the rise of the Greek left created a volatile mixture that pushed the political system to a standstill and eventually to its collapse with the taking over of the government by the Colonels’ Junta in 1967. However, social cleavages such as the division between nationalists and internationalists, as well as the role of specific elites such as the military, also assisted the collapse of the Greek political system. The opposition to the monarchy and United States’s favorite politician (i.e., Karamanlis) was gearing up for an electoral fight that would lead them to the prime minister’s office. The Centre Union, a centrist and anticommunist party, was led by G. Papandreou, who had enacted a high-pitched campaign against his opponent in the 1950s full of accusation of electoral fraud. At the time, the period of 1963–1966, the average Greek government had a life span of six months with five caretaker governments (Kaloudis 2000, 35). Institutionally weak, the Greek system then depended on charismatic personalities such as Papandreou and Karamanlis to move the country forward. Papandreou was a noted anticommunist who considered all communist parties to be branches of Soviet control and additionally questioned their patriotism, especially since it was known that in order to secure supplies and manpower during the civil war they had agreed to abdicate northern Epirus (today is southern Albania) and Macedonia, which famously led to a tremendous foreign policy debacle with the collapse of Yugoslavia in the 1990s (Kritikos 1993, 143). Additionally, Papandreou had a couple of advisors who were Greek-Americans, including his son Andreas (who eventually became the first socialist prime minister of Greece), who gave specific assurances to the US Department of State that Greece would remain within the US sphere of influence if Papandreou was to come to power (Papahelas 1997, 95). However, Papandreou was a much older politician who was on record questioning global bipolarity and the dominance of either superpower,

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Europe’s Greece: A Giant in the Making

having said that the national interest dictated a policy of equal distance from both superpowers (Kritikos 1944). He opposed the ever-increasing military expenditures and subsequently forced changes in the officers’ ranks, thus threatening the military’s core influence. Moreover, Papandreou was an antagonistic personality for many and pushed his more radical son in the national political arena, which further strained his relationships within his own party, eventually leading to the breaking away of several senior and junior politicians and to the collapse of his government. The Involvement of the Military in Greek Politics The 1967 military intervention into politics was not the first one attempted by the officers corps in Greece, but it was qualitatively different from the others. Papakosma argues that the divide between civilian rule and the monarchy in the early 1900s, demoralization of the officers corps, and weak foreign affairs had led to an intervention in 1909 (Papakosma 1977, 41–47). Karabelias argues that with the exception of the Pangalos coup of 1926, the military generally attempted to protect its interests rather than run the country, which makes the late nineteenth- and early twentieth-century interventions very different from the 1967 coup (Karabelias 1999, 66). This is an idea explored by Thanos Veremis, whose work on the Greek military argues that the officers corps perceived themselves in a traditional interest group manner and attempted to intervene when their interests were threatened (Veremis 1983). What then led to the imposition of a new type of dictatorial rule, one that paralleled the Latin American bloody corporatist regimes? The first cause was the inability of the officers, as well as the monarchy and the superpowers, to recognize the value of parliament and the political party system as legitimate mechanisms of political expression (Malefakis 1995, 70). Certainly the Greek Junta used medical imagery (Greece as a sick person in need of help) as an attempt to explain why its intervention was necessary. It was a paternalistic action that transcended policymaking. Second, the impact of ideology was immense; having already put Greece through the trial of civil war and having created a lasting ideological cleavage, it was only natural that the new dictators would be a by-product of that cleavage (Gerolymatos 2004). Not only were the dictators a by-product of the cold war, but they also inflicted additional pain upon the left with torture, exile, and exclusion. Third, in the same manner as in Latin America, the regime lacked the charisma, persuasive skill, and sophistication to legitimize its rule and thus failed in its experiment (Danopoulos 1983). It is understood from the seminal work of Samuel P. Huntington’s The Soldier and the State that the way to establish objective civilian control over the officers corps was

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to professionalize it (Huntington 1957). Thus, Danopoulos concludes that when this became evident to the leaders of the Greek Junta, they attempted to rectify the situation by establishing a civilian façade, only to end up with a split within the group of junior officers that had taken power, which, in turn, ultimately led to the collapse of the regime. He notes, Military professionalism and regime legitimacy do not mix (Danopoulos 1983: 506). Two events destroyed whatever tiny shreds of legitimacy the Greek dictatorship may have had. First, an internal student revolt that started in the law school of Athens and quickly spread to other universities until it culminated in a violent crackdown at the Athens Polytechnic University on November 17, 1973. Second, the invasion of Cyprus by the Turkish armed forces in the following summer (1974) and the complete inability of the Greek military to put up any resistance or provide any coordinated response to the events. The Greek military regime suffered the same fate as that of the Argentine regime of Leopoldo Galtieri, who was overthrown in 1982 when he was defeated in the war over the Malvinas/Falklands islands. Greece famously became one of the three Third Wave democracies (Huntington 1991). Its transition became consolidation by the end of 1970s according to Gunther Diamantouros and Puhle, with all societal groups respecting the rule of law and the democratic institutions of the country (Gunther et al. 1995, 7). Not only did Greece substantially alter its political system by holding a referendum on the fate of the monarchy, which effectively ended palace politics in the country without having any significant tribulations, but it also shortly thereafter saw the successful transfer of power between the conservative and socialist parties without the smallest social upheaval besides the normal democratic debate and antagonism. The development of the Modern Greek political party system is then an important factor in the consolidation of democracy and its current state of affairs. The Face of Greece’s Consolidated Democracy In order to sufficiently understand the impact of membership in the EU on Greece, one must understand the origins, limitations, as well as the advantages of the Greek party system. This allows for the understanding of Greek political parties as both institutions and agents. It has been said that much of the party literature ignores the dual role of the political party as an institution shaped by its political environment and as an agent shaping politics (Van Biezen 2003, 172). Thus, looking at the origins of the current political party structures, the argument can be made that they are a by-product of the larger issues facing Greece in the run-up to democratic consolidation. I will explain how, after consolidation was achieved, these political parties remained solidly the most important agents of change or retrenchment.

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Europe’s Greece: A Giant in the Making

In his seminal work on the conservative party of Greece, Takis Papas argues that the weakness of the political parties in postwar Greece was a symptom of an abnormally overdeveloped state. For Papas, political parties were not agents of change but rather weak institutions shaped by politics beyond their control (Papas 1999, 21). In his view there was a need for a charismatic leader with the will to change the system by recreating a conservative political party that took a center-right position on the ideological spectrum, and intentionally ignoring the older right-wing nationalists, monarchists and fascists, which it eventually subsumed (Papas 1999). This charismatic leader was Kostantinos (Kostas) Karamanlis, the same politician who years before the collapse of the Greek democracy had removed himself from politics by going into self-imposed exile in Paris. Karamanlis came back as deus ex machina after the collapse of the dictatorship and led the conservative forces to a most impressive electoral victory, post-junta emotions notwithstanding, in 1974 that gave them 54.4 percent of the electoral vote and 72 percent of the parliament seats (Papas 1999, 58). There are two very obvious but rather important elements in the new political party that Karamanlis created (and which his nephew is currently heading): (a) the impact of this new party on the consolidation of Greek democracy, and (b) its ability to promote a European Greece. New Democracy, as the political party founded by Kostantinos Karamanlis, was instrumental at keeping the military in the barracks, negotiating a new constitution, destroying the extreme right-wing elements in Greece for long time, and establishing a working political party system of two-and-a-half political parties. Contrary to the assertion that Greece has a two-and-a-half political party system, Lyrintizis argues that they are “three political blocks,” with the third one, the communists, not seriously contenting for power (Lyrintzis 2005, 245). In contrast, Papas argues that Greece is a two-party system (Papas 2001). I argue that the Communist Party must be included since its existence and development create additional veto groups that the political system has to satisfy. The communists’ fortunes in Greece are also ultimately linked to the fortunes of the socialists who succeeded the New Democracy party. It also reinforces the point that today’s political party was shaped by the historical expediencies of the past, and even though there is some transformation, the weak elements of the Greek political system can be traced to these political expediencies.

The Conservatives—New Democracy Undoubtedly a major political party in Greece, the New Democracy (ND) Party was founded soon after the restoration of democracy by former prime minister Kostantinos Karamanlis. The aim of the new party was to be a

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center-right catchall party, as its name would suggest, but the questions of its past lingered on for decades. The most problematic reminder of this new political party in Greek politics was its association with the traditional oligarchy that ruled Greece during and after the civil war, leading all the way up to the dictatorship. This problem was compounded by divisions within the political party that still exist to a certain extent between right-wing conservatives (social conservatives, fascists, monarchists, etc) and liberal conservatives (mainly economic liberals). The only way that this party moved forward and came to be considered successful (Papas 1999), especially after it stayed out of power for nearly two decades (interrupted very briefly with a short-lived conservative government), is through charismatic leadership. Beyond the ideological problem, the party had an age-based problem with a sharp division among the leaders: the older ones were heavily associated with the ancien regime, and the younger cohorts were recruited into the party after 1974 (Papas 1999, 97–98). In its eight years of rule the New Democracy party became institutionalized, professionalized, and presented the Greek public with a safe centerright public policy. In 1980 Karamanlis left the party leadership and was elected president of the Hellenic Republic (Greece). The culmination of his policies would be the successful negotiation of the accession treaty to the European Economic Community (now the European Union) that was signed in 1979 and that made Greece a full member of the EU in 1981. It was his personal belief that Greece needed to proceed along three lines: (a) the fortification of Greece’s democratic regime, (b) the reenergizing of economic policy, and (c) the inclusion of Greece in the European community (Kontogeorgis 2000, 66–67). This was a personal coup for Karamanlis, who had often argued that Greece’s interests were in the West (meaning allied to Western Europe and the United States), and this treaty made it official (Lambrias 2000, Molybiatis 2000). With the accession of Karamanlis to the presidential position in Greece, New Democracy underwent a period of soul searching. It had to. The party was defeated soundly in 1981 by the Panhellenic Socialist Movement (PASOK) and did not return to power until a decade later, though for a very brief period. It was beaten along ideological lines: socialists charged the New Democracy Party cadre of being agents of the oligarchy and regularly called them fascists. The party also suffered ruling fatigue; after all, it was in power for a very long period, if one considers that many of the party leaders were in power even before the Junta. After two leaders, Georgios Rallis and Evaggelos Averof, were defeated in 1981 and 1984, the party again had to face a choice of leadership, and this time their choice went yet again to a politician with connections to the pre-democratic past, strengthening the link

28

Europe’s Greece: A Giant in the Making

of the conservative party with the hard times of the past. The inability of the New Democracy to reclaim the center cost the party dearly, according to Papas (Papas 2001, 244). However, the New Democracy Party returned to power in 1990 with a tenuous one-person majority in the parliament, which lasted for three years before it collapsed due to the “Macedonian problem.” New Democracy did not return to power on its own merit in 1990, since much of the votes they received could be seen as a protest vote against public corruption and the excesses of the socialist government. New Democracy, under the leadership of Kostantinos Mitsotakis, shunned the social conservative agenda in support of a liberal economic agenda and attempted to liberalize the economy. However, with a one-person majority in the parliament and an agenda that was the polar opposite of the agenda pursued by PASOK, it is a miracle that this government could last as long as it did. A splinter group of nationalists defected and created their own political party, Politiki Aniksi or Political Spring (POLAN), with the intention of capturing the political center of the political arena in Greece, pushing the socialists and the conservatives to more extreme positions on either side. It so happened, however, that the party’s leadership, former foreign minister Antonis Samaras, gained fame opposing his own prime minister during the negotiations with the newly formed former Yugoslav Republic of Macedonia (FYROM), and that was extremely controversial not only within the New Democracy since it destroyed the government and led to a renewed socialist rule for another ten years, but also with the general public. POLAN did not succeed and became marginalized as a single-issue party and faded out soon thereafter. The defeat in the general election of 1996 brought to power the nephew of the party’s founder, Kostantinos Karamanlis (otherwise known as Kostas), who is the current prime minister of Greece. He was also defeated in the 2000 elections by the socialists but survived to lead the conservatives to power in 2004. It seems, from personal discussions with some who were New Democracy opposition deputies at the time, that a younger generation of parliamentary deputies wanted a break with the past but also considered the image of the founder of the party as one of a resolute and confident leader who would be widely accepted by the public. Thus they picked his nephew as the youngest ever Greek prime minister, one who was born after World War II and had very little connection to Greece’s past hardships. The gambit worked and the conservatives regained power. To access the party’s ideological transformation in the post-dictatorship era, one would have to say that the party was transformed from a traditional Gaullist party, with an emphasis on strong leadership and a dominant state with paternalistic attitude, to a Thacherite neoliberal party. With the failure of its policies during the Mitsotakis era, the New Democracy Party was

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transformed yet again to a more sensible centrist Europeanist party. New Democracy had neoliberal ideas, to be sure, but the party was forced to heed to a great deal of populist social welfare protection programs because of the political path PASOK had previously charted, thus making Greece one of the costliest welfare countries in Europe.3

The Socialists—PASOK PASOK is also a by-product of Greece’s importance to the cold war. However, this political party started out as a resistance group to the Greek dictatorship rather than as a party. Since it was founded by Andreas Papandreou, the son of Georgios Papandreou, former prime minister of Greece, it was well-connected to the pre-junta events in Greece, and Andreas himself, by his own admission, played an important role in the collapse of Greece’s democracy (Papandreou 1970). The organization that preceded PASOK was the Panhellenic Liberation Movement or PAK, which was organized by Papandreou while in exile from Greece to resist the dictatorship. In his seminal work on the rise of the Greek socialists, Spourdalakis, a member of the organization, describes in great detail how PAK was converted to PASOK and how its leader created a cult personality for himself within the party and dominated Greece politics for nearly two decades (Spourdalakis 1988). PASOK came into being on September 3, 1974 with a declaration that clearly identified Greece’s problem as one of dependency on the major superpowers, in addition to other radical proclamations (Spourdalakis 1988, 66). Yet the political party’s life proceeded with a break from the influence of the radical leftists within the party after their initial loss in the first post-dictatorial election in Greece. In 1975, in what Spourdalakis describes as the “short march to power,” A. Papandreou consolidated his power within the party by expelling the more radical elements, the very ones he relied upon to fight the armed struggle against the dictatorship, and replaced them with technocrats as he prepared to take over the government from the New Democracy Party that was steadily losing its public support. PASOK’s strategy has been hailed as ingenious because a supposedly radical leftist party came to power in 1981 after calling for Greece’s independence from foreign intervention, threatening the domestic elite, and subsequently being embraced by the majority of all the people of Greece (Papas 1992, 47). However, this radical leftist ideological facade was there for rhetorical purposes only and soon degenerated into outright populism. It is significant that one of the first things that Papandreou did was to send an envoy to make sure the United States did not misperceive his intentions while he was denouncing their country publicly (Mardas 1995, 56). Moreover, while he promised to rid Greece from US imperialism and its

30

Europe’s Greece: A Giant in the Making

agents, PASOK neither withdrew Greece from NATO and the EC (as the popular campaign slogan said it would)4 nor end the US military presence in the country (Kalaitzidis and Zahariadis 1996). In the end, after two decades of rule with Andreas Papandreou firmly at the helm of Greece, the socialist political party had degenerated into “. . . the protector of all corporate interests and above all, the champion of the state as a mechanism for the protection of specific interests and the allocation of favors and spoils to politically loyal groups” (Lyrintizis 1993, 36). The system degenerated in such a way because of the personalistic nature of the organization during Papandreou’s tenure and his inability to distinguish between the party and the government, a conclusion readily accepted even by his peers (Daskalakis 1996). It could be argued that the only way that the president of PASOK could hold both organizations intact, Greece and his political party, after having put such a diverse coalition with distinct and sometimes competing interests together, was to combine the party and the state. Nothing highlights the nature of Papandreou’s rule better than his rejection of President Karamanlis for a second term and the promotion of Christos Sartzetakis in his place. Andreas Papandreou wanted a reduction in the constitutional presidential powers and, for that matter, a change in personnel, and he got both. In the first case, he had the members of parliament sign a blank piece of paper giving him the power to act as he saw fit. This illustrates the power of Papandreou as the leader of PASOK (Mardas 1995, 244). Nevertheless, the end result was endless corruption scandals, kickbacks for defense expenditures, the failure of a large bank (Bank of Crete) because of millions of embezzled funds, and personal scandals such as Papandreou’s divorce with his wife Margaret and his marriage to an Olympic Airways stewardess who ended up becoming extremely influential in the final period of his life. In fact, Papandreou suffered from a heart ailment that required heart bypass surgery, and instead of relinquishing power for a short period of time he ruled via fax machines in London, England, while recovering from the operation. The personalistic regime of Andreas Papandreou came to an end with the collapse of his government in 1989 and an election that did not provide any party with the necessary majority to create an autonomous government. Greece entered a brief uncertain time for two years with one coalition government succeeding another, until a third election produced a tiny majority of two members for the conservatives. The conservatives’ main campaign slogan focused on economic liberalization but more importantly they emphasized catharsis, a word signifying their determination to prosecute the people involved in the numerous scandals that PASOK had been implicated in.5 The outcome of the trials themselves may not be interesting, but the impact of PASOK’s eight-year rule is, especially because it defines

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the contours of action in the governments that ruled Greece in the 1990s without Papandreou. These contours include the reduction of the cult of personality but heavy reliance on traditional clientelist networks put in place by PASOK in the 1980s because of the inability to separate the government from the party (Lyrintzis 2005). Herein lies the differences between the two major political parties in Greece through the 1980s and 1990s: the conservatives were a political party that was older while the socialists were a political party that was younger (Papas 2001). The conservatives were linked to past failed policies, some of which they had a direct impact on, while the socialists were either too young or persecuted and often too busy fleeing the wrath of the state to be involved.6 During the dictatorship the conservatives talked about regime isolation and noncooperation while the socialists talked about armed struggle, and some actually received guerilla training abroad.7 There is, however, plenty of evidence to support the argument that much of this was perception and that PAK, which had not really materialized its armed struggle against the regime, was a vehicle for Andreas Papandreou to pursue Greece’s top position. He won an election in 1993, and in 1996 he passed away. Once the great leader was gone, PASOK had to redefine and reinvent itself. Kostas Simitis, an old comrade of the anti-dictatorial struggle but a modest man with solid credentials, became the leader and remained in power until 2004.

The Communists—KKE If the two major parties in Greece had some indirect connection to Greece’s external environment, the Communist Party of Greece was the direct by-product of the cold war. And while the major parties debated where Greece belonged, whether to the West or to the Greeks, the communists already had the answer, that is, the Soviet Union. Between 1949 and 1974 the Communist Party in Greece was banned and its leadership scattered in various Soviet and East European satellites (Sfikas 2001, Kalyvas Marantzidis 2003, Iatrides 2005). Because of their loss to the government forces and their subsequent absence as a political party from the Greek scene, the party developed an internal split that initially was benign but eventually became a virulent antagonism. Since the Communist Party of Greece (KKE) was banned because of its association with the Soviet bloc, a proxy party was formed, the United Democratic Left (EDA), to allow for leftist participation in Greek politics. In the beginning this meant only that communists were allowed to play a renewed role in the politics of the country, but because much of the communist leadership was outside the country a split emerged between those fighting for socialism inside the country and those who remained outside of Greece, similar to the split of anti-Saddamist

32

Europe’s Greece: A Giant in the Making

forces in the Iraq of 2003. This situation increasingly became a game of trust and expectation. Neither side trusted each other and slowly diverged in their expectations of what the party ideology should be (Kalyvas and Marantzidis 2003). EDA’s leadership became KKE Interior and evolved into a less dogmatic Marxist-Leninist political party. More recently the KKE interior has become an opaque leftist coalition that operates within the existing political and social order, and is led by an intellectual elite that is mostly concerned with contemporary, even post-materialist, public policy issues such as the environment and education. After becoming legal again in 1975, the original communist political party, the KKE, remained loyal to orthodox Marxists-Leninist thinking with strong affiliation to Moscow and strict adherence to its guidelines (and a rejection of the liberal socialpolitical order that was struck in Greece after the Junta). Presently the KKE consciously rejects many of the precepts of this order by calling for Greece to abandon its membership of NATO and the EU as well as to nationalize key industries. It seems that the communist fate is intertwined with that of the socialist party of Greece. Where there was a question about socialist or conservative rule or a crisis of the electoral majority of the left, the communists were seriously hurt electorally to the benefit of the socialists (Lyrintzis 1984, Spourdalakis 1988) just as the centrist parties (EDIK and EK) were hurt by the ascension of New Democracy and PASOK (Mavrogordatos 1984, Nicolacopoulos 1989, Seferiadis 1986, and Nicolacopoulos 2005). Moreover, the electoral battle for the communists was not against this rising dualism in the political spectrum of Greece, which effectively has become a two-and-ahalf party system. But it was civil war with the KKE and KKE interior battling it out for electoral supremacy on deciding which among them would be Greece’s third major party. Even though KKE carried the day against what now is a broadly defined leftist coalition, the civil war hurt its chances to become a dominant party and it largely fell prey to PASOK’s catchall populism, remaining at roughly 5.5 percent in the year 2004. The KKE interior, on the other hand, was almost decimated in the same manner as the centrist parties in Greece in earlier decades until it recovered somewhat to 3.3 percent, making its electoral future extremely tenuous.8 In fact, Kalyvas and Marantzidis note that the left’s influence declined across the board, starting with its membership, and then continuing with its local and national labor organizations, as reflected in the national readership of the party papers (Kalyvas Marantzidis 2003, 677–678). While the parties on the left were unified for a brief period after 1975, the decline of the communists in general and the transformation of the Greek party system into a two-and-a-half party system can be seen in the results of the three subsequent elections between 1989 to 1993; in these elections the Greek communists dropped

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from a combined 13 percent of the vote to a 3 percent (for the Coalition of the Left) and 4.5 percent (for the Communist Party), respectively (Kalyvas Marantzidis 2003). The best strategy for the survival of the communists appeared to be unification and rejection of the growing leftist populist appeal of PASOK, but the two parties could not hold themselves together and parted ways again. This split left the KKE with the bulk of the traditional communists, while the coalition struggled to survive with a mere 3.2–3.3 percent of the popular vote, which is barely above the 3 percent threshold for entry into the Greek parliament. Politics and Political Parties in the Last Three Elections The past three elections demonstrated “an electoral correction,” comprised of the shedding of past inadequacies and the professionalization of the political parties in Greece, the marginalization of extremist parties, and the dominance of centrist ideas. Membership to the European Union is a key to this “correction” in the past ten years in regard to politics and parties in Greece. The electoral results in the elections between 1993 and 2004 are listed in table 2.1. Electoral results since 1981 highlight the Greek two-party system (Papas 2001). It is, however, not a solid two-party system like that of the United States but more of a two-and-a-half party system with a solid (even if not unified) leftist presence in the Greek parliament. There are two issues that most people who look at the Greek party system seem to gloss over: (a) the Europeanization of the political parties themselves, though arguably many have looked with this angle at PASOK in the 1990s;9 and (b) the impact of smaller political factions that were either formed promoting new ideas or were splinter groups from the larger parties. The watershed year for Greek democratization, according to Diamantouros, was 1981 because of the peaceful transfer of power from the Table 2.1 Election results 1993–2004 Political parties PASOK New Democracy KKE Coalition of the Left Union of Centrists DIKI LAOS POLAN Green (Ecology) Party

1993 (%)

1996 (%)

2000 (%)

2004 (%)

46.9 39.3 4.5 2.9 0.2 – – 4.9 0.1

41.49 38.19 5.6 5.12 0.72 4.43 – 2.94 0.08

43.79 42.73 5.53 3.20 0.34 2.69 – – 0.30

40.5 45.4 5.9 3.3 0.3 1.8 2.2 – –

34

Europe’s Greece: A Giant in the Making

right to the left (conservatives to socialists) without incident (Diamantouros 2001). There is, however, another reason, namely, the accession of Greece to the European Economic Community (EEC), the precursor to the European Union (EU). The conservatives’ intentions regarding membership were wellknown and existed long before the interruption of the democratic system by the Colonel’s Junta. Kostantinos Karamanlis, in his first premiership in the 1950s expressed strong interest in the European project and worked to that end, eventually achieving an accession agreement in 1962 (Mpratakos 2002). Kostantinos Karamanlis was finally able to begin negotiations for entry in earnest after his return to power in 1975. In what could be called a semiofficial party history, New Democracy’s founder argued for Greek accession to the European Economic Community by saying, “Greece belongs and wishes to belong to Europe” (Mpratakos 2002, 205). The reasons Karamanlis sought Greek accession were discussed extensively then and are understood even better today in a country with a tremendously Europhile attitude. The economic reasons were outlined by Panagis Papaligouras, minister of coordination and development, in his speech in the parliament during the discussion of the Economic and Social Development: (a) the possibility to access the moneys of the structural policy department; (b) new possibilities for Greek businesses; and (c) the geographic location of Greece in the crossroads of three continents, which until recently was not an enviable position, may, because of the EEC, prove to be very useful (Mpratakos 2002, 208). As far as political developments go, this may prove to be the greatest political feat of post-dictatorial Greece. In this sense the Greek conservative party, New Democracy, would be the steward of European policymaking at that time. The Kostantinos Karamanlis Institute in Greece recently produced an edited volume of several panel discussions regarding both the European dream of its founder, the impact upon Greece, and an analysis of achievements and shortcoming during Greece’s tenure in the EU, thus illustrating the commitment of its core leadership to the founders’ vision (Idrima Kostantinos Karamanlis 2000). Most importantly, however, accession to Europe itself became a constraint to backward-looking right-wing elements that could very well wish to return Greece to pre-democratic times. As they existed in the New Democracy Party these elements have been successfully isolated. As a result of the European membership the conservative politicians that belonged to New Democracy also had an ideological commitment to democracy, albeit liberal capitalist democracy with an emphasis on the liberal (Papas 2001). A generation later in present Greece, no political leader seriously questions membership to the EU with the exception of the Greek Communist Party (KKE). Moreover, all political leaders belong to their respective European associations and have developed a series of Europe-wide contacts with European political circles. Kostas Karamanlis, the founders’

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nephew and prime minister since 2004, has a close relationship with his French counterpart President Sarkozy, as well as with his former counterpart in Portugal and current EU President Jose Manuel Barroso. Nonetheless, as the new membership impacted the workings of the government and as new responsibilities had to be assigned to different ministries, the structure of the government itself started changing and, consequently, the political party assignments did too. More recently, and before New Democracy came to power, the party structure and responsibilities changed in order to promote new blood and new solutions to everyday problems that would give the Greek conservatives an edge in the upcoming elections (Mpratakos 2001, 746). Moreover, as Spanou indicates, there was a gradual change in the governmental structures that coincided with EU membership (Spanou 2003). The greatest effect that the nascent EU had, though, was upon the socialist party of Greece. As mentioned earlier in this chapter, PASOK’s ideology was radical, reflecting the rejection of years of conservative domination. The election of Kostantinos Karamanlis as prime minister of Greece, and consequently his policies, was rejected as an appeasement of the conservative establishment after the collapse of the Junta. In ideological terms, PASOK’s explanations of why the country needed change fall in the Marxist category; using heavy imagery and sometimes strong language, PASOK’s deputies talked of liberation from foreign centers of dependency (Mardas, 1995). In this type of argumentation, the EEC at that time could only be seen as another organ of the imperialist superpowers of the West and was rejected as such. In his electoral proclamations, the founder of PASOK and longtime prime minister Andreas Papandreou proclaimed that he would call a referendum on the fate of Greek membership while making sure to not allow the EEC to interfere with PASOK’s development program, which according to its leader would establish national independence (Mardas 1995, 47). This preoccupation with national independence of what otherwise has been called leftist populism10 led to some awkward times in the EU council meetings and cost a deputy foreign minister his job early on.11 Nonetheless, both Papandreou’s and PASOK’s rhetoric was amplified by 1984 as the party settled in power. According to Kazakos, after the accession of Greece to the EEC, PASOK’s ideology became less coherent (perhaps as a result of being in power) and the party adopted a “demandeur” attitude toward Europe (Kazakos 1992, 266). As money from the integrated Mediterranean programs and the Single European Act (SEA) started flowing in to Greece and the more the PASOK leadership realized they could use The European Community, they softened their approach to Europe. Eventually PASOK replaced ND as the Europhile party in Greece and promoted a solidly Europeanist profile especially in the 1990s. Kazakos argues that several reasons contributed to the consolidation of the European profile for PASOK, ranging from the reality of belonging to

36

Europe’s Greece: A Giant in the Making

the EU to pure electoral commitments that PASOK had made (Kazakos 1992, 277). Most important was the decision that Greece needed to be part of the Eurozone and that if the country failed in this achievement it would be the end of PASOK as the dominant political party in Greece, whereas if PASOK’s efforts gained entry for Greece to the Eurozone the future looked bright. The introduction to E. Venizelos’ book The Greek Economy after the Accession to the Economic and Monetary Union (EMU) is highly illustrative when he says “The accession of the country to the EMU and the Eurozone took, and it was unavoidable after a point, symbolic proportions” (Venizelos 2000, 9). Under the adept direction of Prime Minister Kostas Simitis, the successor to Andreas Papandreou, Greece implemented a liberal economic plan, much of which was counter to what PASOK came to represent in the past, and achieved accession to the third stage of the EMU and the Eurozone in 2001. During the debate on Greece’s accession to the Eurozone, the prime minister highlighted the benefits of accession, such as “low inflation and low interest rates, reduction in the cost of transactions, the eradication of the exchange risk for businesses, reinforcement of investment and thus of employment, the reduction of the cost of housing ownership, transparency on behalf of the consumer, the opening of opportunities for people with savings, assistance to the small and medium size business and the defense of our economy against the fluctuations of the global markets” (Simitis 2002, 265). The discussion on Greece’s accession was demanded by a small factional party that came from within PASOK, called the Democratic Social Movement (DHKKI).

The Small Parties Considering that nearly two-thirds of the Greek electorate have a steady relationship with the two major political parties and do not change their vote based on the circumstances (Nicolacopoulos 2005), the election of smaller parties into the Greek parliament is interesting and may ultimately highlight the changes in the political system of Greece. The communists (KKE), as indicated earlier in this chapter, have a hardline Marxist strategy and do not seem willing to change it whatever the benefits. It seems that the years they shared power with the conservatives after the 1989 election were not convincing enough to force a switch to a European left camp. Moreover, as previously indicated, the Marxist camp split in two, with the hardliners greatly benefiting while the rest of the left entered an electoral wilderness where every election turned out to be a game of Russian roulette for them. The split, in addition to the declining membership of the KKE, indicates a real split in the attitude of Greek Marxists, some of whom may have joined forces with the socialist party (PASOK) in order to create

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a leftist wing in what increasingly became a centrist socialist party. If one of the great successes of Andreas Papandreou’s PASOK was to limit (some say destroy) the chances of the communists becoming a real force in Greek politics, then Simiti’s PASOK gave rise to a new left located between the hard-line KKE and the more centrist PASOK. As Nicolacopoulos argues, the cleavage may be old but the issues that drive the split are new, ranging from social policy within a European framework to environmental politics. The new name for the leftist coalition under which the party ran in the 2007 elections, SYRIZA, is a reflection of these global/European considerations. Looking at the introduction of this new party, there are references to the global anticapitalist movement and to the EU throughout, indicating that the new left is adopting new ways.12 In addition, SYRIZA subsumed DHKKI in an effort to solidify the new leftist electoral base.13 The smaller parties on the right also reinforce this idea of the Europeanization of the two major political parties that may be catchall parties in the traditional sense but cannot adequately cover new issues and cleavages that spring from Greece’s membership to the EU and its interaction in the global economy. For example, the splinter party created by Stelios Papathemelis, a former conservative member of PASOK, called Democratic Revival, represented the conservative older version of PASOK and he finally became an MP with the help of ND in the election of 2004. This implies that currently PASOK is unwilling to go back in time in order to sustain its leadership, thus losing voters both on the left and on the right. The conservatives also lost some voters, though after being in opposition for so long consolidating their electoral base should have been a priority. Initially, as mentioned previously, New Democracy (ND) lost power after winning the thinnest possible majority in the Greek parliament in the 1990 elections, 151 deputies in a 300-member parliament, due to a splinter nationalist party. It seemed that passions on foreign policy ran high and that the political party Political Spring (POLAN) would do well. As is evident from table 2.1 on electoral results, POLAN entered the parliament in the 1993 election and narrowly missed repeating the election results of 1993, which saw PASOK gaining one of the highest electoral results in its history. The conservatives refused to accept POLAN leader Antonis Samaras back into the fold after that for a decade, and in the 2004 European elections he was rewarded for publicly supporting ND in the previous election with a spot on the conservative ballot. Nonetheless, the Greek nationalist wing, which he represented, found a new advocate, the Popular Orthodox Rally. It is evident that even ND, with its drive to recapture power in the parliament, was not able to accommodate the most right-wing element that generally was associated with the old conservative rule. Small nationalist factions with all their negative aspects of nationalism, xenophobia, anti-Semitism, and

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Europe’s Greece: A Giant in the Making

antiliberalism could not find their expression in the main stream parties both on the left and on the right. The Last Election The last parliamentary election is important not only for its unsurprising result (see Dinas 2008, 604) but also for the context in which it took place, and most importantly for its effect on the political parties of Greece. The results were widely expected weeks before the election and are shown in table 2.2 below. The context in which the election took place was a tough one for the two major political parties. Having faced the opposition’s insistence that elections be held and after a defeat of the university reform legislation, the conservative government insisted that it would conduct elections on time.14 As in many European democracies, the governing party picked the time for the national election that was the most convenient for its own purposes, September 2007. Talk of election during the fall was abundant, but it seemed from early on that the conservative party was better prepared for it. Even though the ND came to power in 2004 with a campaign promise to work against corruption, only to have several of its members caught in a structured bond scandal, it still won. In addition to its legislative defeat and the bond scandal, the conservative government faced a scorching summer in which record numbers of fires throughout Greece ended up killing over sixty people and destroying large parts of Greek forests in an environmental disaster of unimaginable proportions. These events rendered the government essentially nonfunctional. Yet even under these conditions the socialist party was unable to emerge victorious. The context of the election is more important than the actual result because it seems many people agreed that PASOK’s leadership (George Papandreou) was weak and was making mistakes that would cost the party the election.15 Among his biggest mistakes were the opening of PASOK to leftist and liberal politicians Table 2.2

Results of the last two parliamentary elections in Greece March 7, 2004

ND PASOK KKE SYRIZA LAOS

September 16, 2007

Vote %

Vote Nos

Seats

Vote %

Vote Nos

Seats

45.36 40.55 5.89 3.26 2.19

3,360,506 3,003,920 436,711 241,722 162,494

165 117 12 6 –

41.83 38.1 8.15 5.04 3.8

2,995,321 2,727,702 583,768 361,216 271,761

152 102 22 14 10

Source: Adapted from Gemenis K, “The 2007 Parliamentary election in Greece,” Mediterranean Politics 13, 1 (2008): 98.

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who were out of favor in their parties or had left their own political parties. For instance, PASOK admitted Maria Damanaki and Mimis Androulakis from the left and Stefanos Manos and Andeas Andrianopoulos from the right, even though they had completely different ideas about the direction of public policy.16 Papandreou’s choice of new people, some of whom were naturally inexperienced and were virtually unknown, could be considered another mistake, though in all fairness he had come to power at a difficult time and was asked by the public to change the party. I would venture that the result of the election comes from PASOK’s inability to convert some legitimate concerns of the public such as corruption, pension reform, and university reform into electoral gains.17 The leader of PASOK faced strong internal opposition, and in his effort to placate longtime powerful members of the party he became weaker in the eyes of the public. His most famous about-face occurred after he had supported the creation of private universities in Greece, scolding the government for attempting to repeal article 16 of the Greek constitution that states that higher education is an obligation of the state.18 Yet the conservatives also lost power as is evident from table 2.2, as was expected, with the biggest gains going to right-wing LAOS, SYRIZA, and the Communist Party. The election result is interesting because the strong showing of the smaller parties seemed to indicate a certain disappointment with the larger political parties of Greece. It is important, however, to keep in mind the context of the election and especially the devastating fires in the month before the election took place. For instance, both the large political parties lost electoral support from the people most concerned with the fire’s destruction, that is, younger, educated, and college students who voted for SYRIZA or for LAOS.19 Because of the electoral system in Greece that does not favor strong majorities, it is not surprising that the election resulted in a very weak government unable to go the distance, not only in length of tenure but also in pushing for the necessary structural reform that it promised it would. A slim majority of 152 deputies in a 300-member parliament would ensure that Nea Dimokratia (ND) was hostage to the smaller right-wing party of LAOS. Quickly after the election, in an apparent move to take away some limelight from the “nationalists” of LAOS, the government cancelled a controversial history book, returning to an older version of the book.20 This controversy will be explained in full detail in the next chapter, however, suffice to say that the nationalists were up in arms against what they considered the alteration of Greek history, in order to create a “politically correct” version of the nation’s history. In the final composition, the electoral result did not change much, besides the notable exclusion of the former education minister who was not elected because of the debacle with the history book and the failed university reform, the new Greek parliament has the

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same features, including a healthy 12 percent of politicians who belonged to political dynasties.21 It seems that the biggest loser was PASOK, the socialist party, whose performance one commentator likened to a bloodbath.22 The day after the election was much more interesting politically than the election itself. The electoral result brought about the near collapse of the socialist party of Greece and the transfer of leadership in the leftist SYRIZA. The night of the election Evaggelos Venizelos, a powerful member of PASOK and Papandreou’s nemesis, directly disputed the leadership of PASOK and called for change. What would follow was an avalanche of political maneuvering, personal exchanges, and the near collapse of the party. The Law of Unintended Consequences There were several unintended consequences from the transformation of the political parties of Greece as a consequence of the consolidation of democracy, but most importantly from their Europeanization. Botopoulos lists these consequences when he considers the fate of the socialist parties taking power in all of southern Europe as: (a) the end of radicalism, as evident from the end of declaratory maximalism that was plentiful in their opposition years; (b) the transformation of the socialist parties from socialist and even Marxists-dominated to soft social-democratic, in which parties modified their programs to fit governing as opposed to being the opposition; and (c) their plan being co-opted by the system as it existed and failing to transform their countries as they had initially envisioned (Botopoulos, 1994). Although this analysis was written over a dozens years ago, it is an accurate characterization of what happened in Greece in the 1980s. It may be that Botopoulos gives more emphasis on the outcome being what it was, failed reform, because he believes that the system was able to co-opt the socialist parties in several European countries. Another view, however, is that the political parties in opposition used a maximalist argumentation against the sitting government to inflict maximum damage in the same manner that politicians in the United States use negative political ads to inflict maximum loss of electoral support for opponents. This is evident from a conversation between Andreas Papandreou, who was in many political circles in Europe and most certainly in the United States considered a radical, and Michalis Papakostantinou, the former ND foreign minister, in which Papandreou asks Papakostantinou “Michalis, why did you not join our party?” considering that Papakostantinou opposed the Junta. To this Papakostantinou replied that he had certain reservations about PASOK’s policies, especially the indication that once in power PASOK would withdraw Greece from the EEC and NATO, which it considered part of the

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global capitalist domination plan, only to receive the following answer from the leader of PASOK: “Dear Michalis, if we were to act on all the things we promised we would have never been government” (Papas 2004, 76). It seems that Papandreou the “radical” understood his party’s limitations and in fact used them to his electoral advantage even though he had no plan to radically transform the government once elected. Papas also quotes PASOK’s foreign minister as saying, “If all these people that voted for us in 1981 believed that we were going to withdraw from the EEC and NATO, they would not vote for us. They just liked us to verbalize it” (Papas 2004, 73). There is a certain amount of cynicism in the fact that both politicians seem to believe that the political system is a charade. The belief that the public understood the maximalist pronouncements to be lies inadvertently reveals much of the consideration that went into the “attempted transformation” of the state by the Greek socialists. One could argue that they did not really intent to transform the state either. Thus, Botopoulos may have been more idealistic than the Greek socialist leaders themselves. More importantly, as explained in the previous section, the growth of splinter parties and ideological fights within PASOK, given all its years in power, are also evidence of a certain amount of resentment with PASOK’s choice to moderate itself. The unintended consequences of this important realization, that socialists in the 1980s may have been more cynical than radical, are that Greece benefits vis-à-vis the EEC financially due to hard bargaining. On the negative side, if the government becomes dominated by the political party and not the other way around, then the Europeanization effects throughout Greek society, administration, and politics are moderated. It is telling that Greece has one of the few political party systems that increased its party membership when all other European parties are in decline (Mair and Van Biezen 2001). Conclusion The past twenty-five years in Greek politics witnessed the transition from authoritarian rule to the consolidation of democracy. Greece became the tenth member state of the EU and has since been transformed considerably. In political terms, this means a stable two-and-a-half party system with the two parties agreeing to the rules of the game, including the necessity of being a productive member of the European Union. Though Greek economic and social development may be lacking in the developmental respect, the impact of the European Union upon the political system has been largely positive. Membership to the EU moderated radical left ideologies and amplified conservative worries about the direction of the country. The major political parties became more centrist, and other fringe parties representing a whole host of issues and more radical ideologies appeared, giving

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democratic procedures the chance to flourish and its institutions the solid base they need to establish themselves permanently in the political scene. The Greek political parties also used the EU as a vehicle, perhaps even providing political “cover,” to achieve some unpopular reforms that would have otherwise been very hard to achieve. Considering three of the five areas of party Europeanization identified by Ladrech, such as programmatic change, party/government relations, and relations beyond the national party system, both major political parties in Greece score high in Europeanization (Ladrech, 2002). In the other two areas, organizational change and the pattern of party competition, it is rather difficult to provide any description other than the official version both on PASOK’s and ND’s Europeanization. As Maier argues, it is difficult to investigate organizational changes due to the European Union especially because the EU affects a different level of competition, and national parties may not need to change in order to compete in the EU political arena (Mair, 2000). However, it seems that there is stronger evidence in terms of the changes in competition among parties, especially when one considers the plethora of factional single-issue and ideologically diversified political parties that compete for the limelight in Greek politics as an indicator not only of the state of health of the Greek democracy but also of the diverse effects of the European Union upon a small peripheral member such as Greece.

Chapter 3

Beyond Political Parties: The Politics of a European Identity T        changes in Greece, ranging from the democratic consolidation to the ecological disaster of the summer of 2007 and its electoral consequences. One may argue from taking a cursory look at societal developments that Greece has advanced as a society and, following Ronald Inglehart’s arguments, has developed “post-materialist values” (Inglehart 1977, Inglehart 2005). Several questions arise regarding this observation, not the least of which is regarding what changes have taken place in the Greek society and culture during the past twenty-five years, and how the Greeks perceive themselves in this new world both in terms of belonging to the European Union and also in terms of belonging to a more globalized world. Issues of identity can be extremely tricky, as they deal with issues that define a community through its collective conscience. Any challenges to, or revisions of, the collective self can create tremendous instability and conflict. Greece’s belonging to Europe was taken for granted by its Premier when negotiating its accession treaty, as discussed in the previous chapter. The Greeks are currently one of the most Europhile member states in the EU, according to the most recent Eurobarometer.1 While in this regard the Greeks may very well be squarely European, they also have their national characteristics and peculiarities, and when societal boundaries are challenged the backlash can be tremendous. When looking at some of the issues, such as the national identification card issue, the flag issue, the history book issue, and the minority and immigrant treatment issues, one gets a glimpse of

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the major societal debates that have occurred since (and because of) Greece’s membership in the EU. Naturally, one must be cautious when evaluating the power and influence of the groups reacting to these changes because, as this chapter shows, changes were successful only part of the time. It seems, when all is said and done, that Greece behaves in the same manner as other advanced liberal democracies. Greek Political Culture and National Identity in the EU “Greek culture is under attack and we must preserve it the way people attempted to preserve local cultures in the past, say Metaxas’ reconstruction of Alexandria [a small town in North of Greece in the Prefecture of Imathia],” said a Greek member of parliament in a casual meeting with the author.2 Beyond the obvious political implications of looking to a past dictator to revive past glory, this statement is hardly surprising, even to the casual observer of Greek society. However, it highlights a certain concern with issues relating to Greek identity and its position at three levels, the local, national/regional, and global. This approach to the position of Greek identity carries significant policy implications of how one sees Greece in each of these three levels. Localism may produce intense competition for resources among localities and politically centrifugal forces. Even though Greece is a unitary country, there are regional and local divisions within it. Yet, if used properly, local and regional (national regions not European) spatial planning could endow certain areas in Greece with economic growth and vibrancy, especially the areas of Volos and Thessaloniki, as they are large entry ports to Greece. A national/regional identity versus A European identity may prevent a country from converging with EU laws, economic conditions, and culture, and has been used as a descriptor for many countries that constitute the European South. This factor had political implications for EU foreign policy regarding Iraq, with the East European Countries siding with the United States instead of the French-German axis. National identity in Greece, however, can be an asset in aiding its integration into the EU and has tremendously beneficial properties considering the identity ties and historical interaction Greece has in the Balkans. The Balkan region has been the area of Greece’s first regional expansion and it clearly underlines the political implications of national identity. In addition, as the Greeks started becoming a more integral part of Europe, they are starting to venture politically and economically at the global level, and the way they perceive themselves will certainly influence their policies. For instance, Greece chose to participate in the problems in Afghanistan but not in Iraq, and they chose to form close economic ties

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with Russia and have explored their shared Christian Orthodox ties. Finally, there is the issue of causality: is it the Greek identity that causes certain behaviors or is it membership to the EU that influences its behavior? Identity, specifically national identity, can be viewed as an integral part of a group of people, which defines them in the traditional primordial sense that Geertz talked about in his book the Interpretations of Cultures, but it can also be viewed as an imagined community basically constructed in recent times with the help of modern capitalism (Geertz 1973, Gellner 1983, Hobsbawm 1990, Anderson 1991). In Geertz’s view, there are essential elements that bind groups of people together in what A. Smith would call ethnocentric nationalism (Smith 1983, 158). For many of the analysts of identity and culture, primordial elements such as religion or language are central. Using primarily religion as a proxy for “civilizations,” Samuel Huntington has argued that the entire world is subdivided into “seven or eight civilizations,”3 and he used religion to explain why these would be in conflict with each other. His reasons for why these civilizations will conflict with each other are: (a) their differences are basic; (b) the world is becoming a smaller place; (c) the nation state is weakening as a source of identity; (d) the West is having an ambivalent impact on these civilizations; and (e) cultural characteristics are enduring and less mutable.4 Although much criticism has been leveled against these arguments, it is interesting for our purposes to note that Huntington’s assumptions are erroneous at best because his civilizations are caricatures. He assumes that civilizations are unitary, even uniform, and yet in some cases make an exceptional argument whereby some countries such as Turkey, a traditional Western ally, may not be excluded from belonging to, say, the Islamic civilization. His argument, of course, does not account for intra-civilizational conflict as much as it accounts for inter-civilizational conflict, and in this sense it misses out on some key elements of cultural, linguistic, religious, and ethnic anxieties. In many cases, countries traditionally thought of as part of one civilization, such as Turkey and Greece, may now be in a questionable position in the Christian Orthodox and Islamic civilizations because of their political and sociocultural development. More importantly, in my view, Huntington’s analysis misses out on the flexibility of cultural and ethnic identity and the process of continuous evaluation that is taking place internally in what Smith called the “polycentric” nationalisms, which are rather recent or “modern” constructions.5 Among the things that Huntington gets right, however, is both the fact that the world is getting smaller and that the cultural characteristics of “civilizations,” in this case nations, are hard to change. Moreover, his framework has influenced the intellectual elites of many countries, the United States and Greece included, as is evident from a study on the cultural framing hypothesis

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done on print media in both countries (Bantimaroudis and Kampanellou 2007).6 In this sense, one can make use of the Europeanization literature in search of answers about the impact of membership on the member state’s identity. If there is a substantial gap between national social/political institutions among EU members, EU theorists talk of the lack of a “goodness of fit,” which produces compliance problems and conflict between national and supranational institutions (Borzel 2000, Borzel 2002). Could it be the same for identities? In the case of Scandinavia, the goodness of fit process is disrupted by the process of having pooled so many diverse cultures under one political banner in the EU and thereby generating misfits. This type of activity by the EU disrupts traditional Scandinavian activities that are part of how some countries define themselves, such as whaling and fishing (Ingebritsen 2001). In the case of environmental policy in southern Europe it produces differential results, thus questioning the existence of a “southern European problem.” The research of the outcomes of environmental policy in Italy, Greece, and Spain points to more specific rational/economic explanations for the divergence in policy implementation and it moving away from its cultural underpinnings (Borzel 2003). In this sense, analysts of Greek identity have struggled to explain the source of “Greekness.” Even though the aim of this chapter is not to give an answer to such an interesting and complex question, it is necessary to understand the elements of Greek identity to consider Greece’s place in the world and make some conclusions regarding the role of Greek identity in public life. Given Daniel Payne’s recent assertion that “Huntington’s thesis that conflicts in the new world order will be based upon civilizational differences seems to be an apt paradigm for understanding the current conflicts between church and state in Greece” (Payne 2003, 269), one must question whether or not Greece is having problems fitting into the EU. Moreover, the answer to this issue also has interesting implications for the newer members of the EU, some of which, in Huntington’s model, belong to the same civilization as Greece. Payne argues that because of the different ecclesiastical traditions between Orthodox Christianity and Western Christianity, they represent clearly two different philosophical traditions: the Aristotelian, which corresponds with the Western traditions with its focus on the individual; and the Platonic tradition, which corresponds with Orthodox Christianity’s focus on the community. Using the case of the Church of Greece and its politics, he claims that Greece currently fits the Huntingtonian model perfectly, which, to say the least, is a stretch. Payne not only commits the same fallacies as Huntington by conflating civilizations with religious beliefs rather than viewing religious beliefs as one of many aspects of civilizations, but he also treats religious beliefs as unifying elements. His conclusion is erroneous, since it does not consider the cultural and societal cleavages that exist in

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the country. That is to say, it is fine to look at the overtly political activities of the Church of Greece and be worried about the intentions of its former leader, Archbishop Christodoulos, but in the Greek, and consequently in the European, context, they mean very little. In order to better explain the issues that arise from the activities of the church and place them in context both in the Greek and the European levels, one has to look at the development of several key political and public policy issues that sparked conflict in Greece, such as the issue of the identity cards, the issue of the flag bearers during high school independence day commemorations, and more general issues of identity that arose in the past twenty years regarding either the older minorities in Greece or the newly formed ones. The Identity Cards Issue Religion is a good indicator of identity for Greek society because for a very long time Greece resembled a nearly homogenous society, with over 90 percent of the population being Orthodox Christians. As Voulgaris argues, “the religious feelings of Greeks are, first and foremost, an assertion of national identity rather than a statement of metaphysical faith” (Voulgaris 2006, 144). It is for this particular reason that Greeks traditionally indicated religious preference on national ID cards. National ID cards are used Europe wide for reasons of policing the population. In many countries the population accepts the national ID as a compulsory form of identification (see table 3.1), but some countries have no experience with it. The debate over the possible introduction of a national ID card in the UK can be informative of the processes involved.7 In Greece, however, the national ID card Table 3.1 National ID Cards in selected EU Members Country

Details: Photo

Details: Fingerprints

Other Details

Greece

yes

no

Italy Spain

yes yes

no yes

Portugal Germany France UK a Ireland

yes yes yes n/a n/a

yes no no n/a n/a

Marital Status, blood group by request Marital Status Occupation, Parents name, Marital Status Marital Status, Height Eye Color, Height none n/a n/a

a UK identity card is currently only issued to foreign residents while the British citizens cards is still in the works and will initially be offered on voluntary basis in 2010. Daily Mail September 26, 2008.

Source: Information taken from A. Becks and K. Broadhurst, “National Identity Cards: The Impact of the Relationship Between Police and Ethnic Minority Groups.” Policing & Society 8, 4 (October 1998): 401–425.

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was a set practice since the end of World War II. As noted in table 3.1, the Greek ID card included much more information ten years ago than the average EU ID, especially some that would be considered sensitive information regarding discrimination. This became a larger issue for two main reasons: (a) the misfit between EU law and Greek practice regarding personal information; and (b) the changing demographics of the country following the end of the cold war. Naturally, the misfit of policy between the EU and Greece produced political and societal friction. In 1986, the declaration of religion on the ID card became optional, arousing the ire of the Greek Church, which demanded and still demands that it be mandatory. In 1997 the Greek government passed a law that eliminated fingerprints, religion, occupation, nationality, and marital status indicators from the national ID card (Payne 2003, Molokotos-Liederman 2003). According to Payne, the Greek Church had objections at two levels: (a) on the bureaucratic/administrative level, arguing that their rights to be consulted had been violated; and (b) on the metaphysical level, because the preservation of identity is not the sole responsibility of the state (Payne 2003, 267). Nevertheless, the Greek Church’s reaction to the elimination of religion from the national ID card became a major issue in the political sphere, with both major parties splitting along the lines of “modernizers” and “traditionalists.” On the conservative side it was much easier politically to agree with the Church, and much of conservative membership in the parliament did so; being in the opposition, it stood only to gain against the government by doing this, which suddenly found itself battling one of the largest and most trusted national institutions. Within the socialist party the picture was not good either, with some conservative deputies revolting against the decisions of their leadership. Looking at the results of the last election on September 16, 2007, one can plainly see the impact of these issues, with the Democratic Revival getting nearly 1 percent of the popular vote and the Popular Orthodox Rally (LAOS) overcoming the electoral threshold of 3 percent and entering the Greek parliament for the first time. Obviously, religion was not the only consideration, but the preelection debates and the two-party conflict, Democratic Revival versus LAOS, on which of the parties best represents the Orthodox vote signifies the electoral power of such a constituency. Where Payne’s analysis highlights the clash of civilizations, Voulgaris’ analysis argues that Greek identity projects more of a defensive stance against the changing and uncertain times, an argument with which Molokotos-Liederman and Alivizatos concur (Alivizatos 1999, Payne 2003, Moloktos-Liederman 2003, and Voulgaris 2006). My own reading of the transformation of Greek society from a unicultural to a multicultural one is more optimistic, considering that most of the aforementioned observers

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agreed that the Greeks are not truly religious in the spiritual sense, and that the Church seems to be a more trusted institution than the Greek parliament as a function of the performance of successive Greek governments rather than a Greek turn toward zealotry and fundamentalism. To be sure, a certain number of Greeks have become more fundamentalist in their religious belief, whether following Archbishop Christodoulos’ calls or in response to the uncertainties of a newly multicultural Greece. But the vast majority are described by Stamoulas’ description: “The modern picture of the Greek self is that of the nonsexist, ambitious, autonomous human being who values individual freedom and responsibility in the course of fulfilling his personally defined goals” (Stamoulas 2004, 492). Given this description, much of the discussion of communitarianism and the all-encompassing idea of ethno-cultural purity as if the Greeks are a sui generis ethnicity belongs to pre-democratic times and currently resides in the margins of Greek society and politics. The Flag Issue A better example of the multicultural upheaval (Ankara Papers 2004) and how Greeks see themselves in relation to the rest of the world is the flagbearing confrontations that have become something of a mainstay controversy in the past few years. There is hardly anything more illustrative of one’s nationality than the flag and, to be sure, flag issues are part of many countries’ nationalist discourse. In the United States, for example, issues involving the display and abuse of the flag have been debated ad nauseum in the political arena and have reached the Supreme Court of the United States in the case of Johnson versus Texas, in which a member of the Communist Youth Brigade (the youth wing of the US Communist Party) burned the US flag in Dallas, Texas.8 In his dissent, the then chief justice of the US Supreme Court argued that a flag-burning ban would be appropriate because of the uniqueness of the flag and the “mystical reverence that millions of Americans have for it.”9 Given such reverential language, one can understand the emotional and political implications of any flag-related issues. In Greece, the issue was not the flag itself but who was going to carry the flag during a student parade commemorating Greece’s entry into World War II. Greece entered World War II after a legendary refusal from the dictator of Greece to allow Italian military forces in the country. As a consequence, the Greek army was victorious against its Italian counterpart in Albania, only to succumb to the vastly superior forces of Nazi Germany. The parade commemorates these events and the triumph of the Greek spirit over its enemies (Karakasidou 2000, 241). The national flag bearer is traditionally a senior who is considered by his teachers to be the best student in

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the school. In 2000, an Albanian, Odhise Qenaj, a middle school student, was chosen in the northern Greek town of Nea Mihaniona to carry the flag, much to the dismay of his fellow students and to the outrage of their parents, whose actions became tabloid fodder for weeks. The young boy took himself out of contention by refusing to carry the flag and the issue seemed settled, but the problem remained. How can an Albanian carry the Greek flag? Also, implicitly, can an Albanian be Greek? What did we fight for in Albania? This incident seems to repeat itself every October. Tzanelli says High Schools in Athens and Lesbos had elected Albanian flag bearers, and a school outside of Greece’s second largest city, Thessaloniki, selected a boy from Kazakstan. The Greek government stood its ground, saying that the best student carries the flag no matter what their ethnic background. However, when Mr. Qenaj finished high school in 2003, he was once more elected to carry the flag, and the situation became worse. The town’s parents were outraged and told the school authorities they would boycott the parade. On top of that they had the backing of the town mayor. Still the national government would not change its directive and the student refused to carry the flag in order to avoid trouble. This issue clearly relates to issues of national identity and nationalism, but it also relates to political and public policy questions. Many have viewed the expression of outrage by the parents in Nea Mihaniona as the penultimate expression of Greek nationalism. The more obvious issue at hand is not only how the Greeks express their nationality but how the society came to be in this situation. First of all, borrowing from Ulf Hedetoft, Tzanelli notes that the European project is such that the demands on local and national allegiances are now augmented by a third allegiance to Europe, which tends to confuse and draw a reaction from people (Tzanelli 2006). In this case, as in the case of the national ID cards, people in Greece faced the implication of joining the EU and living in a global economy and rejected multiculturalism. In the case of Greece, until recently the division of civil and ethnic nationalism was blurred because the vast majority of the country was of Greek descent. Since the 1990s, however, the situation has changed and both the Greeks and the Greek government have had to deal with this conflict as it raised tensions between notions of civic versus ethnic nationalism. The defensive reaction in the initial days of the flag issue is subsiding, and though there is still a fair amount of xenophobic elements, practical matters do drive the change. It turns out that some rural schools had graduating classes comprised entirely of foreigners, and in these cases there was no debate. One wonders if parents would object if a High School in Greece had chosen an Italian-born child, rather than an Albanian, to carry the flag. Nonetheless, as Tzanelli notes, “Past European discourses of Greek unity

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and continuity regulate present Greek self-narration and dictate a conflation of ideas of culture, ethnicity and race” (Tzanelli 2006, 45). The same forces that drove that self-narration of ethnic exceptionalism are undoing it by drawing the more inward-looking defensive Greece out and engaging the country in more positive ways. The History Book Issue In the same manner that the flag issue became a “hot button” issue for the Greek public, the latest attempt of the Ministry of Education to replace the old history book for the sixth grade of Greek elementary schools also drew the public’s ire. One area where the battle of ethnic identity rages in every country is the area of the primary education curriculum. Obviously, this is not a problem that is unique to Greece alone. The issue has come up in some way or the other in most European countries: in France, the issue is head scarves in public schools; in Germany, the issue of the assimilation of second-generation Turkish youth in the education system; and in the UK, similar concerns surfaced regarding Muslim pupils in the UK public school system. The better example, however, may be the United States, where multiculturalism is part and parcel of the foundation of the country but still has a debate that is as lively as in some of the ethnically dominated European states. Some researchers assert that “claims that the increasing cultural diversity in the United States in terms of race, ethnicity, ancestry, and nativity is threatening the long-standing consensus of American national identity” are unfounded (Schildkraut 2007, 611). On the other hand, Robert Putman has found that multicultural societies are not successful unless they have longterm assimilation plans by creating crosscutting forms of solidarity and new hybrid identities (Putnam 2007). The similarities between the Greek understanding of ethnic identity and that of the United States aside, education remains the most potent tool of inclusion and assimilation of minorities/ immigrant populations. Putnam’s argument is for the increase of linguistic assimilation and decrease in linguistic isolation in order to foster interethnic ties. One can make the argument that schools are instrumental at creating these hybrid identities that are so important for successful multicultural societies. Obviously, such an attempt could naturally be seen by minority groups as an effort by the dominant ethnic majority to assimilate minorities by alienating them from their distinct ethnic roots. The sixth-grade history book of Greek elementary school was conceived during a previous government (under PASOK in 2003) and was introduced under the conservative government of Kostas Karamanlis in 2006. The education minister responsible for the introduction of the book was Marietta Gianakou. The group responsible for the authorship of the textbook was

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guided by a university professor with assistance from a group of school teachers, and the book was reviewed by a different group of teachers who were also led by a university professor. Although it was a national book provided free of cost to the pupils, the book was published by a private company.10 This fact was highlighted by critics of the book that tended to associate the contracted publishing house, the Labrakis Organization’s Ellinika Grammata, with the socialist party and a section of the media (such as dailies Ta Nea and To Vima) in an attempt to highlight the existence of a rather broad coalition of national identity deniers.11 Once the content of the book became known, virtually the entire political leadership and the vast majority of the public turned against it. The book came under severe criticism by both sides of the ideological spectrum. Leftists feared it would subjugate future Greek generations to a Westernized model of “new Greek history,” emptied of leftist ideas and radicalism, led by Western Europe and the United States, something Zouraris calls the NATO-Kemalist conspiracy.12 Those on the right of the ideological spectrum saw it as the ultimate insult to the Greek nation, as evidenced by the alteration and even elimination of certain important events of Greece’s history. One of the most important voices on the left regarding the textbook was Mikis Theodorakis, a leftist music composer of international recognition. Along with Theodorakis was K. Zouraris, who seemed to indicate the same preference for the rather conspiratorial elements regarding the book when he wrote: This is the reason why the known-unknown malevolent forces based on ignorance and our benevolence succeeded at imposing on public opinion and the state those views that assist their own interests and are based on the systematic manufacturing of the inferiority complex of modern Greeks against the superiority of the foreigners, whom they served in a variety of ways.13

On the right of the ideological spectrum, the critics of the history books found their expression in none other than the Archbishop of Greece, Christodoulos, who argued on September 26, 2006 that “The revisionists of history are attempting to rewrite it [the history] excluding the important contribution of the Church to the salvation of this country.”14 The Archbishop continued his full-scale assault on the book’s “counterfeit history” by saying “those who write books must learn to respect the traditions of the nation and the historical truth,”15 concluding that “the criticisms come from the collective conscience of the people who are fed up.”16 The critics of the book were right it one way; the textbook was extremely sloppy. One only has to look at the comments correcting the multitude of mistakes and shortcomings of the book, which the Academy of Athens published in the wake of the tsunami of criticism, to confirm this. Moreover, those less

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interested in preserving “national identity,” yet affected by the extremely emotional debate, responded with several jokes that circulated freely. For instance, one joke suggested that if the coming of the Ottoman armies in certain areas brought peace and prosperity, then maybe the Nazi armies came to Greece in World War II as part of a German vacation plan. One idea is clear from the controversy surrounding the history book: reactionary forces on both sides of the ideological spectrum are ready to fight the inappropriate invasion of “foreign” or “modern” ideas into the national identity debate. This debate (as others in the past regarding foreign policy toward FYROM, Albania, Turkey, etc.) clearly highlights the existence of a red-brown coalition, a coalition of unrepentant communists and right-wing nationalists, in Greece from the population that feels vulnerable with the new realities that the country finds itself in, such as Europeanization and globalization. These debates highlight the uneasiness of the population with changes regarding the inclusion of ethnic narratives from foreign lands as a result of Greece’s prosperity, which makes it an attractive destination for economic immigration. They also highlight the uneasiness with the changes regarding the treatment of ethnic and other minorities in Greece that came as a result of Greece’s membership to the EU. In addition to the issue of assimilation of the ethnic groups into the national fold, there is the issue of the creation of a “European” identity that both the majority and the minority have to acknowledge. The national school curriculum and the schools themselves are vital in the creation of an educated, enlightened citizenry. The president of the National Council on Education in Greece, Thanos Veremis, in a recent interview argued exactly this point: “national education at the primary level should aim to create a well rounded future citizen.”17 Nonetheless, the issue that arose from the creation of a new history book for the sixth grade of Greek elementary schools is again not unique, as such debates have occurred in Japan and the United States. At the end of the day the red-brown coalition that led this assault on the history book emerged victorious when the Greek electorate did not return former education minister, Marrietta Gianakou, to the Greek parliament following the national elections of September 16, 2007. One may ask whether the fact that there is debate is itself a major improvement from the earlier eras of Greek history. In previous eras of Greek history the debate, if it took place at all, would have been dominated by unadulterated nationalist jingoism, yet these days we find that it is as normal a debate as we find in truly multiracial and multinational states such as the United States. Minority and Immigration Issues The underlying cause of the issues discussed so far is the presence of ethnically diverse peoples in Greece. As such, this particular cause may also be

54

Europe’s Greece: A Giant in the Making

viewed beyond the civic-ethnic divide, as an issue of public policy relating to minorities and immigration in Greece. Without making excuses for the xenophobes and racists of the country, Greece went from a rather homogenous to a rather heterogeneous country within fifteen years. In addition, Greece faces important challenges in cultural, religious, and political terms from an influx of economic immigration coupled with the enormous challenge of “fitting in” within the European project. Greece is by no means unique in this situation; Greece may be luckier to be facing only these issues. Larger states in the European Union face the same problems that immigration brings, racism, xenophobia, social integration and social exclusion, high unemployment, and higher crime rates, in addition to having to deal with unique local identities that respond differentially to the issues of European integration and globalization.18 Greece’s indigenous minorities are important because they are the result of the historical development of Greece and neighboring states. It is because of irredentism among Balkan nations that the issue of “adjacent minorities” became complicated in foreign policy. Most states in the region have been extremely defensive and some particularly brutal in their dealings with their minorities. In Greece the main homespun minority is a Muslim minority living in Western Thrace, which, having been mistreated for sometime by the Greek state, has “developed a common ethnic Turkish consciousness” (Anagnostou 2005, 338). The minority has been politicized and more vocal concerning their issues since Greece’s accession to the EU. As Anagnostou notes, “The gradual process of liberalization of minority rights from the early 1990s onward, of which the abrogation of Article 19 was part, was possibly connected closely to the growing activism of European-level institutions around human rights and minority protection” (Anagnostou 2005, 341). Article 19 of the Greek constitution was abrogated in 1998 by the Greek government after approximately forty years of existence, it stated that any person who leaves Greece without the intention of returning automatically looses his/her Citizenship. The Turkish government claims that the Greeks used this clause to expel thousands of minority families from Greece.19 However, those who stayed on are gradually starting to be integrated into the rest of society, albeit the integration of the Muslims of Thrace is occurring in a slower pace than that of other minorities. One could argue that the first factor impacting the ability of minorities in Greece to integrate into society, especially the Muslim minority (about which the numbers vary20), is democratization itself, because it allows the participation of minority representatives in the Greek parliament, which was previously unheard of. In fact, democratization may be the most important factor in minority issues in Greece because since its inception minority candidates have been running for office and minority representatives,

Politics of

A

European Identity

55

with the exception of the 1993 cycle, have always been elected to the Greek parliament. Moreover, it is evident from this that in the late 1980s and early 1990s we see a more confident and more demanding minority in Western Thrace, where these candidates were elected in the prefectures of Xanthi and Rodopi. In the 1980s the candidates were elected to parliament with independent political parties that carried minority titles such as “Destiny” and “Trust.” Then, as is the case with the last election in 2007, in a surprise result the conservatives lost their dominance, which in the case of the prefecture of Xanthi stood since 1974. As a result, there were concerns of the involvement of the “deep state” of Turkey in controlling the minority vote.21 If one looks at the results since the 1974 elections regarding minorities, however, it seems that the Muslim minority of Thrace is well integrated within the major political parties and participates as such in national elections. Thus, the conservatives lost seats in the election of 2007 because they had weaker candidates, not because of some grand conspiracy. Anagnostou and Triandafyllidou find that “While the context of EU integration appears to bolster minority quest for integration and to diminish its fears of assimilation and reversion to discriminatory policy, it does not in any way render less salient identification with the community” (Anagnostou and Triandafyllidou 2007, 100). Ethnic identity salience aside, the issue of minorities has been overshadowed by the issue of immigration, especially since the indigenous Muslim minority of Greece now finds itself a minority within the larger group of peoples that have entered the country since the early 1990s, a great many of whom are Muslim. It is evident that the Greek state was and still is not ready to deal with these changes. Looking at curriculum implications for schools with minority and immigrant children, Mattheou, Roussakis, and Theoharis argue that not only is the state not prepared to deal with the de facto events on the ground regarding multiculturalism, but that the Greek educational community, including the parents, lack the mentality to do so (Mattheou, Roussakis, and Theoharis 2005, 58). If there is one mechanism to employ in order to assimilate large and diverse numbers of immigrants, it is public education. Clearly, as the issue of the flag bearing points out, Greece is ambivalent about its position in Europe and the world. The EU itself is ambivalent regarding immigration while member states consider this a salient national area of policy, making it harder for an agreement on a common intra-EU policy. In 1999, at Tampere, member states moved toward creating the framework for a future immigration policy, and in 2004 they agreed on the Hague Program, which would allow them to focus on issues of justice, freedom, and security regarding immigration.22 It is, however, unlikely that the states will move any deeper than coordinating mechanisms regarding immigration, something they consider a vital

56

Europe’s Greece: A Giant in the Making

national function, one that includes issues of crime, human trafficking, and justice. Considering the diverse political backgrounds in Europe and the potential differences in policymaking, Austria differs from Sweden in relation to immigration. Thus, it is hard to see member states agreeing to anything more than the securitization of immigration (Mantouvalou 2005). Associating immigration with securitization tends to overinflate the urgency for the state to act and can feed nationalism, xenophobia, and even racism. However, increased immigration is not the worst situation that could happen to an aging continent with negative population growth. The OECD observer wondered if immigration is the problem or the solution and concluded that the return to selective immigration recruitment is inevitable (OECD Observer 2000).23 The Greeks have therefore developed a complex relationship with immigrants and immigration. First, they distinguish between good groups and bad groups (Mantouvalou 2005), and second, they distinguish among immigrants of bad groups whom they do not know and those they know personally (Kiprianos, Balias, and Passas 2003). In a country hit by what has been called the “Albanian Avalanche” (Danopoulos and Danopoulos 2004, 102), people tend to make stereotypical statements regarding the Albanian community, which they consider generally “bad,” while they distinguish the person they employ as a “good” Albanian. According to Bromley and Longino, there are three types of racism: personal, cultural, and institutional (systemic). The most important one seems to be institutional because it is the one that creates systemic exclusion and ghettoization (Bromley and Longino 1972). It is in this institutional sense that it matters less that the Greeks display evidence of weariness of foreigners (Kiprianos, Balias, and Passas 2003, Voulgaris 2006). Looking at the last available Eurobarometer on European Social Reality, one clearly sees that immigration has somewhat receded in the minds of Greeks as one of their top concerns, even as most people related higher crime rates with certain immigrant groups. Looking at table 3.2 we see that immigration as a matter of concern is not in the top five concerns among average Greeks. This makes for a weaker argument on the rising xenophobia of the Greeks and points to the growing tolerance of immigrant minorities from a populace mostly concerned with daily economic issues. One cannot really avoid drawing a parallel between the political debates in Greece and the United States where the fringes of the political parties constantly focus on immigration, either for it or against it, using the media to advocate their views. These attempts by politicians and organized groups miss the mark because the majority of the public is focused on their economic welfare, state benefits, and the state of the economy, and do not see immigration as a top priority.

Politics of Table 3.2

A

57

European Identity

Public Policy priorities in Greece Current

Future

EU 25 (%) Greece (%) EU 25 (%) Greece (%) Unemployment

36

58

40

66

The cost of living

35

50

26

31

Pensions

30

27

30

21

Health care

26

19

17

8

Crime

26

33

25

38

Terrorism

25

11

23

16

The gap between the rich and the poor

17

9

16

16

Immigration

14

6

10

7

The Environment

13

11

24

23

Education

13

17

18

22

The care of the elderly

13

4

10

2

7

5

7

4

Helping others

Source: Numbers taken from http://www.oecdobserver.org/news/fullstory.php/aid/337, 5.

Looking at the issue of Greek identity and its consequences for Greece’s religious, ethnic, and immigrant minorities and how the country has responded to the changes brought upon it due to the process of globalization and its membership in the EU, one may conclude that it makes more sense to look at the issues the country is facing institutionally rather than psychologically or in terms of identity. After all, the same people who fight for the right of “Greek children” to carry the Greek flag in school events and are proud of their religious heritage and seem concerned about their country’s identity are also the ones who have a high tolerance of political rights for minorities. Looking at Weldon’s argument on institutionally driven factors for tolerance, we see that Greece belongs to the “assimilationist” or “republican” group of countries as opposed to the collectivist-ethnic or individualist-civic types. The designation “assimilationist” describes a collectivist-civic type of regime where “the nation-state is a collective entity, but it rejects the notion that ethnicity is its defining feature” (Weldon 2006, 334). Greece is in the same category with France, the United States, Portugal, and Denmark in that its people believe that ethnic identity is fine for private use but that it has no place in public life (Weldon 2006, 335). Weldon’s description therefore categorizes Greece in the group of countries satisfied with its democratic system and states that its political tolerance is a function of the perception of threat against the system and national identity.

58

Europe’s Greece: A Giant in the Making

We can thus better understand such a country’s anxiety associated with belonging to a rather large political group such as the European Union, or operating in an increasingly complex and globalized world. We can also deduce, however, especially from the listing of Greek top concerns, that post-materialist values are taking hold in Greece, with the environment and education ranking higher than immigration. Greek attitudes, as recorded in the Eurobarometer survey, should not make us dismiss the issues surrounding tolerance, multiculturalism, and the negative aspects of social anxiety, as expressed in cases of racism, social exclusion, and xenophobia. It seems, however, that rather than being the most dominant element of Greek society today, they are moderate in their effect due to Greece’s institutional design and political climate. Conclusion Looking at some of the most controversial social issues that dominated Greece in the past decade, it seems that Greece has moved steadily forward in navigating between pressures to protect its identity from the forces of Europeanization and globalization and pressures to disengage from constantly looking toward the past in order to face the future. Historical truths and lessons, as well as social and political identifiers, aside, a country that aspires to develop within the EU and meet the challenges of globalization by modernizing cannot be constantly looking to the past for answers, in what Voulgaris describes as the defensive posture of Greek society (Voulgaris 2006). In many cases, such as the issue of national identification cards, the treatment of Greece’s minorities, and, increasingly, the flag issue, the country has left its social cultural inhibitions behind and moved on to new debates. The issue of immigration is stickier and will take more than a generation to move past, as was the case with past migratory movements. And in regard to the history books, the battle seems to be similar to what occurs in other modern countries, a constant source of debate. It seems that historical books, even at the level of elementary schools, often cut too close to notions of individual, communal, and national identity to be noncontroversial. In the United States, one of the most developed and advanced countries in the world, the debate rages around creationism and evolution, with partial victories on both sides, and nothing indicates that this struggle will dissipate anytime soon. In Greece, the same debate (on evolution) was fought in 1985, and it ended with the Greek Orthodox Church victorious and the history book recalled (similar to the recall of the 2006 Greek history textbook a week after the 2007 elections were over). The debate, however, will go on, and forces within the country will meet again on issues such as this. After all, this is the sign of a healthy democracy.

Chapter 4

Beyond Politics: Society and the State I         E membership has affected Greece, one must consider both the impact of Europe upon the elite levels and the greater society as a whole, something described as “downloading” in chapter 1. In the previous chapter, I focused on the problems of downloading in regard to identity. Even though it seems that there were many insurmountable obstacles to Greek membership because of the issues of multiculturalism and illegal immigration, in each case the extremes were mainly avoided. More importantly, however, one should look at the relationship between society and political leadership to better understand the behavior of Greece within the EU. Having looked at the political party structures and the changes of political organizations in Greece and then the issues of identity in the previous chapters, this chapter examines the interaction between institutions such as the state, media, political pressure groups and elites, and the way Greece’s membership to the EU was affected. Finally, developments within Greek civil society must be considered in order to give the reader a better understanding of the changes within Greek civil society since it became a member of the EU. What Do the Greeks Want? Public Opinion Although it is hard to assess what an entire population wants in terms of outcomes from governmental and European policy, I will use recent public opinion surveys in Greece to highlight: (1) some of the outputs the Greek public would like to see from their government; (2) what their perception of their domestic political environment is; (3) what their perception of their international environment is; and (4) how they compare with their European counterparts.1 Employing the results of these surveys, I hope to highlight the

60

Europe’s Greece: A Giant in the Making

pluralism of opinion and perception of domestic and international political processes and suggest that the Greeks are not exceptional in their demands and beliefs. Moreover, I include these findings within the discussion of the relationship between the state and society that will follow. According to Thanos Lipovats, the Greeks display pretty much the entire spectrum of ills that one typically finds in a society. These include noncompliance in law, low generalized trust toward their fellow man, extralegal corruption, tax evasion, extra medical systems, and private educational tutoring that supplements the public school education they receive free (Lipovats 1991, 245–246). He argues, “Untrustworthiness is a structural phenomenon characterizing the transactions and exchanges of Greeks” (Lipovats 1991, 248). His implication is that a society such as this can only be very hard to live in and must be constantly in the verge of crisis (structural, institutional, moral, etc). Further, a society such as this must have serious civil society problems. It is evident from our discussion in previous chapters that this description is partially right, but it should be qualified in order to include some nonpsychological explanations such as the interaction of state and society. Looking at the last few Eurobarometer analyses and local Greek polls conducted on behalf of Greek media, one finds the following contradiction: although the Greeks seem to be happy with their lives, they consider their personal fortunes in decline and are pessimistic about their immediate future.2 A Kapa Research poll found a more subtle contradiction, with the majority of Greeks in 2006 saying that things were worse but six out ten Greeks admitting that the same year was a good or a very good year.3 In fact, the Greek population is less happy than its average European counterpart, but the difference is not extreme. Compared to their European counterparts, the Greeks have some particular issues that they are concerned with, primarily relating to the future of the economy. Unemployment and future economic growth is on their minds not only as is evident in their responses to the Eurobarometer but also in their responses to the Kapa research survey conducted at the end of 2006. In the Kapa responses the Greek population indicated that their top concerns are the improvement of the economy, education, unemployment, and improvement of salaries and social security payments.4 In the European Social Reality survey the top priorities for the Greek population were (1) unemployment, (2) cost of living, and (3) crime. Further, a question about their general issues of concern yielded the following top three items: (1) unemployment, (2) cost of living, (3) pensions. It is clear that economic realities dominate the concerns of Greek citizens mainly out of fear that economic conditions will get worse. At the European level the Greeks seem to be among the most Europhile populations. They also seem to have a rational/instrumental attachment to Europe rather than an emotional one. They “are very attached to Greece but

61

S o ciet y and the State

not very attached to the EU,”5 with over 60 percent mentioning they are not attached to the EU. The citizens of Greece, however, consider the EU beneficial to their country, put trust in the European supranational institutions, and would like the EU to take the lead in more policy areas (see table 4.1). Does the fact that the Greeks wish the EU would take on additional responsibilities mean that they are losing respect for their national institutions? Actually it does not. As is evident from Eurobarometer 65.2, the Greeks put much trust in the national parliament and the national judiciary (despite recent scandals with illegal networks that rocked Greece) but do not trust their government and the political parties.6 Although Greeks still trust Table 4.1 Policy transfer to EU by sector More decision- Less decision- Diff. Satisfaction Diff. Satis. making at making at EU EU European European Level Level Fight against unemployment Protection of social rights Ensuring economic growth Fight against organized crime Fight against terrorism Ensuring food safety The protection of the environment Prevention of major health issues Equal treatment of women Protection of agriculture Promotion of democracy and peace in the world Cooperation in the field of research and innovation Ensuring Continuous energy provision

62

34

28

3.4

28

3.4

67

26

41

4.8

41

4.8

67

29

38

4.2

38

4.2

74

21

53

4.7

53

4.7

74

19

55

4.8

55

4.8

71

24

47

4.9

47

4.9

70

23

47

5.0

47

5.0

69

25

44

5.2

44

5.2

65

25

40

5.9

40

5.9

61

34

27

4.3

27

4.3

77

16

61

5.6

61

5.6

80

11

69

6.0

69

6.0

75

15

60

5.6

60

5.6

Source: Eurobarometer, the Future of Europe, p. 5.

62

Europe’s Greece: A Giant in the Making

their national government more than the EU by an average of 8 percent points (43 percent vs. 35 percent correspondingly), it is the national parties that both the Europeans and the Greeks in particular do not trust much.7 In the case of Greece, this mistrust can be said to reflect the blurring of the traditional dividing lines between the party and government that was part of the political culture of Greece but was greatly reinforced by the socialists coming to power in 1981. Looking at specific issues as they are presented in the Kappa survey, there is a clear trend among the Greek people that is evident in their demand for more involvement of their government in public policy areas they consider important. Greeks were asked to answer the following questions: (1) Do you believe that hiring as many as 70,000 permanent out of 250,000 contract employees is reneging on preelection declarations? (2) As far as the hiring on a permanent basis of 250,000 contract employees, do you believe that the government should do it? (3) In the past few days there have been many objections to Minister Kefalogianni’s plan to privatize services at the Piraeus and Thessaloniki harbors. Do you agree or not with this policy? (4) What would you want to happen with OTE (the national Communications Company)? By answering at 66.6 percent that the national communications company should not be privatized and at 54 percent that the government action was wrong and that the state should have hired the entire 250,000 contract employees permanently, they expressed a view that not only was helpful to the opposition, which one could argue was the intention of the commissioner of the survey, but also displayed consistency with the statesociety relations as they have been formulated throughout the years. Answers to these questions make it clear that a large part of the Greek society considers the state to be the key for the Greek economy, in the same manner that most pre-1990s socialist parties would. One could safely argue that there is a residual ideological component from previous eras that is clearly statist in terms of politics and dirigiste in terms of economics. In order to understand the state of a society such as Greece, and whether or not there has been change in particular, one needs to place the societal issues of the modern Greek state within the context of the state debate. State-Society Relations: The Theoretical Terrain A great debate rages about the transition from public preference, as expressed in public opinion, to public policy. The debate includes different parameters of the problem. First, does the public know what its interests are, and does it hold cohesive views on the general direction for public policy? Second, what is the process (i.e., the parameters) governing the policymaking debate? And, third, what are the institutional players in that transition?

S o ciet y and the State

63

In answering these three questions some theorists have framed it in terms of power; the presence, absence, and/or exercise thereof. Robert Dahl famously defined power as follows: “A has power over B to the extent that he can get B to do something that he would not otherwise do” (Dahl 1957, 202–203). In this definition, power is measured in public policy outcomes. If you can get something done, you have power. However, according to Bachrach and Baratz, Dalhl’s definition fails to account for the lack of outcomes. What they called the second face of power is not only what people are able to do but what people are unable to achieve (i.e., “non-decisions”) due to structural institutional and other impediments (Bachrach and Baratz 1962). To add to the methodological confusion, Steven Lukes added a third face of power, arguing that in order to understand power as action or inaction we have to understand it in terms of objective interests. Do people know or understand what is in their best interest and how does this understanding affect power relations? Lukes asks, “Is it not the supreme exercise of power to avert conflict and grievance by influencing, shaping and determining the perceptions and preferences of others?” (Lukes 1978, 669). Considering the methodological problems these definitions would have when applied to empirical cases, Parsons argues, “Instead of studying power the students of power seems to have locked themselves into a debate over how to study power” (Parsons 1999, 29). Apart from the circularity of this argument, power theorists seem to be forever locked into a debate about how to study power. There still is, however, an alternative, what Domhoff calls power structure research. In the words of its main proponent William Domhoff, “power structure research came to a sophisticated methodological position based on the idea of ‘power,’ even though it is a relationship, is for research purposes best understood as an underlying trait of a collectivity, such as an organization or a social class” (Domhoff 2007, 99). Power structure researchers such as Domhoff, anticipating Dahl’s objection to C. Wright Mill’s “power elite,” developed four power indicators: first, what organization or class receives the most of what people seek for value? second, what organization or class is overrepresented in the key decision-making positions? third, what organization or class wins in the decision-making arena? and finally, who is thought to be powerful by knowledgeable observers and peers? (Domhoff 2006, Domhoff 2007, 99). While Domhoff’s approach has its own problems, it avoids the methodological problems noted above. Thus, researchers can ask questions with similar implications but with a more decipherable independent variable, the state. Considering the literature on state autonomy and state-society debates, we come across a variety of theories that explain the mode of governance of the majority of states such as Marxism, statism, pluralism, institutionalism,

64

Europe’s Greece: A Giant in the Making

and corporatism. Marxist theorists consider the state a traditional tool of coercion by the capitalist class over society (Yee 2004, 512). Traditional Marxists such as Ralph Miliband outlined the multitude of ways the state was controlled by the capitalist class and did its bidding (Miliband 1969). Neo-Marxists, however, disagree that the state is under the complete control of the capitalist class. Nicos Poulantzas argued that the state is more of an accommodating instrument for the capitalist class, and, while it does its bidding, it remains an autonomous entity (Poulantzas 1973). The neo-Marxist critique better explains state flexibility and its ability through direct intervention to correct (always in favor of the capitalist system) developing conflicts, somewhat bridge the gap between social classes, and referee among a country’s social cleavages. Yee says “the state might enact labor and social welfare policies to defuse working-class discontent that threatens to undermine the capitalist system” (Yee 2004, 513). Greek Marxists have always argued in the same line.8 The problem of the singularity of the state that acts as a completely independent actor establishing its will and implementing its policies is moderated by neo-Marxists who argue that the state’s role is not as rigid. An alternative explanation to the Marxist model is institutionalism. “Imagined as an alternative to neo-Marxists and culturalist approaches, historical institutionalism is grounded in the assumption that political institutions and previously enacted public policies structure the political behavior of bureaucrats, elected officials and interest groups during the policy-making process” (Beland 2005, 3). In Yee’s view, institutions constrain the “actions of agents” by first affecting the range of policy choice, second, they are actors in and of themselves, and third, they proscribe and prescribe action to actors (Yee 2004, 510–511). Actors in this theory are constrained by what came before them and how a certain policy has developed, and as such they have created a path-dependent way that this policy will follow, which makes it very hard to change (Pierson 1996). Actors also are constrained by a logic of appropriateness, and when attempting to think about policy they discard policy proposals that are outside this said appropriateness, thus allowing for institutions to shape policy (Heclo 1974, 305). Moreover, actors may be constrained by the existence of a certain policy paradigm, defined by Hall as “a framework of ideas and standards that specifies not only the goals of policy and kinds of instruments that can be used to attain them, but also the very nature of the problems they are meant to be addressing” (Hall 1993, 279). Thus, it would be nearly impossible to completely change the way bureaucrats and even the public sometimes think about certain issues because they are constrained by this logic of appropriateness that follows a given policy model. Another theory that explains state-society relations is statism. Statism describes the great involvements of the state apparatus in running the

S o ciet y and the State

65

economy and society. Statist theorists are generally concerned mostly with nondemocratic regimes, such as the communist regimes in the former Soviet Union, North Korea, and Cuba as well as a large range of the world’s dictatorships such as Burma (Myanmar) and the former dictatorships of Latin America and southern Europe, such as the colonel’s Junta in Greece (1967–1974). But what is the state if not the executive officials running it, the members of the politburo or the members of the central committee of the party or the Junta? Both Stephen Krasner and Eric Nordlinger see the state as an amalgamation of executives making decisions without taking into consideration societal demands (Krasner 1973, Nordlinger 1981). It is not that state officials are immune to public pressure even in the most brutal regimes; a quick look at the recent protests by Buddhist monks in Myanmar can be illustrative. It is that when considering policy the state is able to shield itself from much of the public pressure and conduct its own policies (Yee 2004, 499). Sometimes, however, the ability of the state to decide on a given course of policy, shield itself from the public’s demands, and implement that particular policy is also evidenced in democratic regimes. When that is the case, political scientist talk about state intervention and state-directed development that do blur the distinction between what could be considered statism, institutionalism, corporatism, and even pluralism (Yee 2004). Such is the case of Japanese development directed by the Japanese Ministry of International Trade and Industry (MITI), highlighted by Chalmers Johnson (Johnson 1982). Another case could be French state-directed development, the Dirigist model. In these examples, the state is dominant but not exactly shielded from interest group and the public’s pressure. This brings us to the ability of common people to force (in the same outcome-focused definition of power) changes in policymaking through participating in organized interest groups. In an open pluralist system, such groups are bountiful because they represent all interests or, to express it in Truman’s terms, if there is a need for an organized interest group then a group will form and advocate that policy.9 Obviously these interest groups face organizational issues regarding what Mancur Olson called “free riding.”10 In “The End of Liberalism” Theodore Lowi argued that the process of policymaking in liberal societies is open to interest groups who compete to see different polices implemented, and this consequently leaves the state attempting to accommodate everyone, thus growing out of proportion (Lowi 1979). In Lowi’s typology the state is an open arena in which groups compete for influence in public policymaking. This theory is the cornerstone of pluralism. Not only is the state not able to impose it’s will upon society, but because certain groups have “captured” part of the bureaucracy they are able to command public policy in that area. This behavior then marks precisely “the end of liberalism,” which gives way to policymaking

66

Europe’s Greece: A Giant in the Making

being shaped by entrenched interests that emerged through interest group competition. There is, however, significant variation across time and policy area in the policymaking of the state (Mucciaroni 1995). The most basic expression of pressure politics is the local/national and European election in the case of a EU member. Additionally, expressions of pressure politics can be felt at all administrative levels within the government (i.e., local, regional, state, national) and within the political parties and other societal organizations that are in close contact with the state. Finally, some pluralists such as Charles Lindblom asserted that not all interest groups are the same or possess the same capacity to influence the policymaking process. In fact, Lindblom argues that business has a “priviledged” position in the area of interest group competition since it possesses the ability to directly influence the economy through increased—or decreased—investment (Lindblom 1976). Could we then, under these circumstances, argue that the state has any autonomy at all? The answer is provided by Evans, Rueschemeyer, and Skocpol when they write, State autonomy is not a fixed structural feature of any governmental system. It can come and it can go. This is true not only because crises may precipitate the formulation of official strategies and policies by elites or administrators who otherwise might not mobilize their own potentials for autonomous action. It is also true because the very structural potentials for autonomous state actions change over time, as the organizations of coercion and administration undergo transformations, both internally and in their relations to societal groups and to representative parts of government. (Evans, Rueschmeyer, and Skocpol 1985, 14)

Indeed, given the analysis above, one can agree that there is some overlap between statism and pluralism because, “given the nature of popular controls on the state in polyarchies, state autonomy is always a contingent possibility” (Yee 2004, 501). State autonomy is also described by theories such as corporatism and neocorporatism. In these theories the state is not treated as one unit, as it is in statism, but as the actor that creates “corporate” bodies, such as unions, public interest groups, and other syndicalist institutions to dominate their area of policymaking and assist the state in implementing such policies. For theorists of corporatism, authoritarian regimes are what Schmitter titled “state corporatism” (Schmitter 1974). There is also societal corporatism where the state does not create or directly control these interest groups in society, but it does create multiple networks with them and works to implement policy by excluding the competition. It is not an open system but an oligopolistic one, if not a monopolistic system, where interest groups dominate a policy with the blessings of the government. This type of societal corporatism is called

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neo-corporatism and is not endemic only in authoritarian regimes but also in major democracies. In his analysis of transnational linkages and the role of the state, Peter Evans describes how these linkages fuel the growth of the state and a working triangle between international capital, domestic capital, and the state for the purposes of economic development, and leave the labor unions outside the decision-making process (Evans 1995). Neo-corporatism argues that such formal developments create a strong synergy between the interest group and the state through “a political exchange in which organized interests and state agencies calculatedly, if not always willingly and enthusiastically, agree to a particular pattern of formal representation and substantive negotiation” (Schmitter 1985, 35–36). Due to the association of neo-corporatism with authoritarian regimes, the collapse of the Soviet Union, and the ascendancy of more democratic regimes around the world,11 the explanatory power of the theory has waned. However, as Mavrogordatos reminds us, neo-corporatism may still hold strong explanatory influence in sectoral cases, such as agriculture, for example. Which theory then better explains the decision-making and policy implementation process in Greece?

State-Society Relations in Greece In the wee hours of the election night on September 16, 2007, Alekos Alavanos, former leader of SYRIZA, which did better than in the previous elections, obviously elated by the electoral results, said: We thank the generation of 400 Euro, of the internet and of article 16 for their trust. We know it is a trial run. The rise of the Coalition of the Radical Left is important because it is part of new political landscape, (1) with a strong message for a leftist turn, (2) with a particularly low power for the two dominant parties, (3) with a, autonomous government on the one hand but which is weak versus a powerful social movement, (4) with the rejection of the political concurrence of PASOK and New Democracy.12

In the days that followed the election of 2007, Alavanos defended his party’s electoral success by rejecting the claims that it simply reflected a protest vote against the failure of PASOK to convince its own supporters that it has a different agenda from New Democracy.13 He argued that the vote was a genuine turn in the political outlook, especially of the young and the better educated. During his first appearance under the new parliament two weeks later, Alavanos seemed to indicate that he was willing to fight for important issues that are associated with the demands of the groups of voters he referenced the night of the election, that is, education, the environment,

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and, most importantly, the rejection of nationalism, racism, and xenophobia and its parliamentary expression.14 Naturally, the deputies of the Popular Orthodox Rally (LAOS), the first right-wing party to be in the Greek parliament in twenty-six years, to which he was referring in his speech (as xenophobic, backward, and racists, among other things), became agitated and the parliamentary exchange became heated. Both political leaders, however, seemed to agree that there is a political change that favors, first, their own political party, and second, the smaller parties. Regardless of how one thinks about the electoral results, the implication that there was a societal undercurrent for change needs to be examined, especially since the change in the existing electoral behavior of the public may lead to a change in the existing institutional structure and the state-society relations in Greece. State-society relations in Greece are nearly unanimously viewed as corporatist, even if they do not completely fit the North European model of corporatism (i.e., German Austrian model).15 Sotiropoulos argues that Greek state corporatism is the continuation of the way the state operated during more authoritarian times.16 After the military dictatorship in Greece (1967–1974), the state continued its corporatist ways aided by a political system that was rather centralized (Sotiropoulos 1996, 34). On top of that the political system of Greece was formalistic, legalistic, and top heavy (Sotiropoulos 1996, 35–37). Considering that the 1981 electoral campaign marks the consolidation of Greek democracy, because of the turnover from conservative rule to socialism, with PASOK winning the election on a campaign of “change,” its results regarding state-society relations could be viewed as rather disappointing. State structures were not dramatically changed, apart from the reduction of power of the president of the republic and the consequent increase of the power of the prime minister. To the contrary, the state was colonized by the party and the political system developed a heavily clientelist nature. Greece in the 1980s The 1980s have been described by some as the populist decade.17 Populism as a concept, however, is ambiguous and has been used in various political situations, from semi-authoritarian regimes in Latin America to democratic regimes such as Greece. Margaret Canovan argues that “Populism in modern societies is best seen as an appeal to ‘the people’ against both the established structure of power and the dominant ideas and values of society” (Canovan 1999, 3). Populism can have a very ambiguous relationship to democracy, considering that it stands against the established power structure, the established class structure, and the established institutional structure. Abts and Rummens note, “Populists offer simplistic solutions to complex political problems in a very direct language, appealing to the common sense of the

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people and denouncing the intellectualism of the established elites” (Abts and Rummens 2007, 407). In this sense, many of the world leaders, from George W. Bush to Hugo Chavez, can be considered populists because they employ the simple “antagonistic” language of “us versus them,” promise to give power to the people, and believe that “the people” are a unified lot with seemingly rational and uniform expectation regarding their government. As such, populism as a concept is refined into “a thin centered ideology which advocates the sovereign rule of people as a homogenous body” (Abts and Rummens 2007, 409).18 There is no question that a great amount of populism existed in Greece during the 1980s when the socialist party (PASOK) proceeded to win the election of 1981 and establish itself as the dominant political force in the country for the next twenty years. Sotiropoulos believes PASOK to be a truly populist party (Sotiropoulos 1996, 46) while Spourdalakis conceives the socialist party as both populist and a “catch all party” (Spourdalakis, 1989). This disagreement is important insofar as state-society relations go because the party’s perception of the politics of Greece affected the way it governed while in power. There was a transition from populism to a catchall mentality that was reinforced by the brief loss of power in 1991 and the eventual death of the founding leader of PASOK, Andreas Papandreou. The transformation of PASOK from a radical opposition party to a party of power and the status quo, as described in chapter 2, had significant consequences for state-society relations. First, there was the colonization of political institutions by the party cadre and a rather confusing first tenure of PASOK government that was attempting to navigate between the party and the government. Sotiropoulos notes that between 1981 and 1985 PASOK oversaw “the transformation of its membership from a politically conscious and militant population to a fragmented multitude of public employment seekers . . .” (Sotiropoulos 1996, 77). Second, there was the transformation of the political system with the enhancement of clienteles, a direct derivative of PASOK’s rule. The government and the party became more intertwined at the expense of public policymaking, where “the government engulfed the party after it used the party to conquer the public administration” (Sotiropoulos 1996, 77). Third, as a consequence, the previous Greek public administration was greatly weakened along with the Greek civil society that remained underdeveloped (Sotiropoulos 1995, 6). Greece in the 1990s Following a very brief and at best tenuous government rule by the conservative New Democracy Party (1990–1993), where the government attempted to limit the size of the public sector by imposing a hiring freeze in addition

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to a general policy of austerity and the prosecution of several high-ranking members of the socialist party for corruption, PASOK returned to power. It was a rather triumphant return for the late president and founder of PASOK, Andreas Papandreou, who had been accused of involvement in the largest corruption scandal in the history of the country (the so-called Koskotas affair, of which he was cleared), in addition to a personal scandal. In his acceptance speech, Papandreou made a pointed defiant appearance with his latest wife, who had been vilified by a sizable chunk of the media, including the socialist newspapers, for her past. But Papandreou’s old age and poor health basically prevented him from being the leader that PASOK deputies once knew. With the leadership of government in flux, deputies wavered, corruption in party and government increased, and it seemed that PASOK may not have the succession answer. Papandreou’s son and eventual future leader of PASOK asked his father to step down to ensure succession. Papandreou, a very charismatic leader, did resign on January 18, 1996 from the presidency of PASOK and died on June 23, 1996. The party leadership was taken over by Kostas Simitis, another economist, who had led a stabilization program of the Greek economy, between 1986 and 1987, when he resigned over a disagreement on Papandreou’s economic plans. As opposed to the traditional anticapitalist, anti-NATO, anti-EU line of early PASOK, Simitis was a Europhile and did defeat two important PASOK deputies, Gerasimos Arsenis and Akis Tsohatzopoulos, largely by being perceived as the exact opposite of the flamboyant Andreas Papandreou. He was known as a responsible economist with solid credentials and a plan that would make Greece an integral part of the EU. One may argue about the degree of achievement of such a plan, but it is an indisputable fact that the “Europeanization of Greece” proceeded rapidly under Simitis’ government due to the following “rebalancing” policies as identified by Ioakimidis: 1. loosening the state’s grip on the social institutions and reinforcing the latter’s autonomy; 2. widening existing opportunities or creating new possibilities for the participation of interest groups in the policymaking process at the national and European levels; 3. loosening Athens’ grip on the regions through a process of regional decentralization largely spurred by EU membership; 4. weakening the dominant position of the party system in Greek society and, as a consequence, diminishing the role of the traditional patronage system as a factor shaping state-society relationships; and 5. “de-externalizing” foreign policy by broadening its scope and agenda and bringing new actors into the process of policy formulation and implementation.19

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The overall changes in state-society relations are arguably on the positive side for the formerly weak civil society of Greece. Although Greece did not become Sweden overnight, it certainly made progress in terms of democratization and inclusion of societal groups previously excluded, and in terms of reforms toward a more inclusive welfare state. Far from being a modern pluralist society, however, Greece retains influences from both the Statist/corporatist system of the past, which is now infused with a newfound activism by dynamic societal groups instituting a fair amount of pluralism when it comes to public policymaking. The system of semi-pluralism or semi-corporatism has been characterized as “disjointed corporatism,” by Kostas Lavdas. In his view, disjointed corporatism “denotes the combination of a set of corporatist organizational features and a prevailing political modality that lacks diffuse reciprocity and remains incapable of brokering social pacts.”20 Lavdas looked at the Europeanization of Greece until the early 1990s through his study of the relationship between the industrial peak association (SEV) and the Greek state. These were difficult years indeed for the relations of business and government, considering the initial anticapitalist pronouncements of PASOK in the 1980s. The author was present at a local rally for a PASOK deputy in 1980 where a socialist speaker asked his audience to support putting all big capitalists in jail, especially the owner of Coca-Cola, Hellas (one assumes this is because of the unsavory nature of the particular multinational, because no other explanation was offered that night). However, radical pronouncements were generally not followed and the moderates dominated, as we saw in the discussion of chapter 2. In fact, Lavdas concludes that “on balance, it can be argued that the PASOK years strengthened the SEV.”21 Lavdas’ argument seems to point to a transformation of the system rather than a system that includes both elements. The transitory elements of the system could be better highlighted when one looks at traditional societal interest groups such as environmental, educational, and local/regional groups that seem to be making more of an impact in state-society relations (Mavrogordatos 2005). “Sectoral corporatism” may be alive considering the impact of state interests and actions upon certain societal and economic groups (Mavrogordatos 2005, 34), but its explanatory value (compared to the explanatory value of the traditional corporatist model of state-capital-labor) is diminished. In fact, it is better to talk of the transformation of Greek politics along the lines of the Europeanization theories rather than the state-society debate. If one has to consider the statesociety relationship, it may be better to research it in terms of the societal groups mentioned above, as was done by Mavrogordatos (Mavrogordatos 2005). Europeanization, however, indicates a fluid and changing environment because, first, the state appears to have increasingly less control of several traditional areas of policymaking, and second, more groups advocating

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different and sometimes contradictory policy options have appeared. Instead, disjointed corporatism indicates a status quo type of governance that includes both elements but which sees no change in state-society relations as the definition of the term argues. Categories of Interest Groups Interest group theory is well developed in American politics because its tradition of free association goes back to the days of Alexis De Tocqueville, who noted in his famous work Democracy in America (1805–1859) that it is the most apparent feature of American politics (De Tocqueville 1999). More recently, Thomas Patterson divides interest groups into two categories: economic and noneconomic (Paterson 2006, 301). Economic groups are those who have material and other tangible incentives to participate in the workings of the political process, while noneconomic groups are those whose members do not enjoy such benefits and are moved only by a shared sense of purpose, that is, purposive incentives (Patterson 2006). Most business, labor, agricultural, and professional groups belong to the first category because most of the benefits they receive can be calculated in economic terms, that is, benefits, less working hours, higher pay, and so on. Noneconomic groups, however, only enjoy what we know as public goods and as such these benefits are not exclusive but shared with everyone in society. Mancur Olson’s seminal analysis of why some groups are better organized than others points exactly to this issue of public goods. Noneconomic, or citizen groups as he also calls them, face a severe free-riding problem that makes them vulnerable and less successful than economic groups. Noneconomic groups traditionally employ more pressure techniques instead of the traditional inside lobbying in the United States. Most economic groups could employ former government employees with vast experience of the working of bureaucracy and utilize their contacts within various agencies and committees to achieve their intended objective. Noneconomic groups, due to the free-riding problem, are not as economically powerful and have to resort to what has been called “outside lobbying” (Paterson 2006). Outside lobbying, in other words, refers to the traditional route of pressure politics, street protests, letter writing campaigns, boycotts, and so on. Recent studies found that even though these actions are more antagonistic and have traditionally thought to produce limited results in pluralistic systems such as the United States, they are more effective than inside lobbying at least in the area of the environment (Agnone 2007). Jon Agnone suggests that protests affect legislation independent of public opinion, and that the effects of public opinion on legislation vary according to the intensity of protest, thus there is a positive correlation between protest and legislative action.22

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The casual observer might note that Greek citizens already knew this fact, considering the amount of public protest that Athens witnessed in the past years. More importantly, research conducted on environmental legislative activity in the United States between 1960 and 1998 suggest that the inability to provide a mediated solution within a corporatist or semi-corporatist system may be unrelated to the effectiveness and maturity of civil society (Agnone 2007). When interest groups with meager economic capabilities or new singleissue groups attempt to influence public policy, they may choose confrontation instead of mediation in order to maximize their winnable sets. Obviously, much more research needs to be conducted on this area of pressure politics, but it does partially question the relationship of interest groups and civil society. Greek Interest Groups The literature on interest groups in Greece is developed mainly by G. Mavrogordatos in his treatment of pressure groups. He acknowledges that because of the structure of the Greek political system, certain parts of the government bureaucracy can become their own pressure groups, adding to the endless conflict over securing resources (Mavrogordatos 2005). In his most well-known work, he argues that Greek interest groups are woefully underdeveloped because they operate between the political parties and the state (Mavrogordatos 1998). Political party affiliation, he argues, affects the unity of interest groups by virtue of co-opting the leadership, and the state restricts their operational field. It seems, however, that more interest groups have been formed after Greece’s accession to the EU, especially what I call here citizen (or noneconomic) interest groups. Following Almond’s treatment of pressure groups in developing societies,23 Mavrogordatos’ categorization of Greek interest groups includes four types: (a) anomic, (b) nonassociational, (c) institutional, and (d) associational groups. Using this breakdown, Mavrogordatos separates the actions of government employees from those of business associations and labor unions, even though at the end of the day they all lay the same demands on the system, that is, tangible benefits. The economic groups that are expected to dominate the Greek policy environment are business groups. G. T. Mavrogordatos notes that this assertion is problematic for the following reasons: (a) inter-sectoral competition; (b) size, since bigger groups are more able to act independently; and (c) business tends to see the state as their extension. There is, however, a long history of business associations in Greece going back to the nineteenth century. The most important is the Confederation of Greek Industries (Sindesmos Ellinikon Biomixanion, or SEV) that has emerged as the peak association for larger industrial units and became a dominant partner in the corporatist system of economic policymaking in Greece (Lavdas 1997, Lavdas 2005,

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Mavrogordatos 2005). SEV’s importance was increased by the opening of the Greek economy in and after the 1990s. Greek economic interests have been involved heavily in the Balkans and have extended in Eastern Europe while the domestic economy has been growing in the past decade at levels higher than the European Union average. Both ministers of economics in Greece under the Simitis New Democracy government, formerly Nikos Christodoulakis and currently George Alogoskoufis, viewed this type of growth as highly desirable for the country, especially since at that time Greece was aiming for its inclusion to the Eurozone.24 On the other hand, although labor unions often lose membership over the years, as is the case in the United States, in the case of Greece they do not seem to lose power perhaps because their approach to collective bargaining is more confrontational. It seems from the table below (table 4.2) that one or two observations can be made that relate to the impact of labor union mobilization through Table 4.2 Strikes in Greece Year 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999* 2002**

No. of Strikers

No. of Strikes

Working hours lost

46,374 300,759 559,858 471,305 1,262,443 1,407,821 401,757 354,315 224,265 155,318 785,725 1,106,420 1,609,175 449,441 795,744 1,405,497 476,582 969,484 501,274 226,155 120,250 233,674 216,799 214,546 4,411 103,294

142 947 569 616 588 726 466 968 585 280 456 214 249 320 207 200 161 166 83 56 43 31 36 38 15 23

1,743,363 6,145,245 9,643,823 7,406,087 12,255,273 20,494,944 5,960,988 9,731,263 3,881,889 3,350,324 7,660,879 8,839,369 16,537,686 6,523,896 9,280,631 20,335,313 5,839,663 7,072,008 3,509,044 1,872,899 660,630 1,633,508 1,522,577 1,515,347 45,618 816,913

* Only first five months, ** Only the first six months, ***Elections years in bold. Source: From http://www.eurofound.europa.eu/eiro/2003/02/feature/gr0302102f.htm, from the Ministry of Labor.

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confrontation: first, there is a decline in the number of strikes by labor unions in the 1990s; and second, strikes and labor mobilization happen at a higher level during election years (Katsoridas and Kollias 2003). In addition to the traditional conflict between labor and business, economic groups in Greece include the agricultural sector, which in Greece is by no means negligible. In fact, starting in 1996, agricultural strikes seem to dominate the news during the winter in Greece, with large mobilizations. Mavrogordatos believes that agriculture is in essence the strongest state corporatist system Greece has, with the Greek state dominating the movement (Mavrogordatos 2005). PASEGES, the peak association of the Greek agricultural workers, has traditionally allied itself with the governing party, especially since the Greek accession to the EU that brought enormous funds into the agricultural sectors between 1981 and 1985 (Louloudis and Maraveyas 1997). Because of these developments and because of the rent-seeking behavior of Greek farmers, many of whom are not farmers at all, every bit of the agricultural sector became politicized in the 1980s and defended its prerogatives very vocally in the 1990s. In a recent study of the prices of agricultural land in nearly 40 percent of municipalities in Greece, Karafotakis, Mylonakis, and Kountouris found that the greatest distortion of the price of agricultural land in Greece comes from the dual occupation of its owners, that is, the fact that owners of agricultural land in Greece (as well as in countries like the United States) often have a different occupation25 (Karafotakis, Mylonakis, and Kountouris 2006). Another important interest group in most societies comprises the professional associations, which in the United States are in ascension. Greece is no exception, with interests organized along institutional lines, such as the military, law and order groups, priests and other religious leaders, university professors, as well as lawyers and judges. The main difference between Greece and the United States is that most of the above do not work for the federal government as in the United States, but are either self-employed or work for state governments such as law enforcement officials and judges. The biggest interest group in the United States is arguably the military. In his farewell address to the nation on January 19, 1961, President Eisenhower warned of the existence of a military-industrial complex (MIC).26 In Greece, the military is one among several powerful groups that dominate a significant percentage of the gross domestic product (GDP). Between 1985 and 1999, Greek defense spending was 5.8 percent of GDP while the average spending of NATO counterparts was 3.3 percent of GDP and EU counterparts averaged 2.5 percent of GDP (Kollias and Paleologou 2003, 437). This high military expenditure should at least partially be viewed as a result of domestic interest group actions (Kollias and Paleologou, 2003). A close correlate is the effect of such groups, military or otherwise, upon Greek

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foreign policy. Stefanidis argues that this is especially the case in very important and visible cases in Greece, such as the Cyprus problem or FYROM (Stefanidis 2001). The budget, as well as the public policy process in general, is influenced by the Greek Orthodox Church, as we have seen in chapter 3. The Church put enormous pressure upon the Greek government regarding the national identification card issue, the history books issue, the abortion issue, the “Macedonian” issue,27 and Greek foreign policy in the Balkans in general. Moreover, internal Church issues regarding the monastic community of Agion Oros,28 the Patriarchate of Jerusalem,29 and the Church finances30 have dominated headlines in the past few years, signifying the importance of such groups in Greece. University professors as well have a powerful lobby in Greece. Mavrogordatos notes that in 1975 their representatives convinced the then prime minister Karamanlis to allow them to be elected to the Greek parliament without having to relinquish their position at the universities (Mavrogordatos 2005, 61). Thus, in the battle for dominance of the Greek socialist party, when things got out of hand and heated exchanges took place between Papandreou and Venizelos, a former minister in socialist governments and PASOK heavyweight, the former indirectly accused the latter that he was defending certain interests, which prompted Venizelos to question Papandreou’s personal finances, and also stating that he has been working all his life, alluding that Papandreou did not work in such manner. After all, Papandreou was the scion of the Papandreou dynasty and born a professional politician while Venizelos, among others things, is a professor of Constitutional Law at the Aristotelian University of Thessaloniki. Most importantly, university professors were at the forefront of the battle against university reform in Greece, fighting for their positions as noted by their representatives of the Hellenic Federation of University Teachers’ Associations (POSDEP).31 Last but not least, the attorneys and judges associations are particularly powerful in Greece. In fact they are so powerful, Mavrogordatos notes, they violated the Greek constitution by calling for a strike on March 1, 1985 (Mavrogordatos 2005, 73). The power of the unchecked Greek judiciary allowed some judges to create an unprecedented illegal network that peddled favors in 2005 to priests, lawyers, judges, and politicians for financial gain.32 When the former president of Greece, Kostantinos Karamanlis, urged the Greek judges and prosecutors to follow the example set by the Italian magistrates in their war against the Italian Mafia, he had no idea that certain legal minds were part of the problem. Evidently, the Greek interest groups behave in similar ways as their counterparts in the United states, albeit less effectively, since they have to concede

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much ground to the political parties that in the European tradition are more organized and less permeable than their US counterparts. Nevertheless, interest groups find their way in the policymaking process more often than not in a way that resembles the ability, but not the process, by which US interest group affect policy. Much of the process is dominated by economic interest groups who have developed strong, some say unbreakable,33 ties to the state. Noneconomic groups are typically overshadowed, but they vie for a place in the sun every so often, depending on the issue they are supporting. Greek Civil Society Noneconomic or citizens groups are important when assessing the strength of civil society in a country or to measure its existing social capital. It appears that there is a correlation, as Robert Putnam puts it in his seminal work on civic traditions in Italy (Putnam 1994), between the strength of civil society or “civic community,” on the one hand, and economic modernity, institutional performance, and thus the quality of democracy in country, on the other (Putnam 1994, 15). There are a multitude of perspectives on the impact of social capital range, and the concept has become widely used and debated within the social sciences. The term social capital was originally coined to describe the norms and expectations that underlie market behaviors (Coleman 1990). Lately it includes not only economic behavior but also cultural behavior, so, just as it applies to the market it may also apply to society (Fukuyama 1995). Sotiropoulos argues that there are two types of social capital: (a) positive and (b) negative (Sotiropoulos 1995). Positive social capital goes along the lines of Putnam’s work by describing networks and norms in civil engagement in which people in society participate in community activities and thus create both a private good for themselves and a public one for society (Putnam 2000). Positive social capital, similar to what Putnam calls bridging social capital (Putnam 2000, 22) thus comes from civic participation and engagement in community governance. Negative social capital comes from building group identity by producing barriers to belonging (Sotiropoulos 2005), which is similar to what Putnam calls bonding social capital (Putnam 2000, 22). Engagement in politics or engagement in general has important consequences for the relationship between state and society. In fact, the expectation in the aforementioned works is that the more civic engagement, the better the democratic values and governance in a state. However, when one looks at the political developments in Central and East European societies (CEE), the more active the civil society, the more conflict there is with the state because civil society mechanisms (i.e., citizen groups) often actively opposed the dominant state (Foley and Edwards, 1996).

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Sotiropoulos argues that negative social capital came to be developed in CEE because of the weakness of the state that necessitated the building of close-knit social networks that act as “social fences” (Sotiropoulos 2005, 245). Thus, the paradox of Greece, as will be elaborated in the next chapter, is regarding the ability of the state to dominate interests, just as the ancient villain Procrustes’s attempt to adjust travelers to Athens to fit his table (Mavrogordatos 1998). And then again, it reflects the ability of civil society groups to dominate a weak and malfunctioning state that they are unhappy about through different acts of nonconformism. In the words of Greek sociologist K. Tsoukalas, It remains a fact that Greeks are stillborn and socialized to the tunes of an anarchic individualism, which considers liberty as coterminous with total irresponsibility towards the collectivity, the law, and the others. In a certain sense, it is an individualism operating and reacting toward powers still exercised “upon” the social corps and not “within” it. (Tsoukalas 1995)

This is a fairly damning view of modern Greek society, and it is not the only one of its kind. Others have noted that the Greek voluntary sector is ubiquitously weak (Lyberaki and Paraskevopoulos 2002) and that a general lack of interest in voluntary organizations reveals a “widespread apathy and lack of civil engagement” in modern-day Greece (Sotiropoulos and Karamagioli 2006, 9). What are the reasons that Greek civil society displays such a weak ability to create social capital and trust? Sotiropoulos and Karamagioli argue that there are two reasons: (a) the economic and political instability of modern Greece, and (b) the society’s heavy dependence on central state institutions (Sotiropoulos and Karamagioli 2006, 19–20). Considering that postauthoritarian Greece has developed enough to participate in the Eurozone and has full programmatic and legal/constitutional adherence to issues of civil rights and civil liberties as understood throughout the European Union, these results are baffling. In addition, given the fact that the personal values of Greeks are positive (Sotiropoulos Karamagioli 2006, 10), it is surprising that civil society exhibits such weakness vis-à-vis the state. The state has been able to dominate much of the productive capacities in the country, considering the high number of people that work for the Greek government (Tsoukalas 1995, 202–204). The state has been able to co-opt institutions that may challenge its hold on society even in the face of increased pressure by the European Union to devolve powers to local and regional levels and promote programs decided at the closest level to the citizens instead of to the bureaucracy in the nation’s capital. In such an environment, transparency is key to promoting such policies, and Greece traditionally is viewed as

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more corrupt than most of its European partners. Many of the scandals that have impacted the outcome of Greek elections (discussed above, as well as in chapter 2) indicate that transparency is indeed lacking in Greece. Nontransparent relations within civil society breeds clienteles, secretive groups, corruption, and inhibits the workings of civil society by inhibiting the building of social trust (Rothstein and Uslaner 2005). In such a society, people hardly have the time for volunteerism and participation in associations and organizations. Moreover, one may suggest that the colonization of the state by the political party, which started in the 1980s, has had lasting effects upon the way society in general views state-society relations. In data presented by Kapa research for the newspaper To Vima, as well as a more recent study by Public Issue group for the newspaper Kathimerini and the TV station Skai, we see these views better illustrated.34 When asked about their top concerns, the public indicate economic woes as the most important and they clearly expect the government to supply the answers. Naturally, the questions also include a rating of which political party would be better equipped to provide solutions and the answer is that neither of the parties is very well equipped to do so (although the conservatives get a much better rating). Analyst G. Mavris considers these results to be a strong indication of the changing times and the waning support for the two-party system in Greece.35 However, Greek civil society is so far thought to be weak and unable to make any meaningful contribution to the creation of social capital and trust. While the paradox of this claim will be treated in the next chapter, suffice to say that this is a static view of civil society, a “snapshot” of what civil society looks like. Once we consider civil society as a continuously unfolding project instead of taking it for granted, most people would agree that even countries with high social capital and trust still need to promote activities for building civil society, such as projects in deliberative democracy, participatory public policy, flexible policymaking, and so on, in order to preserve what they have. Conclusion At the closing of the constitutional convention that created the United States government in 1787, Benjamin Franklin responded to the inquiries of Ms. Powell, as to what government the former colonies finally agreed upon, by saying, “A Republic, if you can keep it.” Political systems are changing, or, as some would say, evolving, based on internal and external stimuli. In the aftermath of the end of ideology with the collapse of the Soviet Union, or as Fukuyama called it, “The end of history,” people turned away from their fierce ideological struggles. Politicians such as President Clinton and Prime Minister Tony Blair (before 2000) responded by emphasizing their

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managerial roles and defending the “third way” as a way of governance in post–cold war societies. Some have argued that this strategy did not last and that European and North American political systems have changed because of the attacks of September 11, 2001 that led politicians to emphasize their ability to prevent “nightmares” from coming true, that is, terrorism, nuclear proliferation, and so on. To say that Greek state-society relations have only evolved slightly since World War II, or in the post-authoritarian era, or, indeed, only after 1996, and that Greece is locked in this type of societal statism is, I suggest, not true. It is not true because it fails to capture both the dynamics of an evolving system that is affected by the membership of Greece to the European Union and the changing times that the country is facing since the collapse of the cold war era. The suggestion also fails to capture changes in the Greek economy, as well as the ever evolving state-society relations. In the context of an increasingly affluent Greece, state-society relations have been reshaped primarily by Greece’s membership to the EU and other factors such as Greek involvement in the broader Balkan region.

Chapter 5

Greece: A Country of Paradoxes I            several contradictory views of the past twenty-five years in the history of Greece. Although there are many issues on which experts disagree, two of them stand out. First, there is disagreement over what behavior would be most appropriate on any given policy for a country like Greece since it became a member of the European Union. Second, and more importantly, there is disagreement on the evaluation of the outcomes over the past twenty-five years; for instance, while some recognize a somewhat successful modernization in the past decade others see a complete failure.1 On the successful side are experts of the political system of Greece who argue that democratization has been a successful venture not only in Greece but throughout South Europe. Those who evaluate present-day policies and the conduct of the Greek civil society are more cautious about heaping praise on Greece’s democratization, while liberal economists and some leftists are highly critical and pessimistic about Greece’s future. This categorization, albeit spurious and ill defined, shows that there is disagreement on how to understand the recent political and economic developments in Greece. Therefore, I propose that we use the concept of “Europeanization” to understand what has happened in Greece over the past twenty-five years. Although Europeanization as a term can be rather ambiguous, as I already noted in chapter 1, it has been used by many researchers to explain the process in which a member country has adapted to the new European environment after obtaining its membership into the European Union. Researchers normally ask such questions as: How does membership affect the member state? What policies have changed because of membership? How do people and organizations adapt to their new environment? These are all legitimate questions, and today we have a number of excellent studies on member

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states, in both single and comparative case studies, to help us understand Europeanization better. Greece, being one of the small peripheral countries in the EU, is mostly a decision taker rather than a decision maker, which seems to indicate that the onus of adaptation would be on the side of Greek institutions, Greek elites, and Greek society rather than on EU. This is partially why the first government of Greece after gaining EU membership, the 1981–1985 PASOK government under Andreas Papandreou, viewed the EU in a hostile manner, promised to sever its links with it, and eventually was seen as obstructionist and rather difficult to work with by the rest of the European member states. As I have indicated in the previous chapters, there are several reasons for PASOK’s attitudes toward the EEC in those days, but the most important one was ideological. PASOK’s view of the EEC was through the lenses of colonial domination, imperial meddling in Greek affairs, and capitalist domination of the working classes, which meant that Greek social injustices would persist under EEC rule. In fact there was even some apprehension about to the economic program PASOK would follow given that it would certainly be resisted by global capitalism and its proponents. It turns out that much of the thinking about the EU was exaggerated, given the political circumstance of postwar Greece, and successive governments, even ones led by Andreas Papandreou, would embrace the European project and work within its framework. The Greek public is one of the most Europhile publics among EU members and sees the EU in a positive manner, sometimes in better light than its own domestic institutions.2 Much of this change of heart at the government level happened because of both domestic and international reasons, such as the decline of the ideological divisions all over Europe as well as the consolidation of Greek democratic institutions and the more realist assessment of the EU in light of the inflow of hard currency. Greece, the reluctant European, became an important EU advocate, especially in a neighborhood full of fledgling post-authoritarian states with tremendous domestic problems. One should not only ask how Europe affects its member states and vice versa, but also how much Europeanization is expected of the states. To say that a country is “Europeanizing” is to say that the country was never wholly or partially European at all. Could we seriously argue that Greece is not a European country? Such an argument wouldn’t make geographical sense, but in political and economic terms Greece has always been considered, by foreigners and Greeks alike, as a more distant eastern cousin of Europe than a mainstream European country. But even major European countries at the helm of the Europeanization project use the term to understand their existence in a new spatial arrangement in the geographical area called Europe. Europeanization, to them, is not about institutional adaptation, but the

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implication may not be dismissed that to “Europeanize” for a state may mean to either fall in line with the major European norms or to become part of geographical Europe. Could a member state be European and nonEuropean at the same time? (Hibou 2005, 235). This brings me to the existence of the Greek paradox as the member state that is both European par excellence and non-European at the same time. Obviously, the “Greek Paradox,” a term coined by Gianna AngelopoulosDaskalaki and G. T. Allison, refers to the chasm between promise and performance, as the title of their book indicates.3 Although not fully articulated, the Greek paradox seems to indicate that the performance of Greece is lackluster within the European Union, that is, until the financial and intellectual hand behind the project was able to solve it. Gianna AngelopoulosDaskalaki, the former president of the Athens 2004 Olympic committee, recently argued in front of a Harvard audience that the successful Olympic games of Athens in 2004 was an indication of how Greece itself has overcome the paradox.4 It is true that the country’s economy has been growing, and several of its sectors have been performing rather well. But it is also true that the country faces several rather difficult socioeconomic and political problems that could derail this economic growth and quell the exuberance. Economic problems such as pension reform, health care, transportation, household credit and investment could prove fatal at any point unless they are dealt with. It is a challenge that has proven nearly impossible for the socialist governments to overcome, and it could prove as elusive for the conservative ones. Hence, according to Angelopoulos-Daskalaki and Allison, there lies the paradox of Greece searching for the magic formula to overcome what holds her back. Three Paradoxes in Search of a Solution A paradox is a situation that is difficult to understand because it contains two opposing facts or characteristics and seems to defy intuition. By arguing that Greece presents a paradox the authors of The Greek Paradox are indicating that even though Greece has the potential, it is underperforming consistently in the areas of politics, economics, and foreign relations (Allison and Nicolaides 1997). Looking at what Greece has achieved in the past three decades and what remains a challenge for her, one immediately notices three areas of concern: (a) society and politics, (b) politics and public policy, and (c) foreign policy and the economy. In society and politics, one must consider the difference between what is expected of Greece in areas such as civil society, state-society relations, and regionalism, and what is achieved. Have relations between state and society been transformed because of Greece’s accession to the EU, and if yes, in

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what ways? Does this transformation proceed along the same lines as that of similar member countries? In terms of public policy and politics, one must look at the achievements that successive Greek governments were able to bring forth and compare them to their failures. How does Greece compare along these lines with EU members most similar to it? And in terms of the economy, a similar comparison must take place in order for the reader to assess whether Greece has been making any progress since its membership in the EU. Society and Politics The paradox of society and politics is that the birth place of democracy has an underperforming government (Allison and Daskalakis 1997). The argument has been made that many countries, including the world’s only superpower, have governments that are underperforming and are unable to solve the truly important issues of our day.5 This narrative of Greece, as well as the other southern European member states in the European Union, has been questioned by Tanja Borzel when discussing noncompliance with EU environmental law (Borzel 2000). Although Borzel finds Greece to be a laggard in terms of implementing environmental policy, she successfully casts doubt on the notion of a North-South divide, showing that both leaders and laggards have problems in the area of environmental law. This is not to say that the performances of the Greek government and society do not need any improvement or that one may not look at what has been happening in the country with a critical eye, but it does put the discussion of Greek society in a context. How high could the expectations of a country that returned to democracy in 1974 and became a member state of the EU in 1981 be? One observer argues that Europeanization can be categorized into two types: (a) responsive; and (b) intended. As such, Greece has changed over time from responsive to intended in its dealings with the EU (Ioakimidis 2001, 74). Responsive Europeanization is the process in which member states follow European directives without internalizing the underlying reasoning or adopting the institutional structure that is needed to continue in that particular policy path. Intended Europeanization is the opposite, with member states accepting the need for changes in their public policies and adapting not only to the spirit of the directives/public policy choices but also their institutional structure in order to better perform. Indeed, Greece spent the 1990s attempting to transform its EU membership into a meaningful productive and intended participation. As the transformation of Greek institutions and sets of beliefs regarding the nation’s future and the nature of their membership in the EU continues, the economic situation and attitude toward public policy are getting better, even though much remains

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to be done. However, not all commentators are in agreement. In a recent BBC blog on European subsidies abuse, Mark Mardell writes, “Privately, officials say that Greece is perhaps the worst offender, the problem child with a long record of incompetent accounting.”6 But his whole description is a subsidy system wrongly designed by the EU to begin with, which invites abuse by the participants both at state and individual level, the vast majority of whom do not live in Greece but rather in larger member states. Looking at table 5.1, we see that Greece is clearly not the outlier, and Mardell’s comments are not accurate. They do, however, tend to be taken for granted not only by the European public but some of the scholars discussed in the beginning of this book. The interesting number in the table above shows how many of the complaints as a percentage were converted to actual proceedings, and in the case of Greece it goes up slightly. It seems that Greece lacks the capacity of dealing with EU Law compliance problems once they have been identified. As explained by Borzel herself, this might be the problematic result of weak scientific and verification infrastructure that do not report compliance, rather than actual infringements of law or violations (Borzel 2003, 8–10). Others using the European Antifraud Office data add to the criticism, saying that the North-South divide may not be accurate at all (Hibou 2005). In fact, it is nearly impossible to identify member states’ fraudulent activities given the fact that only nine members reported antifraud activities to the EU in 2003.7 Table 5.1 Member States compared by population, complaints, and infringement proceedings opened in 1983–1999

Germany France UK Italy Spain Netherlands Greece Belgium Portugal Denmark Ireland Luxemburg

Percentage of EU population (%)

Average Transposition Rate (%)

Average percentage of complaints (%)

Average percentage of suspected infringements (%)

21.9 15.7 15.7 15.3 10.6 4.2 2.8 2.7 2.6 1.4 1.0 0.1

92 94 90 75 90 96 84 87 90 99 90 91

11.9 16.8 9.9 12.9 17.6 3.5 10.5 5.1 4.5 2.6 3.8 0.9

11.93 10.07 18.46 7.91 21.93 2.35 8.56 3.64 4.39 1.77 7.29 1.07

Source: Compiled from T. Borzel, Environmental Laggards and Leaders, London, Ashgate Publishing, 2003, 9; and T. Borzel, “Why there is no ‘southern problem.’ On Environmental Leaders and Laggards in the European Union,” Journal of European Public Policy 7, 1 (March 2000): 145–147.

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In addition, no data exists comparing different periods of the EU activities. Thus, the North-South narrative does not account for the slow transformation of member states when it occurs, regardless of whether it is positive or negative. One can safely say that instead of a compliance problem, Greece may have an image problem. Thus the paradox of Greece’s Europeanization isn’t that it behaves rather badly—as an outlier or the proverbial “black sheep”—but rather that it is merely perceived as the most problematic country despite the fact that it behaves within the norms of the EU. The biggest challenge to Greece’s future in regard to society is its “European” identity. The country has been plagued by a garrison state mentality in most of its modern existence, with its apex being the invasion of Cyprus by the Turkish military and the significant loss of territory at the end of a disastrous seven-year rule by the Colonel’s junta. Becoming a member of the EU, as we already have seen in chapter 2, was Greece’s leadership plan to anchor Greece in the Western alliance and make it safer, when in fact the West had not helped at all. If anything, it facilitated the breaking of international law in Cyprus. The garrison state mentality is not only the product of centuries-long anxieties that develop among uneasy neighbors, but also of recent events in European history in which the Greeks did not fare so well. Moreover, Balkan nationalisms and their violent expression in the 1990s added fuel to this fire of garrison state mentality. Greece became the only country whose majority turned a blind eye on Serbian atrocities and questioned both the European and US involvement in the region. With the help and hindsight of nearly a decade’s analysis of the events during the collapse of the Yugoslav federation, one may argue that Greece was at least partially right in its objections of the NATO plans. Nevertheless, the changing status quo in the region fuelled Greece’s fears of its own future. Although partially right in their arguments for peace and security in the Balkans, Greek society had a hard time containing its fears, and they boiled over, to the detriment of its northern neighbor, Former Yugoslav Republic of Macedonia (FYROM). Societal reaction was virulent and the Greek government’s position on the issue was extreme. In terms of identity, the paradox of promise versus performance may be accurate indeed. Greece has had a hard time dealing with its societal transformation and has been unable to alter its understanding of what her position in the region and the world can be. Although it has been much easier for the Greeks to change their behavior in the economic sphere, and although they have become more pragmatic and outward looking, their self image is fairly negative. Interaction at the international level both within the EU and at the global level has not been followed by societal cosmopolitanism even though the Greeks seem to be very happy with their membership in the EU and place high trust in European institutions and processes. It appears that

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the Greeks in general are not worried about the coexistence of a European identity with a Greek one, but there are several elements of Greek identity that run counter to those of Europe and may necessarily have to be amended (Panagiotopoulou 1997). The primary reason that the Greeks may not be worried about European identity issues has been correctly identified by Antoniou and Soysal when they argue that Greeks view their own history as linear and based on a conception of time. It is the continuity of history from the antiquity to Byzantium to the Modern Greek state, this image of continuity makes the current Greeks the inheritors of the traditions of Ancient Greece, which, of course, have been adopted as the beginnings of Western civilization by the West (Antoniou and Soysal 2005). Anthropological and historiographical arguments of the impact of European scholars on the development of the Greek identity aside, the Greeks believe that they are of Europe. As I discussed in chapter 1, this argument was accepted at face value during the accession negotiations with the European Union’s predecessor, the European Economic Community (EEC). It is a fact that Greece, at the time of accession, did not possess the economic and social development to become the sole country of the second enlargement. It is also a fact that the European member states at that time made a political decision based partially on Greece’s successful argument that the cradle of Western civilization must be a part of Europe. Nonetheless, the construction of Greek identity over time and the idea of linear “national time” (Antoniou and Soysal 2005, 106) create a problem of conformity with the present-day understanding of “Europeanness,” especially since this identity becomes entangled in major policy issues. For example, the distinction between who is an ethnic Greek, who is a returning Greek, and who is an alien has been debated since the collapse of the Soviet Union and Yugoslavia in the beginning of the 1990s. That particular debate points to the ethnic features of Greek identity that effect policy, as I have shown in chapter 3, in areas such as the identity cards, immigration, the history book debate, the issue of Macedonia, and so on, Issues such as these marginalize Greece further in the eyes of the other European member states, but they are essential in the articulation of the role Greece sees itself playing within the EU. Even though they could strain the country’s relationship with its partners, they do not seem to have caused irreparable damage. This is partially because the political system in Greece “includes both strong ethnic and civic features, which are dynamically organized and interact with the changing international context and internal needs of society” (Triandafyllidou and Veikou 2002, 195). Nonetheless, there are important fault lines regarding Greek identity both internally (i.e., the view of the self and the “other” within Greek society) and externally (i.e., the view of Greek identity versus its European partners and its nonEuropean neighbors).

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Greek attitudes have vastly transformed since the collapse of the border between Albania and Greece, in addition to the collapse of the Berlin wall, which produced a massive wave of immigration and repatriation that admittedly overwhelmed the country. The wave of immigration starting in the early 1990s impacted Greek identity by highlighting its ethnocentrism. One primary example is the education system’s success at reconstructing Greek identity from the time of Greek independence. It now has to adjust to the new realities and an uncertain identity, a problem that is exacerbated by EU membership. Immigrant populations mostly in transition to northern Europe use Greece, among others such as Italy and Spain, as an entry point. Many of these immigrants become part of Greece’s mostly illegal immigrant populations due to their inability to move on, whether because of financial reasons or because they decide to remain in Greece because its economy is much better than that of their country of origin. In addition to illegal immigrants, repatriated Greeks from Albania and many other countries from Eastern Europe also need to be included in the school system. It is generally believed that the total number of immigrants in Greece (both legal and undocumented) is approximately 12 percent of the total population of the country (Triandafyllidou 2007, 78). Considering that the vast majority of these immigrants are undocumented, the immigration problem in Greece could be considered staggeringly large. It is difficult to see how a small country that had an exodus of immigrants fifty years ago, and had no immigration into the country twenty-five years ago, is now facing such a large volume of immigrant population. The immigration problem is not simply one of administrative adjustment. Immigration affects public policy in a very real way, as shown by the number of foreign students in Greek schools. Immigration affects the Greek economy in positive and negative ways. On the positive side, cheap labor provides a check on inflation and human capital in the most underdeveloped sectors of the Greek economy. But its negative effect is the burden on the Greek economy through additional social expenses. It also prevents the economy from adapting new, more efficient techniques in the sectors that use immigrant labor-intensive practices. Moreover, as Lianos shows, there is significant loss of human capital due to both the overeducated, underemployed Greek labor force, and mainly the overeducated immigrant labor force that is mostly working in manual labor and menial tasks (Lianos 2007). The enormity of the issue makes dealing with it at the national level extremely difficult and has humbled consecutive Greek governments on both sides of the spectrum. Considering that the Greek immigration problem had several nation-specific peculiarities, it is easy to see why it became a problem. First, the immigrant waves coincided with a rise in crime, and the Greek authorities were visibly unable to deal

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with the problem, from defending the borders to ensuring the safety of the population. Second, the increase in immigration coincided with the rise of the free Greek media. The media’s role in the public affairs of Greece cannot be underestimated, not only because there are now many more outlets where these issues could be highlighted but also because of the nature of the media to add to the public’s insecurities by sensationalizing the problem. Immigration as an issue serves the same purpose in the United States, and anyone who has followed the news understands the importance of stories that either vilify immigrants or vilify the state and its inability to deal with the issue.8 The issue of national identity is not, however, limited to the impact of the large immigrant population or other minorities in Greece. It also includes the impact of the EU upon Greek identity itself. As I have argued earlier, the creation of the EU and the push for a new European identity was not necessarily viewed antagonistically by the Greeks. There is, however, the question of the existing subnational or regional identities that already exist in Greece and their performance in the new European Union. To be a Greek within the EU is fairly banal, but what does it mean to be a Pontian-Greek or a Cretan-Greek? The reader may ask why subnational or regional identities matter at the time of the EU and globalization. The obvious answer is that they may or may not be amenable to the new challenges they face. If they are amenable, they may be a positive contributor to the development of Greece, but if they are not, they may be an inhibitor to the development of a European identity in Greece, or for that matter in any of the member states they exist. Considering that there are many countries such as Spain, Belgium, Romania, Slovakia, and Bulgaria, just to name a few that face this type of issue, the answer to this riddle may provide policy clues in the development of further ties within the EU. Some of the states mentioned above, such as Spain and Belgium, have dealt with regional ethnic and linguistic problems before their accession to the EU, and their political system reflects this reality. Greece and the Central and East European (CEE) member states, however, have not, and they seem to be the best laboratories for understanding such important social forces. Geographical and regional identities in Greece may affect the foreign policies of Greece because, after all, Greece is located in the Balkans where nations have been forged in the fires of irredentist wars. To be a “Pontian-Greek” means to have ties, and for some even claims, to the Black Sea area of northern Turkey and the Republic of Georgia, while to be a “Vorio-Ipirotis,” a Greek-Albanian, has meant for a very long time living on the wrong side of a very nasty border. Not only do these types of regional identities impose difficulties within Greece, but they also spill into neighboring states. An Albanian citizen with ties to Fatos Nano, leader of the opposition in Albania, complained to me

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that his opponents call him derogatorily “the Greek,” even though he is not, because of his ties to southern Albania, which is mostly Christian and dominated by a large Greek minority. It is that minority, in addition to ethnic Albanians, that constitutes the largest part, unrivaled by any other group, of immigrants in Greece today and provides much of the wealth in that country presently. Needless to say that the construction of a Greek identity allows for a Diaspora of Greeks, of which I am one, and when in Greece as foreign born immigrants of Greek decent, they are treated differently than foreigners (Triandafyllidou and Veikou 2002). In addition to these identities, there is a geographical division in the country that, while expressed mostly in sports, often affects politics and public policy. This is reminiscent of the North-South divide in Italy or the regional identities of the United States. The most recent example of such a display was the Panhellenic Socialist Party’s (PASOK) conduct after its defeat in the 2007 election. As I discussed in chapter 2, the day after was not tumultuous for PASOK, which went to its congress in order to elect a new leader. Each candidate hailed from a different region and won popular support in their respective regions. The Peleponnese son of Andreas Papandreau won support in the south. Evaggelos Venizelos’s reputation in Thessalonica won him the support of the north. And Kostas Skandalidis, the former party secretary, won the support of his home in the Agean Islands of Dodecanese. This would be no different than an American candidate in the US primaries getting the home state approval, unless it involved a rather elaborate web of social, linguistic, and historical relationships. Nicolacopoulos argued that this division is historically explainable because in Macedonia during the beginning of the nineteenth century the now all but defunct Greek liberal party dominated, but the alteration of the population after the loss of the wars with Turkey and the influx of the expelled populations of the Asia Minor in Greece changed the demography. Finally, after their division along the left and the right of the political spectrum came the collapse of the Liberal party. Yet, because of the ascension of the right, Macedonia was able to elect its own prime minister, Kostantinos Karamanlis, who led the country into the European Union.9 The regional breakdown of the voting pattern in the PASOK congress only illustrates the dynamics of how different parts of Greece relate to one another as well as the central government. It is that particular relationship with the central government that may be fanning the flames of these identities, considering that many regions, northerners most vocally, complain of neglect by the central government that allegedly pays attention only to Athens. This is obviously very easy to discern in sports, especially in football, where Athenian teams dominate all others in the country. Conflicting identities, it seems, play a role in Greece’s perception of its own role within the EU. Part of Greece, as we will see in the next section

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and will be elaborated on in the next chapter, sees itself as the dominant economic power in the Balkans, and it is projecting this power with expanding economic activities. Yet, another part of the country sees itself dwarfed by the grandiose European project and feel threatened by its inability to control the events that will determine its future. Neither one, however, seems to want to quit and revert to the status quo ante because EU membership seems to carry with it the promise of independence from the central government and the creation of a more rational and liberal state in Greece. The economic impact of the EU in Greek life has been positive, and therefore the expectation is that it will continue to do so in the future. Public Policy and the Economy The second paradox noted in this book is the “industrialization paradox.” The industrialization paradox takes place in a society apathetic toward its future because of changing demands on its identity and a climate of doubt for its entrenched political system. The main features of this system are: (a) statism, an obstinate public sector aided by entrenched interests countering an increasingly educated, youthful, and highly unemployed public demanding change, and (b) a traditional “merchant culture,” which is aiding the Greek economy to expand its activities throughout the Balkans and Eastern Europe. In this sense, one can argue that Greek politics work against efficient economic activity. Yet, Greece has been over-performing and outstripping its European partners in growth and economic development in the past half decade, with few exceptions, but it has yet to make a breakthrough precisely because of political issues that affect its economic performance. Issues such as public sector spending, especially pension reform and social expenditures, as well as administrative adaptation and reversing economic nationalism have been the main impediments to additional progress. The industrialization paradox is closely related to what T. Papaspyrou terms the paradox of slow reform and high growth (Papaspyrou 2007). Once we are able to deconstruct this paradox, we will be able to understand the industrialization paradox and engage in a brief comparison between models of economic development within the EU, which will allow some general prescription to develop regarding Greece’s future direction. Where do these two interrelated economic paradoxes come from? Again, the importance of identity, historical development, and the physical constraints of being in the Balkans cannot be underestimated. The way people relate to their political environment—their behavior within the political system—could be called political culture (Almond et al. 2004). The formation of political culture is called political socialization (Almond et al. 2004, 103). In their seminal study, The Civic Culture, Almond and Verba identify the elements

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of political culture as: (a) civic virtue and responsibility, sharing of values of others, trust and confidence; (b) a participatory and tolerant democracy based on individual freedoms and consensual governance; (c) rational bureaucracy; and (d) stability through modernization (Chilcote 2000, 104). Measuring these parameters will enable the researcher to better understand and categorize different sets of states regarding their political culture. As shown in chapter 4, the debate over the development of Greek political culture has been raging among the intellectuals in Greece, but an important new element has been added: the impact of the European Union. It seems that the majority of the analyses agree that the EU provides much needed stability to Greece, from which the country emerges politically active within Europe, changing somewhat internally, but also changing vis-à-vis the EU itself. The economic paradoxes of Greece are related to this point because of the EU’s ability to influence Greece along the lines described by Radaelli in chapter 1, first through a change in interaction and the increasing discourse over how much and what type of change, along with a discourse on whether this change has been effective or not. Looking at the political culture of Greece in chapter 4, one of the criticisms that is important when it comes to the relations between society and the economy is the dominance of the state and the “revolt” of the masses against it, as Tsoukalas would argue (Tsoukalas 1995). This may be true in certain periods of time and could possibly be explained in sociopolitical terms, but it is the equivalent of attempting to deduce the type of life a family had in the past by looking at a photograph. It does not capture the evolutionary nature of civil society and its political culture. Almond et al. note that there is certain fluidity in the aspects of political culture in every country (Almond et al. 2004). At the system level the relationship between Greece and its EU partners is affected, and this will be further elaborated in chapter 7 when I discuss the changes over time in Greek foreign policy. Also at the system level, the issues of identity discussed in chapter 3 and above are affected. The way Greeks perceive themselves, the other Balkan nations, and their EU partners affects the way they behave at these geographical levels. The legitimacy of the government is also considered at the systemic level, and as we saw from the Eurobarometer measurements, Greeks find comfort in belonging to the EU because they consider that their government doesn’t measure up. This was especially true after the change of governments in 2004, when, after a lengthy absence from positions of authority, the conservatives returned to government with a promise to get rid of the corruption so endemic in the Papandreou era and the late Simitis era and found themselves battling their own demons in the form of financial and personal scandals that reduced the government to a reactive political association rather than an authoritative

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leadership. The public became increasingly mistrustful of politicians, political parties, and the press, as Kathimerini reported.10 At the process level, where much of today’s critique of the modern Greek political system is found,11 much is concentrated near the Manichaeism and anarchic individualism of the Greek citizenry, which behaves completely as the mirror image of the northern European Union partners.12 In this sense, one would expect that Greeks have no interest in politicians who are busy enriching themselves by cheating their fellow citizens, their state, and eventually the EU, and, consequently, Greeks would have no use for politicians and of political rights discourse. This is not, however, the case, because Greeks are political animals with a fierce attitude toward their civil rights and liberties, and as I described in detail in chapter 4, they participate fervently in economic and noneconomic interest groups. The Greeks can hardly be called parochial in this sense, nor are they people who have no interest in national or European politics. As shown in tables 5.2 and 5.3, Greeks are well informed when it comes to European issues, though when asked, they believe they are not well informed, which speaks of their inability to believe that things are improving. According to the Eurobarometer, not only is knowledge of how the EU works is improving across Europe, but it seems that the Greeks know better than most citizens of other countries how it works.13 So much for the supposed parochialism of the Greek citizen and his or her self-interested ways. Finally, in terms of policy level, the Greek citizens’ demands are not outrageous (I have described them in chapter 4, table 4.1). Some of the demands of the public regarding social provisions and welfare may be generalized demands of the entire EU, while some regarding the fight against crime and illegal immigration may be more specific to countries facing these specific problems. Moreover, as the recent trials and tribulations of Paris regarding the treatment of immigrant youth and social benefits illustrate, Greek society is within the norm of its European partners. Nonetheless, several important chronic problems exist that have so far proven impossible to solve and Table 5.2 Do you think you are well informed or not about European political affairs? Country Ireland Italy Spain Greece Portugal EU Average

% who believe they are well informed 39 29 23 21 21 30

Source: Eurobarometer 66, November 2007, 126.

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Europe’s Greece: A Giant in the Making Table 5.3 For each of the following statements about the EU, could you please tell me whether you think it is true or false? Country Ireland Italy Spain Greece Portugal EU Average

Average of correct answers (%) 59 43 49 74 54 50

Source: Eurobarometer 66, November 2007, 130.

thus contribute to our perception of the paradoxical slow reform and high growth. It seems that it is fair to say that Greece has never really been able to build an industrial base, and much of the past decade’s growth, which has surpassed that of most of Europe, comes from the EU itself and at the end of the “new Balkan wars.” In addition to such observations, one may argue that Greek political culture runs counter to the northern European tradition of investing in heavy industry precisely because of the preexisting conditions of the fluidity of borders and governmental structures that characterized the region ever since the collapse of the Ottoman Empire. It is also said, though, that Greek political culture was particularly important because of its mercantile aspects instead of industrial aspects. Because of the inherited instability in the region, the Greeks developed a mercantile culture instead of an industrial culture, which presently allows them to penetrate markets all over the Balkan Peninsula and Eastern Europe. As I will illustrate in chapter 6, Greek investment in the Balkans, even though it is at high levels in some cases, seems to be of a short term commercially—as opposed to long term industrially— oriented. Greeks have been accustomed and have adapted to the fluidity of their region, but this has not prevented them from economically expanding it. This very fact, however, illustrates that with the near global dominance of the EU economy and the stability that EU membership provides, mercantile political culture is not serving Greece well, because it could be argued that Greece is missing out on other greater economic opportunities. Foreign Policy and the Economy The third and final paradox that this book examines is the paradox of foreign policy. A few years ago, Stelios Stavridis, a UK-based academic, published a study regarding the views of Greek academics on Europeanization of Greek foreign policy. He found that by far most of them believe that Greek foreign policy has been “Europeanized.”14 Stavridis’ critique is mainly

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based on the fact that most of the academics he interviewed were taking a linear approach to Europeanization where Greece has changed policies, some of them substantially, during its membership in the EU, and thus it is viewed as being Europeanized (Stavridis 2003, 34). As such, Greek foreign policy is irreversibly European, though when one looks at the elements of the foreign paradox, we see that, in the same manner noted by Stavridis, for every step forward there may be one backward, so to speak. Thus, I am in agreement especially with his second conclusion that the emphasis is given to the domestic actors of Europeanization instead of a dynamic system of complex relationships (Stavridis 2003, 34). Nonetheless, the transformation of Greek foreign policy, albeit slowly and sometimes begrudgingly, marks a turning point in Greece’s relations with its EU partners. Here, then, is yet another discontinuity, the fact that most experts analyzing the domestic institution and their adaptation to European norms, principles, and rules find Greece severely lacking while the foreign policy experts seem to believe that Europeanization of Greek foreign policy has been achieved. Thus, the paradox of Greek foreign policy. Greece has moved out from its proverbial “pariah” status within the EU to its natural middle size and has acquired the status of a middle weight member state, and Greece is now seeking, at least according to most Europhile politicians in the country, to extend its role by utilizing its unique character and position within the EU.15 Here is where the paradoxical nature of Greek identity and politics may interfere with the politicians’ plans: the dynamic nature of Europeanization, which has been described in chapter 1 as a process of adaptation, resistance, and retrenchment. Much of the response that Europeanization receives from the member state depends on the domestic priorities of the state; thus if there is room for adaptation, the process will follow the one proscribed by Radaelli: interaction, robustness, equilibration, and discourse (Radaelli 2003). But there could be, as has been documented by others, resistance based on the level of misfit between policies at the EU level versus policies at state level or retrenchment based on the same reasons (Borzel 2002b). The Greek foreign policy paradox is informed partially by the ideas of identity, which I have extensively discussed in chapter 3 and the beginning of this chapter, but also in the policy changes that Greece has witnessed in the past twenty years. There is a duality in the identity of Greece, which has two very real historically driven sources: the ancient/rationalist/western and the Byzantine/religious/eastern. In today’s Greek foreign policy, we find this duality expressed by the membership of Greece in the EU and its main foreign policy preoccupations with Turkey and the Balkans. Identity is key, as noted earlier, to the debate over the issue of Macedonia and Balkan tribalism and nationalisms, and their virulent expression during times of instability

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will attest to that. Greece seems to have its future secured by belonging to the EU, and naturally one may assess this as a form of disengagement from the futures of its neighbors, a certain comforting distance between modern Greece and its past. But when looking at the main problems Greece faces today, they are all expected remnants of its not so distant past and they all threaten to re-involve the country in regional conflict, raging and competing nationalisms, and a general return to the past. Moreover, I find many times while discussing Greek foreign policy vis-à-vis the United states in US academic settings that the majority of my audience is completely unaware of Greek foreign policy, and some still bring up the concept of anti-Americanism in the same sentence as the name of the late prime minister of Greece, Andreas Papandreou. The reader may have noticed that I cite this fact, in the brief introduction, as one of the reasons I am writing this book. Nevertheless, the fact remains that political attitudes and policies have changed toward Europe, Turkey, the Balkans, Eastern Europe, most importantly Russia, and last but not least, the United States. The foreign policy paradox of Greece is the paradox of having important pressing foreign policy issues within the EU, such as economic policy, regional cohesion, and immigration policy, to name a few, and having to deal with external foreign policy issues. As far as Greece is concerned, in terms of the exercise of political will at the EU level, interaction in Brussels falls to the Ministry of Foreign Affairs, led by diplomats (Spanou 2003). The Europeanization of Greek foreign policy has produced a core of diplomats, as well as other midlevel bureaucrats, of a higher quality. This has caused an adjustment of “style” in terms of rhetoric and action, the gradual improvement in relations with all European states, and finally some change in the institutional structure and the procedures of the state. While the Greeks have been able to manage their overall relations in the EU successfully, the same cannot be argued in regard to bilateral relations with non-EU members. In the absence of the EU as a negotiating party, these bilateral relations are a real problem for Greece while attempting to solve “regional” issues (Stavridis 2003). EU membership may have its privileges, but the EU and its partners make no guarantees, especially when it comes to the territorial integrity and diplomacy of a single member; they have so far refused to accept the demands of Greece for a guarantee clause (Stavridis 2003, 18). Therefore, the analyses of Greek foreign policy must include the process of Europeanization as well as the outcome of the making of foreign policy. Internal and external factors should be considered in process and outcome. This allows us to view the making of Greek foreign policy as a two-level game in regard to its non-EU neighbors as well as a longer strategic game vis-à-vis its membership in the EU and its foreign and security policy components.

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The components of such analyses, therefore, include, first, the adaptation of EU norms and procedures by the Greek foreign policy establishment, such as the changeover from the reactionary and uneasy relationship with the EU in foreign policy matters. Second, the Greek entanglement in the Balkans both in terms of the identification with certain states such as Serbia as well as the complication of relations with states such as Albania. Greece’s Balkan entanglement is quite possibly becoming one of the most important aspects of Greek foreign policy precisely because it falls outside of the traditional binary relationships of power among neighbors, as is the case with Turkey. In the Balkans, Greek interests are highly complex and not at all constrained by security issues alone. Relations with FYROM include emotion, identity, and economic interests. Relations with Albania include domestic politics such as immigration, identity politics and religion, economic matters, as well as traditional political issues such as boundaries and the military. Relations with the rest of the Former Yugoslav republics include identity and nationalism, security, and economics. Thus, not only has the processes of Greece’s membership in the EU changed in terms of foreign policy because of the changing landscape of the Balkans and Greece inevitable engagement, but also the outcomes. Greek foreign policy regarding most of the western Balkan nations has changed within the past decade. Third, the relationship most widely analyzed and probably reigning as most important in Greek foreign policy is the one with Turkey. Greek-Turkish relations have gone through several phases of intense animosity, deteriorating to cold-war-like conditions, then to the thawing of relations, and then finally to another era of cautious interaction. The Greek-Turkish relationship is better analyzed in terms of outcomes. When I talk of Europeanization, we may refer to changes in style from nationalist and zero-sum to empathetic and positive-sum, but mainly the case lends itself for output analysis. What have been the results of the recent changing Greek-Turkish foreign policy interaction both for Greece and for the EU? Of course, this discussion is not complete unless it includes the issue of Cyprus, which is the primary source of tension between the two countries. Interestingly enough, the recent developments in Greek foreign policy include the accession of Cyprus within the EU as another member state, which complicates, if not triangulates, the Greek-Turkish relationship. Fourth, I would be remiss not to discuss the global position of Greece as a middle-range power in the EU. As in most EU countries, there is a raging debate regarding global issues, such as US hegemony, the war on terror, old rivalries, and the position of the EU itself in the global communities. Many countries have a developed Atlanticist side, which is US friendly, or is pro-United States, a view that may not be shared by the majority of their population. Both England and France fall in this category under successive

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governments. Many EU members also have a strong Europeanist side, which views the EU primarily as an independent foreign policy actor, mainly through federalist positions, and wish that the EU develops a more coherent and less Manichean attitude toward global problems. The Europeanist side not only opposes the US world view, “you are with us or against us,” but it also views the EU as largely a counterweight to the United States and a force of positive global developments. Even though Greece cannot be counted as having its own special weight in these developments, it faces the same divisions but has been able so far to navigate them successfully. This analysis is mainly one of foreign policy outcomes in regard to the making of foreign policy, which will allow the reader to better assess the complete picture of where Greece has reached compared to the United States and to Europe and understand how far the country has progressed. Conclusion In this chapter, I have discussed the paradoxes of modern Greece as they have become more noticeable precisely because of internal and regional political developments in the past twenty-five years. First, there is the paradox of politics and society. Greece is a society that has modernized significantly in the past twenty-five years and there is plenty of evidence that it is moving away from past nationalist sentiments and perceptions of special Greek uniqueness. There are, however, obstinate and obsolete parts of politics and society that either resist this trend vehemently or present successive Greek governments with quite interesting, maybe impossible, puzzles. In terms of society, old nationalism’s fears and irredentism have not disappeared in Greece, just as they also failed to disappear in Greece’s neighbors. I have already explained how the changing geopolitical situation in the Balkans and the EU membership have interacted, creating a mini-identity crisis in Greece. This identity crisis pits the Western Europeanizing elements of Greek society against the Eastern more introspective elements of Greek society. It has affected the way the society functions as well as the debates over politics and policy in some regionally interesting times. Second, as we will see in the next chapter, the major economic reforms, having been agreed by the majority of the political spectrum, still remain an issue, but the economy is moving forward and it is doing much better. The “reinvention of the state,” as the conservative government called the need to restructure the state, remains elusive. Public policy remains a questionable area of the governmental process plagued by successive mismanagement scandals and the culture of corruption that Greece seems unable to shake off. Nevertheless, within successive governments there is the agreement that liberalization is needed to increase competitiveness and the expansion of the

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economy. More optimistic attitudes are starting to appear because of growth in the economy and the expanding and positive involvement of Greece with the EU and its neighbors. Third, there is the paradox of foreign policy. Part of the optimism for Greece’s future is based on the changes that have come in the country’s foreign policy. Changes are evident in the style of policymaking, with successive governments abandoning the worn out antagonistic, even polemic, attitudes of the past toward the EU and the United States. More specifically, Greek foreign policy has been normalized in several foreign policy areas within Europe, and by some accounts it has been quite constructive regarding areas of expertise that Greece possesses, such as the East European enlargement. Some of the previously noted antagonisms also reflect personnel changes in both the Foreign Service and political party leadership, but most importantly they reflect the change of Greece’s focus. Greece is not viscerally attached to Greek-Turkish relations, which still dominate a large part of the foreign policy agenda. But she has adopted a regional and even a global outlook toward its position as a state in the global community. The defeated attitudes seem to be uncontrolled nationalism, fear of the unknown, and Greek exceptionalism. Even relations with Turkey, despite serious disagreements over issues such as Cyprus, borders, and minorities, have thawed and talks are taking place. Overall, Greece seems to feel confident and insists upon playing a European role regarding foreign policy in the areas surrounding it.

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Chapter 6

The Paradox of Public Policy and Politics T          Greece and position the post-EU membership developments within the wider context of Europeanization. Consequently, in my effort to analyze Greece’s Europeanization process I will review the interplay of politics, policy, and the economy. The Greek paradox of public policy and politics includes the so-called industrialization paradox that finds an economically developed country in the Balkans engaging in short-term-oriented investment as opposed to long-term industrial commitment. Historically the Greeks have been part of the “merchant culture” among several other nations in the Ottoman Empire, but currently, as part of the European Union, one would expect that the strongest economy in the region would be focusing more on its long-term interests. Again, as a result of the larger political climate, both internally as well as in the region, so far Greece has behaved somewhat paradoxically resisting wholesale changes and using the EU as an escape valve. In addition to the industrialization paradox there is a public policy paradox, in which the dominance of the political party dwarfs other actors and, as we discussed in chapter 4, society as a whole holds the society hostage by being obstinate in repealing repeated attempts to reform Greek public policy. Thus, liberalizing the economy has been a struggle, but restructuring the state apparatus has been an absolute nightmare. Issues such as pension reform, unemployment, education, and health care, to mention a few, seem to figure on the national press daily without any end. Many public intellectuals have wondered why reform attempts fail in Greece.1 I now consider the interaction between EU institutions and the Greek government, showing the extent to which that downloading was performed.

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The Europeanization of National Policymaking As opposed to the area of foreign policy, which I deal with in the next chapter, the area of public policy is more conducive to coordination instead of bargaining (Bruno, Jaquot, and Mandin 2006). It may have been evident to some thinkers that some areas would be more contentious than others when E. Haas divided the sphere of politics in the EU into “high politics,” which include foreign security and defense policies, and “low politics,” which include economic and social policies, but throughout the years there has been more and more cooperation at both levels. I, among many others, define Europeanization as the process of political coordination and cooperation but also the incorporation of norm attitudes and beliefs that have been strange for a new EU member state (Radaelli 2003). As I discussed in chapter 1, different states experience Europeanization differently (see table 1.1), and I say the state experienced it because the state preceded the EU and thus has developed mechanisms to deal with external and internal stimuli. Accordingly, I have argued that the EU member states face difficult challenges depending on the stimuli they face, especially the ones external to the EU (e.g., superpower competition and regional competition) that tend to increase the tendency to defect and decrease the tendency to integrate. The best example of policy going wrong in the EU would be the behavior of the state vis-à-vis the Iraq war. When the United States decided to invade Iraq in 2003 the EU found itself with the unbridgeable gap between two camps; one in opposition and another in support of that action. On the other hand, it is much easier to understand why states find it easier to coordinate and advocate economic policies that benefit the entire EU, such as the Lisbon strategy, which was decided in the year 2000 in Lisbon, Portugal, in order to strengthen the EU economy. In the Kok report, action was urged in five areas in order for that target to be met: (a) the knowledge society, (b) the internal market, (c) the business climate, (d) the labor market, and (e) environmental sustainability (Kok 2004). Yet, even though cooperation is easier, it does not mean complete agreement and/or convergence in all the areas mentioned above. In fact, when it comes to Greece, several commentators view the country as an outlier to this process (Falkner et al. 2005). But what drives state behavior? I mentioned earlier in this book (see chapter 1) that much of the discomfort that comes with Europeanization has been associated with the “goodness of fit” (Borzel and Riise 2000, Cowles et al. 2001). Simply put, the closer an institution is to the European norm the less pressure it has to face to conform with European standards and the less the conflict between the national and supranational levels. Moreover, it has been argued that states that have statist institutional structures have a harder time with

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Europeanization as a whole (Schmidt 2006). Schmidt looked at two different types of state structures, (a) statist, which includes France and the UK, and (b) corporatist, which includes Italy and Germany, and has found that overall the British and French cases point to harder adaptation to Europe than the other two cases in many policy areas (Schmidt 2006). She argues, “For member states closer to the statist end of the continuum (such as France, Britain and Greece), state actors have traditionally provided interests with little access or influence in policy formulation but generally accommodated them in implementation—either by making exceptions to the rules as often as not (in France) or limiting the number of rules to allow self-governing arrangements (in Britain)” (Schmidt 2006, 672). In the case of Greece, in policy sectors where it seems that the institutional fit was completely absent and where Greece conformed, both the above techniques were used. When I discuss regional policy, it will be made clear that the Greek state did its best to regulate and co-opt regional policymaking while it was conforming to EU directives. In Schmidt’s scheme, Greece would belong to the statist model and would perform accordingly, with low societal input in policy formulation and implementation. In fact, it is true that in some cases, such as the regional policy area, Greece used tremendous imagination in creating regions while excluding the public by relying heavily on the local and prefectural representative organs in which the governing party had strong allies if not control. This type of description falls generally in line with the critique of the Greek political and public policy system, under which conditions it would seem naturally set up to fail. In fact, many argue that the statist system of Greece is the number one reason for Greece’s failure to Europeanize and, looking at it closely, they have identified several corollaries such as political culture, the political parties, corruption, and the like (Mouzelis 2005, Kazakos 2005, Pelagidis 2005). The problem with the Greek commentators, however, is that they do not differentiate between policy sectors and treat the state as a monolith mostly responsible for the ills of the country. In fact, in their effort to explain why several modernization projects, especially after the change of leadership in the ruling socialist party, have not produced the intended results, they have completely forgotten about the disaggregation of particular public policy sectors where there is significant evidence that there are diverse behaviors depending on the sector (Papoulias 2007, Papoulias and Tsoukas 1998, and Pelagidis 2005). There are several ways one can look “inside” the black box that is the state to discern whether or not Europeanization has taken place and if so at what levels. Looking at the rates of transposition of EU law provides a macro glimpse of the adaptation process at the institutional level. Transposition of EU law is the process by which law in the member states adapts to EU

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law by incorporating the new European law and changing conflicting areas of national law to comply with the new European law. Looking at sectoral adaptation provides a better understanding regarding not only where more work may be needed for a country to conform to EU standards but also to pinpoint the particular reasons one sector is performing better than others. Finally, the overall performance and trajectory of the economy gives a snapshot of where the country is vis-à-vis its EU partners. Going back to Radaelli’s elements of Europeanization from chapter 1, transposition rates and their explanations provide a glimpse of interaction and robustness while the debates that ensue in the political realms as well as the public over changes in different areas of politics and economics in Greece provide a measure for equilibration and discourse (Radaelli 2003). There is much more at stake with this type of research than this chapter can account for, such as the overall accuracy of European integration theories, and so on, but my main focus is on Greece’s performance. As highlighted by Falkner et al., Greece belongs to “the world of transposition neglect” and as such we expect high levels of national arrogance, administrative inertia, and inefficiency (Falkner et al. 2007). In the next section I will look at the first two elements briefly before I delve deeper into the last by way of looking at the economy and the changes that have taken place in the past twenty-five years in Greece. The Greek-EU Interaction in Policymaking The mostly cultural explanation of Greece’s underperformance within the EU in the area of compliance advanced by Falkner and her colleagues seems to be in line with the arguments periodically advanced by Greek researchers. There are, however, some interesting findings that do contradict the aforementioned pessimism. First, it is hard to discern why countries perform better or worse in these areas, and as much as Falkner et al. wish to describe the groups of countries such as France, Greece, Luxemburg, and Portugal as the laggards, they have to admit that their description of the worlds of noncompliance or the world of transposition neglect is a rather theoretical construct and does not indicate outcomes (Falkner 2007, 404). A recent study conducted by Thomson, Torenvlied, and Arregui, in which the delay of transposition of EU law is treated as an effect of the member state’s initial position and discretionary powers, found that the more a member state disagrees with the EU law and the less the discretion it has in implementing the directives, the higher the delay this directive will experience in being transposed by state bodies (Thompson et al. 2007). The behavior applies to every member state and has no country-specific characteristics, thus Greece does not differ from its fellow members in this respect. Second, the general

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availability of data measuring noncompliance has been questioned (Borzel 2001). Therefore, as mentioned earlier, data has to be taken as a snapshot and not as an indicator of long-term outcomes. In certain studies Greece appears by its own admission to be a laggard, by having a twenty-two-week delay on average in transposing EU law into Greek law (Thomson et al. 2007, 703), while in other studies Greece performs on par with its counterparts (Berglund et al. 2006, 709). Third, the data have frequently been misinterpreted (Borzel 2001). As a matter of fact, Toshkov finds that there is very weak evidence supporting the analytical power of the noncompliance schema and it is certain that cultural explanatory variables such as attitudes toward law abidingness, rule following, and social trust, so important in proving the backwardness of Greek society as a whole, do not figure at all as explanations of noncompliance (Toshkov 2007, 951). Nonetheless, on the whole, Greece seems to be no worse than Germany or any better than anyone else. The most important finding, though, is that Greek performance regarding compliance with EU law changes its behavioral pattern midway through its membership. Looking at Greek performance with transposing of EU law, Berglund, Gange, and Van Waarden have found that although Greece is not the worst offender when compared to Germany, it is above average and looking sluggish in this area. However, when Berglund and her colleagues look at administrative learning and administrative routinization, there is a clear break with past performance regarding Greece, which starts with the period after 1994 (Berglund et al. 2006, 709). Thus, they argue “The Netherlands, the UK and Greece have moved from substantial delays at the beginning of their membership to average transposition well in advance of the deadlines” (Berglund et al. 2007, 709). What explains this change of heart in Greece? Greece has on the whole improved economically and there is now an elite agreement on how to treat European directives (if not European membership as a whole), and thus transposition rates have gone significantly down. Yet, there is the issue of the changing behavior along Greece’s membership. It seems that things have gotten much better in Greece since 1981 in the area of transposing EU law, not to mention the economy and public policymaking. In as much as this contradicts Thompson’s findings, there is still strong evidence to suggest that elite agreement on the treatment of the membership to the EU is the key factor on the improvement. Using Thomson’s example of the issue of health warnings on tobacco products, a tobacco producing and exporting country such as Greece would be expected to be 100 percent against strong warnings, but the research finds that Greece fairs better than Germany, Austria, and Luxemburg by showing a 15–20 percent support for tobacco products with current health warnings (Thomson et al. 2007, 696). I suggest that the changing political dynamics in the late 1990s have

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changed the Greek preferences regarding EU policies, from seeing them as an extended colonial legacy by the Western powers to a more moderate economistic view of the relationship. Evidence of this is not only provided by secondary research that is conducted by several Greek economists and social scientists but also by the firsthand accounts of the people in power from 1996 to 2004, several of whom have written extensively about it, as will be discussed later in this chapter. The “Lost” Decade The change of heart that the Greek leadership experienced regarding Europe came slowly, especially given the political changes the country underwent in 1981. With the Panhellenic Socialist Party (PASOK) in power, a certain time for adjustment was going to be needed. It seems, however, that because of the impact of ideology, more precisely PASOK’s brand of socialism, Greece was heading in the opposite direction than the rest of Europe. The 1980s were a watershed decade for the traditional Keynesian economic thought where the government was an important, if not the most important, player in the economy. Moreover, because of the economic crises that two successive Organization of Petroleum Exporting Countries (OPEC) embargoes brought upon Europe, the Europeans and indeed the world was rethinking economic policies. In Europe, extensive state commitments, especially in social policy, were rethought and the size of the state was blamed for the poor economic performances of member states, which consequently led to what Kazakos calls “destatization” (Kazakos 1992, 259). PASOK, on the other hand, was heading in precisely the opposite direction. Bosworth and Kollintzas highlight this in their historical analysis of the 1975–1995 period by arguing that “. . . the growth of real GDP slowed down to only 1.5 percent annually . . . much of the popular discussion has attributed the poor performance to deteriorating economic policy conditions in the period after 1973—particularly during the 1980s.”2 Much of this can be understood in light of past policies of exclusion and the impact of past semi-authoritarian and dictatorial policies. PASOK promised “Allage” or change, and it did deliver. It did, however, have more than one problem. First, it had a problem in facing the European Union, which, as noted in chapter 2, it had accused before its 1981 electoral victory of being the same type of Western neocolonial organization like the North Atlantic Treaty Organization (NATO). Second, it was PASOK’s promise that Greece will exit the European Economic Community (the predecessor to the EU) because of the structure of exploitation that it imposed upon smaller countries. Third, PASOK’s goal was to restructure political institutions and the economy so that the previously excluded mass could now participate in the economy and benefit

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from it. This normally is seen as part of the populist rhetoric that PASOK leadership used to consolidate its electoral base.3 Nonetheless, it made for a poor start in the Greek relations with its EU partners, which was only compounded by a now famous memorandum to the European Communities sent by the Greek Government in 1982. Titled “Position of the Greek government on Greece’s Relations with the European Communities,” the Greek government essentially put on paper its ideological pronouncements of economic exploitation by the rich northern European partners of the smaller ones such as Greece and demanded that necessary adjustments be made to safeguard the Greek economy but most importantly create a special relationship with Greece.4 This is the first instance of what Kazakos calls the Greek “demandeur attitude,” which reinforced the turbulence in Greek-EU relations (Kazakos 1992, 266). By the end of the 1980s, PASOK consolidated its power domestically, kept the communist pressure at bay by using the salami tactic (i.e., weakening its power base and stealing some of its most well-known deputies), and became far more cooperative with Europe. Kazakos lists some of the reasons PASOK changed its policies: “(a) the realities of economic interdependence . . . ; (b) learning from participation in the multilevel “permanent” negotiation process in the Community framework; (c) the policy constraints arising from the very fact of membership; and (d) the gradual weakening of pressure from the communist party . . .” (Kazakos 1992, 277). However, the legacy of early PASOK’s relationship with Europe still haunts the Greek participation in EU institutions. The image of Greece as a laggard is very well documented, but it hardly reflects the present-day situation. PASOK’s rise to power consolidated democracy and modernized the state structures (probably better understood as part of the next generation of Greek politicians who were trained at this time and who would contribute to the Simitis government), but it also had negative effects that still present significant problems to both the successive PASOK and New Democracy governments alike. The most important problem is the expansion of the state and the inclusion of interest groups that then became entrenched interests in Greek politics with the ability to thwart restructuring efforts. James Petras called this particular phenomenon the continuation and enhancement of the patrimonial state, and in the first decade of Greece’s membership he was probably very accurate (Petras, Raptis, and Sarafopoulos 1993). Moreover, there is no question that PASOK’s subjugation of governmental mechanisms to the political party during the 1980s had a negative impact on society.5 PASOK’s insistence on electoral dominance by any means in the 1980s inadvertently strengthened informal institutional structures such as the underground economy (i.e., black market) and corruption that even successive governments had to deal with and are still reeling from.6 The entire

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short-lived conservative experiment of 1991–1993 was spent battling ephemeral issues such as corruption in the PASOK government and the naming of Former Yugoslav Republic of Macedonia, while achieving comparatively little. There was, however, a significant change regarding the Greek attitudes in the EU both in terms of domestic and foreign policy after the change of leadership in PASOK, with the death of Andreas Papandreou. Adjusting to Europe By the end of 1990s, Greece had fully adjusted to Europe and PASOK had new political blood that transcended the original ideological constraints and was looking to Europe as a reference point as well as a constraint on the actions of the party in government. Looking at several politicians’ ideas regarding Europe, we see that Greece’s Europeanization was the number one policy goal. N. Crhistodoulakis, the former finance minister, identifies as the most important element of PASOK’s policy the inclusion of Greece in the Eurozone in 1999.7 Giannos Papantoniou, a former minister of National Economy and defense minister, argued in several articles published in the Greek press that because of the European Monetary Union and the need of Greece to be included, the modernization of the state is a necessity.8 Evaggelos Venizelos argued later on that because of Greece’s inclusion in the Eurozone the economy will gain significant advantages, and thus this situation will constitute a new beginning for the Greek economy (one assumes that he also meant that the past economic situations do not matter as much).9 Finally, the most important politician at the time in Greece, former prime minister K. Simitis, argued that finally the myth of Greece as a weak peripheral state, always last in everything, was discarded by the public and a new, more vibrant attitude was accepted.10 The reader may note the historical sequence of these statements that aim to highlight not only the change in political discourse in the country but also the change in personnel as well as capabilities from the 1980s. Looking at the larger effort to reform the Greek government through privatization, George Pagoulatos has an interesting take in the trajectory that Greece followed after its accession to the EU in 1981. He argues that there were six syndromes that explain Greece’s behavior: (a) the honeymoon syndrome; (b) the things cannot get any worse syndrome; (c) the unsustainability syndrome; (d) the promised land syndrome; (e) the Nixon goes to China syndrome; and (f) the Ulysses and the sirens syndrome (Pagoulatos 2000). The first syndrome regards government actions in the early days of a newly elected government that (with the exception of the 1985 short-lived adjustment undertaken by PASOK) most Greek governments have avoided. The second is associated with the government’s position that things are bad and that there is a need for change.

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Obviously, the worse the things are, the faster and more severe the measures that need to be taken. In Greece this was tried under the brief and largely ineffective 1991–1993 conservative government. The third is related to the reversal of previously undertaken reforms. In this syndrome Greece reversed the privatization of several public owned corporations because they were not considered feasible or sustainable. This argument, of course, related to politics and not to economics, considering that the reversal of this privatization happened when PASOK reversed the privatizations undertaken by the New Democracy Party in the early 1990s for mostly electoral purposes. In fact, several of these companies, such as Olympic Airways, are still not privatized and still hemorrhaging the public coffers. A news analyst argued that the political party’s dominance over public corporations is to blame.11 No matter who is to blame, the argument that sustaining the company is not feasible is made more often these days.12 The fourth syndrome is related to the articulation of an ideal, efficient governmental structure that was adopted early on by New Democracy’s neoliberal argument that “the smaller the government, the better,” which was also adopted by subsequent PASOK governments under the rubric of modernization. The road to Greek modernization passed through privatization and eventual inclusion into the Eurozone. The fifth syndrome that Greek adjustment to Europe took was the Nixon goes to China syndrome. Pagoulatos argues, “thanks to his impeccable anticommunist credentials, Richard Nixon was the best fit president to reverse American foreign policy and embrace communist China” (Pagoulatos 2000, 236). Thus, having the best social inclusion and economic equality credentials, PASOK had the chance to force a moderate privatization program in Greece in line with other European nations. This is also evident from data obtained by the World Values Survey. As depicted in table 6.1, we see that the Greek public seems more interested that the state makes sure most people have their basic needs met. Table 6.1

Importance of guaranteeing basic needs for all TOTAL

Portugal

Spain

%

n

%

n

%

n

%

n

3946

73.9

952

83.4

1385

69.2

790

79.0

819

68.2

884 302 84 27

16.5 5.7 1.6 0.5

136 35 8 2

11.9 3.1 0.7 0.2

380 138 44 21

19.0 6.9 2.2 1.0

119 55 16 2

11.9 5.5 1.6 0.2

249 74 16 2

20.8 6.2 1.3 0.2

75 24 5342

1.4 0.5 (100)

4 5 1142

0.4 0.4 (100)

19 13 2000

1.0 16 0.6 2 (100) 1000

1.6 0.2 (100)

36 4 1200

3.0 0.3 (100)

n Very important 2 3 4 Not at all important Don’t know No answer Total

Greece

Italy

%

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Europe’s Greece: A Giant in the Making

The people of Greece, more than those of the other southern European countries, seem to rely heavily upon the state for the provision of their basic needs. Or to put it another way, they seem more concerned for those less fortunate and expect that the government take actions to correct societal inequalities. Considering that privatization, as Pagoulatos argues, would create a definite group of “losers” in Greece, the most conservative and more aggressive reformist party was not as suited to provide these reforms (Pagoulatos 2000, 236). Thus, PASOK comes to power again and stays for another decade until its electoral defeat in 2004. The last syndrome relates to the Greek government tying itself to the goal of entering the Eurozone like a modern Ulysses. In essence, Pagoulatos argues that PASOK was uniquely positioned to bring about change in the Greek economy, but he cautions that there are many pitfalls into which the government of Greece may be prone to fall (Pagoulatos 2000, 239). Public Discourse, the Economy, and the Future of Europeanization It seems that the Greek economy has followed a cyclical pattern of performance starting after World War II, with Greece being the poorest country among what would soon be the EU. Soon after that, Greece witnessed a high growth low inflation economy until 1980. From 1980 until 1995 Greece again became the poorest country in the EU while from 1996 until 2001 it appears to have grown at a rate faster than the EU average, and currently its growth continues at a still faster rate. As reported on Greek national television news in December of 2007, Italian newspapers made mention of a “Greek miracle.” Greek boasting aside, the numbers seem (see table 6.2) to Table 6.2

GDP growth from 1975 to 2007

GDP Growth, %

1975 4.6

1976 7.0

1977 2.4

1978 7.5

1979 2.9

1980 2.6

Average 4.5

GDP Growth, %

1981 0.1

1982 –2.7

1983 –.20

1984 1.3

1985 3.9

1986 –0.5

GDP Growth, %

1988 5.9

1989 3.1

1990 –0.9

1991 2.6

1992 0.8

GDP Growth, %

1993 –1.7

1994 2.8

1995 2.2

1996 1.9

1997 3.0

1998 3.4

Average 1.93

GDP Growth, %

1999 3.4

2000 4.5

2001 4.5

2002 3.9

2003 5.0

2004 4.6

Average 4.3

GDP Growth, %

2005 3.8

2006 4.2

2007 4.0

2008a 3.8

2009 3.7

1987 –3.1

Average –0.4 Average 2.3

Average 3.9

a The 2008 and 2009 averages are Eurostat projections. Source: Numbers compiled from I. Kosnolas, The Competitive advantage of Greece: An Application of Porter’s Diamond, Aldershot: Ashgate, 2002, 38–39; R. C. Bryant, N. Garganas, and G. Tavlas, Greece’s Economic Performance and Prospects, Athens: Bank of Greece, 2001, and Eurostat.

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sustain this image of a better than average economic performance for Greece compared to the rest of Europe. Although there are still several issues that would greatly affect future economic performance, there is a larger point that needs to be made regarding Greece’s recent good fortunes. First, popular and social discourse hardly acknowledges the changes in the economy. It seems that Greeks are very worried about the economy and their economic future. Considering the global economic slowdown because of spiralling oil prices, maybe they have a good reason to be worried. However, the Eurobarometer polls do not reflect the most recent changes in the world economy but rather the pessimistic attitude that is prevailing in Greece regardless of the poor economic times. The majority of Greek citizens, comprising approximately 52 percent of the respondents, expect the country’s economic fortunes to deteriorate, in a recent Eurobarometer measure (table 6.3).13 In addition, when asked what are the largest problems in their country, Greek respondents overwhelmingly noted unemployment, the economic situation, and inflation as the top three, despite the fact that Greece’s inflation rate (hovering at 3 percent) is considerably lower than it was in the 1980s, when it had reached 29 percent at one point.14 Unemployment is a real concern in Greece because it is higher than the EU average, but currently it is at the lowest levels in a decade. There is a steady decline in the unemployment levels of Greece, as evidenced in graph 6.1, and considering the rate of abandonment of the agricultural sector in recent years by younger Greeks, it seems that the signs are positive, though much is still left to be done.15 The general economic condition of Greece has improved tremendously, not only since it became a member of the EU but overall in the past decade. Looking at changes in the Gross National Income and the levels of household spending, one can understand the level of change that has taken place (see graph 6.2 and table 6.4). According to a report from the Bank of Greece, Greece’s 2007 economic growth rate “remains significantly higher than that of the Eurozone,”16 with a growth of 3.7 percent as opposed to a Eurozone growth rate of 2.2 percent and an EU-27 real GDP growth rate of 2.4 percent.17 Furthermore, Table 6.3

Greek public’s economic expectations compared to other EU states

Country

Both economic and employment Employment alone

Ireland Denmark % %

Spain %

EU average %

Italy %

Greece %

Portugal %

31

28

24

20

19

17

13

33

36

23

23

20

13

13

Source: Eurobarometer, no 66.1, 12–16. The respondents were asked whether they foresee improvement in the economy and employment.

Greece

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

EU-15

1996

Unemployment %

14 12 10 8 6 4 2 0

Year Graph 6.1 Unemployment levels in Greece from 1996 to 2007. 12 10

EU-25 IE

8

GR 6

ES FR

4

IT PT

2 0 1996

2001

2007

Graph 6.2 Gross national income as percentage change. Source: Eurostat, Economic Databook 2006–2007, Luxemburg: Office of the European Communities, 2007, 42–43.

Table 6.4

EU

Total household consumption expenditure per capita (PPS)

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

9200

9700

10100

10700

11500

11900

12200

12300

12800

13300 133800

IE

8700

9300 10000

10600

11600

11900

12400

12700

13300

14000

14800

GR

8900

9400

9600

9800

12100

12900

14000

14200

15000

16000

17000

ES

8900

9500

10200

10800

11700

12100

12600

12600

13200

13900

14700

FR

9900 10300 10800

11200

12200

12700

13100

12900

13300

14100

14600

IT

10900 11500 12200

12200

13600

14000

13600

13700

13700

14000

14500

9000

9600

98001

10100

10200

10500

10600

–

PT

7600

8000

8400

Source: Eurostat Web page, http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1090,30070682,1090_ 33076576&_dad=portal&_schema=PORTAL

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the economic report of the Bank of Greece notes that the deficit was again under 3 percent while there was a further a reduction in the public debt.18 According to the Maastricht criteria for the creation of the common currency, in order for a member state to be included it had to fulfill the following four criteria: (a) price stability, (b) budgetary discipline, (c) currency stability, and (d) interest rate convergence (Dinan 1999, 461). The so-called convergence criteria limit inflation to no more than 1.5 percent of that of the three best-performing member states, the budget deficit must be at most 3 percent and the public debt ration must not exceed 60 percent of the GDP while the nominal long-term interest rates cannot be higher than 2 percent of the three best performing rates (Dinan 1999, 461). Greece qualified for the Eurozone even though it did not meet the criteria, as was the case for Italy, and presently there is much discussion about the flexibility in those numbers by major states such as Germany and France. In addition, the global economic outlook that has produced a very strong Euro is having an effect on the economic outlook of the continent and further ignites discussions of the institutional kind. France, for example, has argued for an interest rate hike in order for the Euro to moderate its increasing strength vis-à-vis the US dollar in order for European products to regain some of their competitiveness. The European bank’s response to the French request was negative and the German government was forced to state that it understood the EU Central Bank’s role to be strictly to maintain price stability and as such it disagreed with France’s position as was expressed by its president N. Sarkozy.19 Institutional disagreements aside, the global slowdown of the economy will affect the European continent as a whole and Greece in particular, which is the worry of the Bank of Greece.20 The most worrisome aspect of the economic situation as it started developing in 2007 is inflationary pressures due to the tremendous increase in the price of crude oil, which in April of 2008 was selling at as much as 120$ a barrel. Nonetheless, the Greek economy presently is expanding and its prospects are better than the average EU member state. Second, the political phraseology, as noted above and in chapter 2, has changed in recent years from references to colonialism and economic independence to the modernization of the state. Political discourse after the death of Andreas Papandreou in June of 1996 and the consequent election of Kostas Simitis marks a change in the way politicians talk about the Greek political economy. The question that Simitis posed to his fellow socialists was: do we want to belong in the powerful political center of the world and have a wider range of available political actions?21 The answer for him and his subsequent governments was a resounding yes by becoming part of the EMU. Greece’s political economy then entered the “stabilization state” phase (Pagoulatos 2003, 201). He argues that “financial interventionism,

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Europe’s Greece: A Giant in the Making

though initially founded on a compelling economic rationale, outlived both its developmental and stabilization mission, having ended up serving the political exigencies of democratization, social redistribution, party consolidation in power for either the ND or PASOK, or sheer electioneering and clientelism” (Pagoulatos 2003, 201). Thus, the Greek state embarks on a simultaneous process of liberalization and fiscal responsibility. Simitis argues that at that time business interests were opposed to his government’s fiscal plans because it did not allow flexibility in the monetary exchanges that would weaken the Greek drachma and would allow for more exports (Simitis 2005, 171). However, for him the objective of entering the Eurozone was paramount, and he argues that he was vindicated considering that Greece achieved the Lisbon requirements, as the Kok report showed (Simitis 2005, 178). The Wim Kok report, otherwise titled “Facing the Challenge: The Lisbon Strategy for Growth and employment,” was published in 2004 and focused on five areas of action if Europe is to increase its living standards and face future challenges. These five policy areas are: (a) improving the Knowledge society, (b) completing the internal market, (c) improving the business climate, (d) improving the employment market, and (e) supporting environmentally sustainable policies.22 According to Pagoulatos, the Simitis government embarked on programs that would redraw the public-private boundaries significantly (Pagoulatos 2005). As we see in the economic data provided in this chapter, it was a successful attempt in economic terms, having produced positive economic results and having “overall undercut the traditional instruments of political patronage, . . . it enhanced structures of managerial discipline and corporate efficiency . . .”23 It most importantly broke with the dirigiste past of the Greek economy and forced a change in economic thinking among a large part of the governing elite. Third, the impact of the ability to change from the modernization discourse to a postmodern, so to speak, one will have an impact on the future direction of the economy and the country as well. This can be called the process of social learning, as envisaged by Paraskevopoulos and Leonardi, who argued that adaptation pressures in the EU become a crucial intervening variable in institutional change in member states (Paraskevopoulos and Leonardi 2004). Presumably, factors that affect social learning, such as culture and ideology, could be extremely important and affect the adaptation process of each member state. As such, Paraskevopoulos and Leonardi argue that regional policy matters greatly (Paraskevopoulos and Leonardi 2004). More importantly, however, the process of social learning affects Greece as a whole via the most dominant political vehicles that I have already identified in previous chapters, namely, through the political parties and interest groups. Although both dominant parties agree on the need for Greece to come closer in economic and social achievements with the EU member states,

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they differ in strategies, as already noted in the previous section. What is interesting and more importantly puts a question mark on the assertion that the socialists are the party more capable of bringing a right-wing (liberal) turn for the entire society are the cleavages that exist within the party and have become a near civil war after the election of 2007. With the global economy in a slump, the war on terror in limbo, and the markets extremely jittery, the year 2008 finds the socialists in Greece questioning their own strategies as a whole. The impact of social learning upon the party structure is an important element that will affect whether or not the past socialist and current conservative strategies of “Europeanization” will be continued in the future and how successful they will be at a certain level. The socialist party is facing the dilemma of keeping up with its “Europrofile” or returning to the more populist past, and there are some fairly strong advocates for the second option, mostly, one can only guess, because of short-term electoral gains. The global economic instability that started in mid-2007 has allowed several big socialist politicians to reiterate their opposition to the liberal EU profile of Greece as iterated in their own party agenda. For example, on April 4, 2008 Kostas Laliotis railed against the “Balkan style Thatcherism” practiced by the conservatives and proclaimed that it is only now that most people understand the economics of Marx, Keynes, and Galbraith.24 Laliotis’ concern is with the right turn of his own socialist party, the softening of global socialism into a “surrendered” social democracy, and those who bought into the arguments of Fukuyama’s classic “End of History.”25 Evidently, he rejects even the softer faces of socialism, but more vehemently he rejects as a Trojan horse the “Third Way” championed by the British Labor Party. The particularly interesting thing about this type of argumentation is not only that a socialist is deriding the liberal conservatives but that he does so (a) in a time of global crises when his own party’s future direction is ambivalent, and (b) by adding nationalist tones when arguing that “it is not a matter who is statist and who is a liberal but who serves the public good and the interests of Greek citizens.”26 Along these lines within PASOK there are those who would like to keep the statist features as they have been developed in the past, such as the major contender for the leadership of the party who, in a very interesting fit of mental gymnastics, seems to argue that the liberalization of the energy markets in 2000 is desirable only when the public energy corporation is leading and consequently when the status quo is not changed.27 In the same manner the newly elected president of SYRIZA, the leftist coalition, as its first order of business took to the streets to contest the proposed sale of the national telecommunication company of Greece (OTE) to Deutsche Telecom.28 In fact, on the same issue PASOK has characterized the sale of OTE as a major political and economic scandal, questioning it in the parliament of Greece

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Europe’s Greece: A Giant in the Making

on April 22, 2008.29 The clear evidence of the ideological division within PASOK is the symbolic divergence of the party’s position on the issue of the “opening” of Greek universities to competition. Article 16 of the Greek constitution, which guarantees “free” education both in terms of monetary compensation and also in terms of academic freedom to all Greek citizens,30 became the focus of the biggest mobilization against the conservative government of K. Karamanlis and became the cause for its biggest defeat so far. PASOK had initially supported allowing foreign competition to Greek universities, but as time progressed and the issue was considered by the Greek parliament, it changed positions and opposed it. Two main camps developed during the height of the discussion on the future of education. Those who supported public education but claimed the current system is unsustainable and in need of reform included the leader of PASOK, George Papandreou, as well as heavy hitters such as Maria Damanaki (the former university student who became the voice of student resistance against the Greek Dictators), Dimitris Reppas, Baso Papandreou, and Mixalis Xrisoxoidis. Those who opposed changing the status quo included the challenger for the leadership of PASOK, Evaggelos Venizelos, Apostolos Kaklamanis, Andreas Loverdos, Mimis Androulakis, and former education minister Petros Efthimioy.31 Not only is there a clear political line developing but an ideological one as well regarding the development of future directions for the Greek society. Among the proposals were the enhancement and defense of the Greek language (A. Loverdos), the banning of private entrepreneurship in public education, which is equated with profiteering (Venizelos), and the rejection of satellite campuses from major universities in Greece, which would presumably lead to the inevitable demise of higher education (Eftimioy).32 Not only is the social duality and ambivalence of Greece established in this debate, as highlighted by Diamantouros’ work,33 but the future of the “Europeanization” proposition is also at stake. Considering the argument that Greece now operates between the European and the global levels (Voulgaris, 2006), this cultural defensiveness is hardly defensible other than at a short-term political gains level. In fact several politicians who opposed changing Article 16 of the constitution argued that they would vote for it under a socialist administration and on their own terms.34 At the end of the day the conservative proposals were defeated by a coalition of students, professors, and politicians, which put not only the conservative leadership but also the socialist leadership on the defensive.35 The response of those who belong to the Europeanist, more moderate socialist or social democratic group is to characterize the above as “backwards leftism.”36 The idea that there is such a thing as a new social democracy that is beyond the “third way” that combines liberal philosophies with socialist ideologies may be attractive, but it does present its own problems.

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The basic ideas of liberalism and socialism are antithetical, but even nowadays when the social democrats have accepted the concept of individuality and citizen-centered market economies, whatever that means, there are several European countries in which public policy on behalf of socialist parties has become extremely difficult considering the ideological quandary they are facing. Savvides cites the Spanish socialist model as a successful new way in social democracy without mentioning the unique circumstances that brought them to power37 while ignoring the French socialist debacles that are ideologically much closer to those found in Greece.38 In France the socialists and the liberals have long battled for position as they have in Greece, and in the same manner they have changed each other forcing the liberals to accept the social welfare state as a necessity and forcing the socialists to accept capitalism as a dominant force. In the words of Marc Sadoun, “socialists and liberals come from different ideological traditions, and, when they met in the twentieth-century France, the consequence was an uncertain but original democratic equilibrium.”39 In Europe as in Greece there is a search for the new face of socialism and this is having a direct impact upon the behavior of interest groups as well. Is this new face of European social democracy compatible with large scale, often violent demonstrations in defense of social gains achieved in the past twenty-five years? This is not a question only for the Greeks but also for the larger European leftist spectrum, one that I cannot begin to treat here, but it is important to note that in the coming reckoning within the European left certain socialist gains maybe wiped out. This is evident from the behavior and political argumentation of those within the European left who are treating the new face as a surrender to the liberals. It is also evident in France, given the victory of Nicholas Sarkozy over Segolene Royal, and in Greece, given the victory of the New Democracy over PASOK. It is further evidenced in the battle for reforming the Greek pension system that the left lost. Whatever the new face of Greek socialism will be, it seems safe to argue that it will certainly not be the same as in the 1980s, and the recent spat over pension reform, which saw a rise in labor union and old leftist tactics including some old leftist rhetoric, must be seen in the electoral context rather than as a turn toward the past.40 The Industrialization Paradox Within this changing political context the economy of Greece is also changing from one dominated by state nationalism and state dirigisme to a more open, more competitive, and, as a result, more vulnerable economy. There may be a historical cycle in all of these changes that the Greek economy underwent that parallels the history of the country as well as the entire Balkan region, because the Greeks used to be the traditional merchants of the

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Europe’s Greece: A Giant in the Making

Balkans. In the 1990s film Ulysses Gaze, Greek director Theo Angelopoulos attempts to traverse this historical cycle of the living space of the Greeks in the nineteenth century.41 As the main character, portrayed by Harvey Keitel, moves from place to place throughout the Balkans in search of early movies from the Balkans, the audience is treated to the full extent of the interrelation of diverse peoples living in the peninsula. As such the Greeks now return to old stomping grounds, at least to most of them, which are now part of a larger global region called the European Union. The growing of the Greek economy and its openness and willingness to venture out of its national boundaries is intimately linked to the Greek comfort of doing business in the Balkans. It is said that especially after “1774 the treaty of Kutchik Kaindardji, Greek merchants supplanted the Jews who had dominated the carrying trade with Venice and established a network of trading houses between Odessa, Alexandria and Marseille” (Mazower 2004, 123). The Greek merchant was a permanent figure in the Balkans all the way up to World War I. Salonica was the biggest center of commercial activity with a huge harbor and a splendor unlike other Ottoman cities that lasted until the Greek revolution of 1821 when the Ottoman Turks massacred much of the population, something that contributed to the inevitable decline of the city (Mazower 2004). Nonetheless, the Greeks did business in most southern and East European countries and in some instances, despite their small numbers, they controlled trade (Salavrakos and Petrohilos 2003). Several generations later the Greeks have returned to their Balkan trade routes. According to Jens Bastian, more than 3,500 Greek companies have spread out in the region, including to the states that are not EU members and have only recently come out of civil wars and ethnic violence.42 As far as the Greek economic and industrialization paradox goes, this type of economic activity fits like a glove, considering that one could argue that merchant type activities are short-term-oriented as opposed to long-term industrial commitments. In addition, a small economy such as Greece could be ill-advised to take on such a turbulent region, becoming overexposed and vulnerable to forces beyond its control, such as ethnic fighting. Moreover, the nature of the Greek economy as a whole emphasizes the merchant culture (Kontogeorgis 2007, 32). Yet, continuously in the past fifteen years the Greek economy has changed characteristics and has opened up and increased their trade with the Balkan countries and invested heavily in the region. Considering the political and economic changes that I have highlighted in the previous sections, one has to consider the type of involvement that Greece has in the Balkans in order to get the complete picture of the political-economic paradox that characterizes Greece in the past two dozen years. As shown in the previous section the basic indicators of the Greek economy have been changing. Previous five-year plans for economic development

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119

have been heavily affected by EU structural and cohesion funds and Greece’s successful attempt to become part of the Eurozone (Kontogeorgis 2007, 176). No matter what the influences, though, the Greek economy has been growing with incomes and other economic indicators consistently better than the EU average. This makes Greece the strongest economy in the Balkans and has provided Greek business with the capital and opportunity to do business in the region. Nonetheless, several problems as identified by Kontogeorgis are still present: (a) the concentration of the population in Athens, the capital of Greece; (b) an overpopulated public sector; (c) the absence of planning; (d) the lack of education; (e) the demographic anemia; and (f) the regional development issues that have not yet been dealt with adequately (Kontogeorgis 2007, 179–180). I have noted, however, that not only the public and political discourse has changed but also several of these areas are starting to show promising signs of change. Regional development, for example, may be a difficult issue to deal with in a single generation, and the comparison is easy to make when one considers that the strongest economy in the EU, Germany, receives regional development funds for regions in former East Germany that face significant adjustment issues even twenty years after the collapse of the Berlin wall. Greece has some of the poorest regions in the EU, with the exception of the EU overseas territories, thus significant EU and state investment has gone into these regions in the past decade. The demographic issues cannot be solved considering the negative population growth of Greece, but an immigrant labor force has worked well for the domestic economy even though this has created social problems that must be addressed, as noted in chapter 3. Education reform aside, the educational level of the Greek public seems to be in good condition in comparison with that of other EU members, as seen in table 6.5. Last but not least, the overgrown state sector that has been dominated by the interests of successive political parties has been the main reason behind Table 6.5

Education levels, 2006 data Secondary education youth (20–24yrs)

Denmark Ireland Greece Spain Italy Portugal EU-27

77.4 85.7 81.0 61.6 75.5 91.7 77.9

Total public secondary Foreign languages education 81.6 66.2 59.0 49.4 51.3 27.6 70.0

2.0 1.0 1.9 1.4 1.7 1.1 1.4

Source: Combination of three indicator tables, Eurostat, Youth education attainment level—total and Total population having completed at least upper secondary education and Foreign languages learnt per pupil.

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Europe’s Greece: A Giant in the Making

Greece’s belated “Europeanization” (Pelagidis et al. 2005). Nonetheless, the fundamentals of the Greek economy seem to be good, and worries such as overexposure in the Balkan region or the subprime mortgage effects may keep the director of the Central Bank of Greece up at night, but they do not constitute the end of days.43 Greece’s entanglement in the Balkans is further evidence of the country’s changing attitudes. From 1999 the Balkan peninsula has been identified as Greece’s “backyard,” and the Greeks welcomed the changes that brought closer cooperation and increased investment opportunities in an otherwise neglected area of Europe. Bastian credits former minister of foreign affairs and current leader of PASOK, George Papandreou, with the changes that took place in the making of foreign policy, which led to increased Greek activities in the region (Bastian 2004, 462). There was a change in Greece’s self-perception from being a Balkan country in the EU, which was mostly a 1980s type of popular cliché, to being a EU country in the Balkans with all its consequences (Bastian 2004).44 When looking at the GDP per capita in the Balkans, we see the huge difference that the Greeks have with their neighbors (shown in table 6.6), which helps explain their changing attitude toward the region. It seems only rational that the Greek government would actively seek the expansion of Greek business in the Balkans by passing Law 2996 titled the “Greek Plan for the Economic Reconstruction of the Balkans,” which the then prime minister Kostas Simitis touted in a presentation at the Thessaloniki Chamber of Commerce and Industry (Eboriko kai Viomihaniko Epimelitirio Thessalonikis) in 2003. He outlined the plan for reconstructing the Balkans as a three-pronged strategy emphasizing (a) private investment, (b) a small investments fund, and (c) a large public works fund (Simitis 2007, 239–240). Table 6.6

GDP per capita in Balkan Countries (PPS) GDP per Capita in 2006 in US$

Population in millions

Albania

2,866.3

3.2

Bosnia & Herzegovina

2,999.8

3.8

Bulgaria

4,088.7

7.7

Croatia

9,582.0

4.4

FYROM

3,113.1

2.0

Romania

5,616.8

21.7

Serbia

3,834.7

9.9

Greece

25,570

11.1

Source: Numbers for Southeast European countries are available in the 2007 transition report by the European Bank of Reconstruction and Development (EBRD) pages, 97, 113, 117, 121, 133, 177, 185 while the number for Greece is taken from the OECD economic Survey vol. 2007 number 5, 7.

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The biggest component of these investments would be the large public works programs that would cover infrastructure at about 79 percent of the fund, while 1 percent would be invested in small works that affect local units, that is, schools, and so on (Simitis 2007, 240). Private investment, which at the time comprised of twenty-nine businesses, would account for the rest of the 20 percent, and approximately half of these businesses are located in northern Greece, which one would think was why the presentation happened in Thessaloniki, Greece’s second largest city located in the north of the country (Simitis 2007, 239). The Greek foreign direct investment in Southeast Europe increased tremendously after 1999 when, led by the now liberalized banking and telecommunications sectors, the Greeks attempted nothing short of an economic invasion, albeit unchallenged by more robust EU economic actors who shunned the region. According to Bastian’s calculations the investment surpassed 7.0 billion Euros. According to Bastian the top Greek FDI recipient in the Balkans was Romania with roughly 3 Billion Euros, followed by Bulgaria with approximately 2 Billion Euros (Bastian 2004, 468). The Greek paradox theorists would argue that Greek investment would be ephemeral or in sectors that are fairly open for entry or exit without long-term investment planning or even opportunity, the kind of opportunistic conquistador style entry and exit in markets where the maximum benefit could be achieved with relatively little investment or exposure. Yet, as the above analysis shows, nothing could be further from the truth. Not only was Greek business involved in long-term investment and partnerships in the Balkans that are still employing thousands of people across the region, but the state was actively involved in encouraging the behavior. What is also more important is that there was continuity from two successive governments in their commitment to these plans, as outlined by former prime minister Kostas Simitis. Prime Minister Kostas Karamanlis, the current incumbent, essentially defended Simitis’ and Papandreou’s policy in the Balkans, though he did not actually mention it specifically for obvious reasons, in a recent article titled “Greece: The EU’s anchor of Stability in a Troubled Region” (Karamanlis 2006). Karamanlis’ former foreign minister, Dora Bakoyanni, also argued as much when, after noting the fragility and problems that still existed in the region, he wrote, “With proactive support and the involvement of the international community, we are working hard to transform the Balkans into a region of Democracy, peace, stability and prosperity focused on a common European Future” (Molyviatis 2005, 13). Even during the most difficult times of the Greek and FYROM relationship, something I will be discussing in detail in the next chapter, the Greeks made sure their commitment to the plans for engagement in the Balkans were not derailed. The current foreign Minister, Dora Bakoyianni, complained to an international audience about FYROM’s intransigence about naming itself

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“Macedonia,” something the Greeks feel implies territorial claims in their own northern region with the same name, and its capital Salonica, yet she did not forget to make the point that Greece bears good will and is willing to go even further with its especially tight economic relations with its northern neighbor.45 According to her, “Greece has made the biggest investments (more than 1 billion) and created the most jobs (20,000) in FYROM of any other country in the world.”46 Economic motives for the flow of FDI in the Balkans, as discussed by Slavrakos and Petrocheilos, include the “multinationalization” of domestic firms due to domestic structural inefficiencies, or the drive to increase efficiency within the firms by expanding into a multinational setting, or because of “ownership-specific advantages, location and internationalization opportunities” or processes inherently part of the increased globalization of production (Salavrakos and Petrocheilos 2003, 334–336). In the end they argue that the Greek expansion was definitely underpinned by economic concerns such as the cost of labor, which is much higher in Greece than it is in the Balkans (Salavrakos and Petrocheilos 2003). One wonders why then the investment did not go to Southeast Asia or Africa for that matter. Proximity is a reasonable conclusion, especially for investment in the garment and food industries, but not a reasonable one for banking or telecommunications. As I indicated above there are certain cultural and historical elements to the expansion of Greek FDI in the Balkans and the Black Sea region as well. In addition, competition for Central European markets such as the Czech Republic, Slovakia, and Poland left the Balkans open for the much smaller Greek actors to operate in. Finally, despite the problems that some have identified with Greek expansion in the Balkans, such as the appearance of a voracious capitalist incentive in the Greek business elite to devour small and unprotected markets, bilateralism reinforced by failure to communicate with EU structures, and failure to coordinate good policy and institutional weakness (Monastiriotis and Tsamis 2007), it seems that political reasons had just as much to do with this expansion as economic reasons. For instance, Monastiriotis and Tsamis argue, “in reality the underlying thesis remains one of penetration and narrow exploitation of markets and opportunities, rather than one of deriving benefits from cooperation strengthening the regional economy, or creating market potentials and critical economic mass” (Monastiriotis and Tsamis 2007, 19). Without fail, once again the argument is that the Greek capitalists are self serving and shortterm in their thinking. Such a conclusion flies in the face of the statements by consecutive leaders in Greece and the explanation given by K. Simitis, the initiator of the Hellenic Program for the Reconstruction of the Balkans (ESOAB), which was that: (a) Greece was in this position (of the receiving aid and FDI) not long ago; (b) Greece is a member of the OECD’s development

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assistance committee, which requires the country to make calls on behalf of developing countries; (c) Greece knows the problems in the Balkans and specifically the western Balkans; (d) unless Greece helps now that it can, it may be again called to assist in new destructive wars, and so on (Simitis 2007, 241–242). In fact former prime minister Simitis argued that the aims should be only one, “Peace, stability and European Orientation.”47 There should be no question that the political elite at the very least is attempting to Europeanize economically and, as we will see in the next chapter, in the area of foreign policy. Once the Greek politicians make the decision to approach the domestic economy and the Balkan expansion within the EU framework, bilateralism is not generally the institutional winner. In fact, over time one would expect that just as there was a change in economic ideology that was followed by structural changes (with the liberalization of several sectors of the economy), there will be structural changes in the relations of Greece and its neighbors if nothing else by the sheer force of economics. We should not forget that the entire European project was founded upon the idea that economic relations will lead to better relations overall and further integration, thus bringing peace and stability to the continent that was ravaged by two world wars. This seems to be the argument that both socialists and conservatives are making regarding Greek involvement in the Balkans. Conclusion This chapter delineated the paradox of politics, policy, and economics in Greece. Having gone through the historical development of the state and the economy in Greece since the beginning of the country’s accession to the EU, I have found that the economic paradox line of argument is flawed. The Greek economy has abandoned the state-directed model (dirigisme) of the past, with all its corollaries such as labor-dominated business policy, interest group–dominated public policy, and socialist economic thinking as a whole. The Greek economy and its regional expansion through the transformation of national companies to multinational ones indicate a change of heart regarding economic policies vis-à-vis state directed economic development. Thus, as far as the Greek economy is concerned, its vibrancy, its growth, and its regional engagement are all good signs for the future. National policymaking was another area where past research indicated there was a paradoxical behavior on the part of Greece. In other words, the potential for better policymaking was there but the advantages were not taken, especially given the impact that the European Union could have upon the country. This chapter tended to agree that the early days of Greece’s accession to the EU were at best troubling, but that there was a turning point in Greece’s relations with its EU partners. Starting in mid-1990s, Greece

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fully adopted a Europeanization agenda and stuck with it irrespective of the change in political scenario. The process of interaction between the EU and Greece is now much stronger and is on a different basis than it used to be twenty years ago, though much still remains to be done. While Athens has not become Brussels as yet, the important fact is that there is a change in the right direction, which supersedes short-term political costs. Finally, there is a genuine political change when it comes to public discourse regarding Greece’s belonging to the EU, which also crosses political lines. The public discourse did not only cover state-society relations, but also Greece’s behavior regarding economic and foreign polices, the latter of which is discussed in the next chapter. Regarding public policy, the move away from the past is evident in the political changes that the socialist party underwent and the friction this move is currently causing within it. It is also evident in the assumption of public policy responsibilities by the conservative party, many of them generated by the socialists but later adopted by the conservatives as their own. The transcendence of public discourse regarding Greece’s European direction and more liberal economic policies is a significant indicator that the Greek paradox may in fact not exist anymore.

Chapter 7

Greece’s Foreign Policy Paradox I            Europeanization of Greece through the lens of the Greek paradox, we must now review the process of the making of Greek foreign policy. What is the Greek foreign policy paradox? Again, it is the disparity between promise and performance in the area of foreign policy. After all, for a long time Greece was the only country with no land borders to the EU in a neighborhood partially ravaged by the omnipotence of communism and partly coming of age in the post-cold war era. Having witnessed brutal wars and genocides throughout the twentieth century and with instability still looming in the neighboring Balkan countries, Greece became a litmus test for the success and failure of overall European Foreign Policy, not to mention of the European project as a whole. Even without considering the overall question of success and failure of European foreign policy, it makes sense to argue that an increasingly Europeanized Greece may be the element of stability in the turbulent Balkan peninsula and provide a roadmap for the newer member states with whom she has cordial relations. Nonetheless, opinions on Greece’s foreign policy within Europe have been divided among those who think that after a prolonged stage of initiation Greek foreign policy has become fully Europeanized and those who believe that it has not (Stavridis 2003, Tsardanidis and Stavridis, 2005). Precisely for these reasons the same consideration should be given to the Europeanization of Greek foreign policy following Loukas Tsoukalis’ dictum that “success and failure of a country’s EU membership. . . . depends largely on its collective ability to play an active part in a never-ending process of negotiations that take place at different levels and that involve representatives of both governments and private interests. The everyday functioning of the EU is still more about diplomacy than it is about democracy.”1

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In this chapter I ask the following question: How have the developments in Greek foreign policy reflected the Europeanization of the process of making Greek foreign policy? The most succinct answer to this question so far has been given by Economides, who argued that “A state with a consolidated democracy, bountiful economic potential, entrepreneurial and managerial skills, strong allies and partners through membership of NATO and the EU, and geopolitical significance could not harness these attributes into international success” (Economides 2005, 488). This is basically an expression of the Greek foreign policy paradox as defined above. It is my contention that when looking at the potential, one has to temper the expectations. Is it possible that Greece could be a world decision-maker? It seems highly unlikely. What would be the expectations for a state in the mid-range power structure of the EU? As in the first chapter, the argument here is that the outcomes of foreign policy decision-making within the EU will differ from state to state, and that different degrees of Europeanization will be achieved by different states at different paces. Economides’ argument is that Greece’s foreign policy is only recently starting to show signs of Europeanization, thus confirming other authors’ findings that Greece is a belated Europeanizer.2 However, once we consider that Europeanization affects not only the style but also the actors involved, their ideology, the process of decision-making, and the problems and the constraints of foreign policy, we might not view Greek foreign policy development as lackluster but as the normal process by which a member state of the EU becomes a full-fledged member. In any event it may not be possible to be Europeanized vis-à-vis all issues of foreign policy, but does this really mean that a state has not “Europeanized”? Europeanization is not just convergence of beliefs and interests, thus some EU member states strongly believe in their neutrality when it comes to making foreign policy while others have had a global interventionist, some argue outright imperialist, attitude toward world affairs. We find states in the EU taking a multilateral approach within the larger international community and attempting to promote a peace agenda, while we also see states willing to forcefully engage international actors. Because such divisions exist in European foreign policy, some argue that EU foreign policy is a sui generis system (Ohrgaard 2004), others argue that it is the sum of the foreign policies of the member states (Moravcisk 1994, Manners and Whitman 2000), and still others argue that even if this is so, it does not matter, since international institutions do not matter (Mearsheimer, 1995).3 The argument here is that EU foreign policy does exist, albeit axiomatically (Jorgensen, 2004:34), and that it makes a difference both internationally and domestically. In the case of Greece, the country has changed not only its style of making foreign policy but also quite substantially changed the substance and focus of it, given the recent international developments in the Balkans. In fact, Greece became

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an active member of the apparatus for making European Foreign Policy not just because of domestic concerns about the collapse of Yugoslavia and its relations with its neighbor Turkey, but also because of its concerns for the global political situation and the War on Terror. The Europeanization of Foreign Policy Here we do not attempt to develop a new theory of the Europeanization process of member states but rather to place the changing Greek foreign policy behavior within, and because of, Europe within this process. In order to understand Greek foreign policy we have to reach at least a tentative agreement on what European foreign policy entails. Having already defined the term Europeanization in chapter 1, we have to consider what it means in the area of foreign policy. Tsardanidis and Stavridis develop an explanatory framework employing three dimensions: (a) the manner in which the EU affects the member state; (b) the manner in which the state affects the EU; and (c) the outcome of the previous two processes (Tsardanidis and Stavridis 2005). The first and the second dimensions need to be examined, but the third dimension is more problematic because it describes the internalization of an outcome by the member states that is neither inevitable nor guaranteed. Some aspects are simply unacceptable to certain states or their publics: in Britain, it is high budgetary transfers to EU coffers; in France, it is increased pressure of liberalization; and in Spain and Greece, it is the fluidity of national borders. As evidenced in numerous policy positions, from intervention in Bosnia Herzegovina, Iraq, and Afghanistan, and to the independence of Kosovo, European states may agree to the process of conducting EU foreign policy, the instruments needed, and even the broad guidelines of action, but the outcome is certainly not an area for meeting of minds. In the cases of the US intervention in Iraq and the independence of Kosovo, the EU was split between those who supported such actions and those who opposed them, fuelling the debate as to the nature of EU foreign policy and its differences within the EU and beyond. Therefore, European foreign policy must be seen as a complicated tri-level game that reflects both the international structure in which EU member states operate as well as the process of decision-making and interest formulation. Using a modified form of Knud Erik Jorgensens’ model of the changing nature of foreign policy in Europe (see figure 7.1), I argue that there are three levels of interaction in any European members state’s foreign policy: (a) the domestic; (b) the European; and (c) the international. Theorists have long considered foreign policy as an ultimate expression of the state’s interests and thus have used concepts such as geopolitics, power, and the national interest to define what it is that states do in the international environment.

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Belonging to international organizations such as the United Nations or the European Union is tangential and matters very little for the purposes of the realist school of international relations (Mearsheimer, 1995). Realists tend to overemphasize power and underemphasize international constraints such as international law, regimes, and organizations. In addition, they treat the state as a single actor with unitary preferences. Europeanists have tried to theorize about the interaction between member states and the supranational institutions they created, and the most elaborate theory is that of liberal intergovernmentalism. Several traditional realist assumptions remain in this theory, such as the unity of state interests and the states’ actions based on a rational recognition of its options, which are hierarchically ordered (Moravcsik 1998). Yet, in his book The Choice for Europe, A. Moravcsik attempts to blend in a process of the state’s preference formation by describing the way states make their eventual decisions about whether or not to delegate power to the EU or pool their choices in EU institutions (Moravcsik 1998, 24). Nonetheless, intergovernmentalism has a hard time explaining EU foreign policy choices, especially when outside influences or domestic groups are involved (figure 7.1). In Jorgensen’s words, “Liberal intergovernmentalism offers a sequential theoretical triad, consisting of mid-range theories of interest formation, bargaining, and institutional design. The package also includes a sophisticated methodology and novel ideas concerning thorough theory testing. Unfortunately none of these approaches have been systematically applied in studies of EFP” (Jorgensen 2004, 40). It is essential that researchers who focus on the making of foreign policy within the European Union do not underestimate the domestic intervening variable

International system/society

DIV

Common foreign policy

European institutions

DIV

European states

Figure 7.1

Foreign policies of member states

The changed nature of foreign policy in Europe.

Source: Adapted from G. Alons, “Predicting a State’s Foreign Policy: State Preferences between Domestic and International Constraints,” Foreign Policy Analysis 3, 3 (July 2007): 222.

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(DIV) that exists as the interaction between domestic, European, and international actors takes place. Foreign policy entrepreneurship is essential in explaining foreign policy behavior. In the case of Greece, one can explain some of the ebbs and flows of foreign policy regarding the EU by including a domestic intervening variable (DIV) as well as an international one. Domestic determinants of foreign policy are too important to discard and leaders’ preferences, domestic coalitions, and the degree of issue polarization affect state foreign policy preferences (Kalaitzidis and Felsen 2007). Gerry Alons adds the international dimension to this model by arguing that the international system, its structure, and thus its stability become an important point of consideration if not a constraint for states’ preferences by affecting the states’ vulnerability (Alons 2007, 220). Alons develops a state preferences matrix in which he accounts for the impact of internal and external polarity upon the behavior of the states (see figure 7.2) (Alons 2007, 222). He argues that when external polarity is high, then states are more likely to pay attention to domestic interests since the international system is rather stable, given that high external polarity means uneven distribution of power, and the higher the polarity the more stable the international system is (Alons 2007, 219). Consequently, the lower the external polarity, the more the state is inclined to pay attention to the international system at the expense of the domestic interests that are attempting to influence foreign policy, and so on. This typology is similar to others that have been proposed regarding the process of European convergence of interests in other areas and coincides with my own views of Europeanization described in chapter 1. For

High

External Polarity Low

Figure 7.2

Internal Polarity High Low B A Domestic No decisive effect of considerations will either domestic or be decisive international considerations: process variables gain in importance C International considerations will be decisive

D No decisive effect of either domestic or international considerations: process variables gain in importance

Internal polarity, external polarity, and state preferences.

Source: Adapted from G. Alons, “Predicting a State’s Foreign Policy: State Preferences between Domestic and International Constraints,” Foreign Policy Analysis 3, 3 (July 2007): 222.

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the purposes of European foreign policy in general, and for Greek foreign policy in particular, Greek foreign policy is examined along the same historical lines that have been established in chapter 2: (a) pre-accession Greece; (b) the 1980s, which represent the initial stages of Greek membership and coincide with the first two socialist governments of Greece; (c) the 1990s, which are mostly dominated by the socialists again but include a changes in domestic political/ideological balances and changes in the regional and international levels; and (d) the period of 2000 to the present. In the case of the socialists in the 1980s, external polarity was high, thus the international system is fairly stable and political leaders such as Andreas Papandreou, the socialist party’s founder, tended to focus more on the domestic agenda. Relations with Europe soured in several areas, some of which were related to foreign policy, but they reflected the differences of policymaking ideology and style rather than the foreign policy focus of PASOK’s leadership. In the making of foreign policy of the 1980s there is a clear case of misfit of style and policymaking between Greece and its EU partners that created high adaptation pressures. As a result of these adaptation pressures, the Greeks changed their foreign policy styles. By contrast, in the 1990s we have several events that caused the international polarity to change. One can argue, of course, that international polarity was still high with the United States as sole superpower. However, the 1990s was a decade of transition from a bipolar world to a unipolar one, and that decreased the saliency of the system, thus causing the Greeks, as well as the rest of Europe, to tend to international affairs with increased alarm. The collapse of the Berlin Wall and the subsequent collapse of the Soviet empire and the bloody dissolution of Yugoslavia all demanded particular attention by the EU members, especially the Greeks, who found themselves in the unenviable position of watching their neighborhood unravel. The adaptational pressure regarding the changing environment in southeastern Europe and the Middle East was not so great considering that the EU had no mechanism or even a plan on how to deal with the issues at hand. States reverted to traditional realpolitik attitudes and failed to achieve a common European Foreign Policy. In this context, the impact of political entrepreneurship and domestic political group mobilization is vital to understanding the foreign policy behavior of states such as Greece. Moreover, as Greek political leaders became aware of their inability to get a European consensus on Yugoslavia, the Greek government realized that it would also be very difficult to do the same vis-à-vis Turkey and Cyprus, and thus the Greeks gradually changed their position. Following Greece’s success in entering the EMU (January 2001), the increased polarity of the international system with the United States in the role of sole superpower, and the eventual accession of several Balkan countries in the EU, including

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Cyprus, etched a Greek foreign policy operating in quadrangle A, where no domestic or international interests are so decisive as to dominate the country’s making of its foreign policy. Adaptation pressures from the EU are not particularly high, while both Greece and its European partners seem to be accommodated by this situation. Finally, by analyzing these periods I hope to establish that the Greek foreign policy paradox is rather exaggerated and that there is steady progress made, albeit sometimes haphazard and with ebbs and flows, and conclude that Greece is within the expected behavioral parameters of a medium-sized power within the European Union. After all, as Tsoukalis notes, “Adding insult to injury Western allies seemed often to be chastising the Greeks for not behaving like Scandinavians—and in the Balkans at that!”4 On the other hand, several commentators have chastised Greek foreign policy as ineffective primarily for not being able to defend Greek interests at the European/ international level or for being unreasonably obstinate and ideologically anti-Western (Mardas 1992, Noel 1992, Demestichas 1997, Lazaridis 1997, Ajami 2003, Michas 2002). This book has the benefit of hindsight in several Greek foreign policy issues, such as the style within the EU or the dissolution of Yugoslavia, and from the discussion that follows, it seems that some of these criticisms have been premature. The Pre-Accesion Period It is fair to say that most people think of Greek politics before and during the seven-year dictatorship (1967–1974) as dominated by the United States. Greece was admittedly a satellite state in a nasty cold war that allowed very little room for maneuvering from small decision-taking states. One would be hard-pressed not to see the parallels to the plight of Greece during these times and those of dependent Muslim nations caught in the web of the War on Terror. During the days after September 11, 2001, Richard Armitage, the then undersecretary of state, called President Pervez Musharraf of Pakistan and threatened to “bomb Pakistan back to the stone age.”5 During 1964 when the Cyprus issue was one of the hottest international issues, President Johnson said to the Greek ambassador, “Then listen to me Mr. Ambassador, fuck your Parliament and your Constitution. America is an elephant. Cyprus is a flea. If these two fleas continue itching the elephant, they may just get whacked by the elephant’s trunk, whacked good. . . . We pay a lot of good American dollars to the Greeks, Mr. Ambassador. If your Prime Minister gives me talk about Democracy, Parliament and Constitutions, he, his Parliament and his Constitution may not last very long.”6 Not long after that, in April of 1967, Greek democracy collapsed and gave way to a dictatorship led by Colonel Papadopoulos, who had ties to the United States.7

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It is easy to see why during times of high external polarity, domestic issues might dominate the political agenda. In the case of Greece, Johnson’s attitude is hardly an endorsement of paying attention to the issue of Cyprus. In fact, Dokos argues that during the height of the cold war, Greek security policy was internally focused against the communist threat from within, thus international threats were left to US-dominated NATO (Dokos 2003, 42), further noting that “Greek security arrangements were closely identified with American foreign policy,” (Dokos 2003, 45). Consequently, Greek politics, both internally but also externally in the realm of foreign policy attitudes toward the United States, have been affected by this one-way imperial relationship between Greece and the United States. During the 1960s, one can even argue right after World War II, there were significant economic and social developments that dictated changes in the attitudes of Greeks, such as high rates of economic development, urbanization, and the creation of a sizeable middle class (Couloumbis 2003, 33). This process of sociopolitical change was interrupted by the Colonel’s dictatorship that failed to implement any substantive changes. Moreover, it failed in the same areas that other military leaders failed: the leaders became prisoners of their own corporatist interests and did a poor job at it. The Argentine military in the Falkland’s war did repeat the same mistake and faced the same fate as the Greek military. The Greek military instigated a coup attempt against the legitimate leader of Cyprus, thus providing the Turkish military establishment with an excuse to invade and occupy the island for over thirty years in 1974. Discredited, the Greek Junta collapsed and Konstantin Karamanlis led the process of democratization and accession to the European Union. According to Couloumbis, the options that Karamanlis faced at that time of great crisis to the Greek political system were not great. They included the following: (a) initiate immediate war; (b) achieve a truce and prepare for war soon thereafter; or (c) concede setbacks in Cyprus and change Greece’s strategic doctrine and foreign policy aims (Couloumbis 2003, 34). He chose the third option and focused on building a Greek deterrent force by building up and modernizing the discredited and demoralized Greek armed forces and by actively seeking to enhance Greece international protection by further joining the West in the form of the European Economic Community. This two-pronged approach seems to have worked well for the country so far, even in the face of stern opposition from the socialist camp that came to dominate Greek politics in the next twenty years. The Greek socialists at the time kept highlighting the inferior status Greece had in this imperial relationship with the West, especially with the United States, and promised to free the country from its Western bonds. As shown in the next section, however, they failed to follow through with that promise for good reasons.

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The Pasok Governments in the 1980s and Europe During the country’s first year of participation in the EEC, Greece’s positions on European Political Cooperation (EPC), the forerunner of Europe’s Common Foreign and Security Policy (CFSP) of the 1990s, remained reserved and nonconfrontational. At the time, the prevailing consensus among Greek political and economic actors can be summed up by the views of the then prime minister, Karamanlis, who said, “We belong to the West,” and “Greece will participate in the decision-making process that affects our fate, instead of remaining small and isolated on the margins of international life” (Valinakis 1995). On the whole, in the first months of Greek participation in the EC, there was a positive reaction in domestic political and economic circles to Greece’s accession to the EC. Domestic elites felt that the EC could help Greece’s economic development, its trade and investment, and strengthen the country vis-à-vis its neighbor Turkey. Economic prosperity would be excellent for Greece’s security concerns. Nonetheless, with the elections of 1981 and the arrival to power of the socialist party PASOK, Greece’s foreign policy positions toward Europe and other multilateral security organizations were transformed. This has been well documented (Mardas 1992, Valinakis 1995, Clogg 1983, and Kariotis 1992). PASOK immediately made numerous inflammatory anti-EC statements. Its leader, Prime Minister Papandreou, attempted to appeal to ideological radicalism and populist sentiment in Greek society. In his nine years as prime minister, it is clear that Papandreou’s leadership choices and his ideology and belief system had a direct impact on Greece’s foreign policy direction (Papahelas 1995). Papandreou believed, for example, that Greece remained too dependent on the West for its security. He felt that this dependency was harming Greek interests and had to be curtailed. Papandreou sought a more independent foreign policy, and he quite intentionally took opposing positions to European and NATO partners on foreign policy issues. It led to repeated mini-crises between Greece and its partners. For example, in 1983 in an attempt to “re-nationalize” Greek foreign policy, Papandreou stated that Greece would sign a foreign policy agreement in Stuttgart with its European partners, but then the prime minister adamantly refused to give up his right to conduct foreign policy according to Greece’s national interests (Valinakis 1995). Papandreou wanted to fight against what he perceived to be a situation in which neocolonial great powers were carving up the world into spheres of influence, and he wanted to lessen the involvement of the United States and European powers in Greek affairs. He was sympathetic to the efforts of such groups as the Nonaligned Movement at the UN. Papandreou’s ideological views helped shape the government’s foreign policy toward Europe.

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Implicitly asserting that previous Greek governments were puppets of superpower conflicts, the ideology of the government and its leader helped to promote a “new” Greek foreign policy, one that clearly stemmed from Papandreou’s domestic priorities and interests. The leader’s foreign policy positions helped build a new domestic political coalition to support the new foreign policy. Furthermore, PASOK intentionally raised the level of polarization within the political system over foreign policy issues. PASOK’s rhetoric resonated so well with Greek society that from 1981 to 1985 the nationalist opposition in Greece’s parliament followed, rather than opposed, PASOK’s radical populist foreign policy positions and it too became increasingly vocal against Greece’s EC membership. The foreign policy positions of Papandreou transformed domestic politics. Papandreou’s policies, while appearing ideological, emotional, nationalistic, and populist, were indeed rational and calculated. They were driven primarily by domestic political interests. Papandreou’s foreign policy served to consolidate both his PASOK Party and the right-wing New Democracy Party as the dominant mass parties of Greece. Previously, the Right had been represented by traditional elements within ERE and New Democracy. By the 1980s, New Democracy’s mass party appeal grew. On the left, the old communist left was absorbed by PASOK and PASOK was consolidated as the mass party of the left. Prime Minister Papandreou called for an end to “dependency,” and a new more nationalist foreign policy helped achieve important domestic political aims. At one level, the more reasonable choice might have been to cooperate with its EC partners. However, in looking at all three levels of this complicated three-level game, it becomes evident that, while a consensual approach would have pleased Greece’s European partners, this might have also greatly compromised PASOK’s objectives domestically. Instead, Papandreou opted to pursue a confrontational foreign policy to help build a domestic coalition. This greatly helped Papandreou’s ultimate domestic goal for the dominance of his mass party, PASOK. At the same time, the rhetoric of Papandreou did not leave a permanent rift between Greece and its European and American partners. While US-Greek relations were tense during the first term of Papandreou, Greek-EC relations were by and large unaffected. As theory would have it, in an era of high external polarity the Greek political elite turned to domestic issues, and a domestic intervening variable seemed to affect the foreign policy decision-making greatly. Moreover, by 1989 PASOK had become a dominant force in domestic politics, and its foreign policy became more conciliatory and cooperative with regard to Europe and the United States. PASOK actively worked with European institutions to further its goals. In particular, PASOK saw other European member states as Greece’s partners in its primary foreign policy and security challenge, its neighbor Turkey. Changes in style, increasing

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expertise in the European processes of decision-making, and bureaucratic and political contacts all served to smooth out the Greek membership in the EU until the collapse of the Berlin Wall, which is the watershed event for the international polarity in world affairs. The changing global polarity that took the better part of the 1990s to complete, the raging ethno-nationalist conflicts in the former Soviet republics, including Russia itself, and the ultimate collapse of the Yugoslav federation with all its nastiness, reduced the external polarity factor, and countries, especially those like Greece, had to focus on international issues more than the domestic ones. The 1990s and the “Macedonian” Crisis In the late 1980s, Greek foreign policy had moved away from the confrontational posture of Papandreou toward the country’s European partners and Greece’s main rival, Turkey (Constas 1999). Both Greece and Turkey were involved in an unsuccessful attempt at conciliation led by Papandreou and Ozal, the late Turkish president, in Davos, Switzerland. It was a failed attempt not only because the two leaders failed to produce substantive results but also because the confidence-building measures they agreed upon were never implemented (Dokos 2003, 43). It seems it was the wrong time to attempt a reconciliation given the fluidity of the international system and the defensiveness of states within that system due to its changing nature. The domestic issues faded in the face of the reduction of external polarity, and the international issues gained prominence, as is described in figure 7.1. In the same period, the Balkan region began to deteriorate, and events in the region posed new threats for Greek security. Greece was unprepared for the dramatic changes that would take place in the Balkans from the late 1980s onward (Stearns 1995 and Glenny 1997). The Balkan crisis caught Greek and other diplomats off guard. In the words of one foreign diplomat, “Truly, the compass of Greek foreign policy has been swinging wildly to locate Greece’s magnetic north, and the progress of reorientation has just begun”(Stearns 1995). It is not unfair to say that the Greeks were wholly unprepared for the rapid and cosmogonic changes the collapse of the Soviet Union brought with it. Recently, in a discussion with a Greek diplomat in the United States, I was told, “We made tremendous mistakes, but there was also no way that Greece was going to be ready for changes such as these.”8 What seemed apparent to the Greek and European foreign policy communities was that Greece would be better off working within the framework of the EU and with its European partners to deal with the crisis in the former Yugoslavia. Nevertheless, Greece’s foreign policy position was not sympathetic with or in line with EU goals in the region. Instead, Greece picked a diplomatic fight over the former Yugoslav republic of Macedonia—FYROM.

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During the early 1990s, Greece’s foreign policy position remained unclear, owing to conflict within Greece’s leadership, increasing nationalist rhetoric from segments of society, some of whom where solid blocks of interest groups such as the Orthodox Church that dominated the debate, assisted by an opposition that would lend support to noncooperation and Greek intransigence. In fact, Tziampiris argues there was a process of Greek cooperation undertaken in 1991–1992 in terms of FYROM, which failed to produce tangible results for Greece (Tziampiris 2000). This is not surprising, considering the fact that Greece already had become a more cooperative member in the EU structures at the time. It is also not surprising that the effort failed considering the dominance of international issues in the making of foreign policy, which meant that most countries in Europe considered these decisions though the national interest frame, and also that the timeframe for achieving an agreement was tenuous and short. Consequently, Greece opted for a more nationalistic and confrontational foreign policy as regards the former Yugoslavia in general, and as regards the “FYROM issue” in particular. From 1990 to 1993, Greece’s approach to the problem of the Former Yugoslav Republic of Macedonia (FYROM) was framed by Prime Minister Mitsotakis of the conservative New Democracy Party, as well as by his foreign ministers A. Samaras and K. Papakostantinou, yet there remained much disagreement within the Greek leadership concerning the handling of the issue. Mitsotakis supported a more conciliatory approach, while Samaras attempted to undermine the prime minister’s efforts (Zahariadis 2006). At the same time, internationally, Greek diplomats failed to sensitize other European diplomats to the Macedonian issue. They could not convince other countries of the geostrategic, political, and historical significance of the Macedonian naming issue. As a result, many EU countries were not predisposed toward the Greek position, and the Greeks felt isolated on the matter. Hence, the international pressure mounted for Greece to take the step of recognizing the republic of Macedonia. This helped bring about a mini-crisis between Greece and Europe over the issue. At home, a solution was difficult to arrive at because of a combination of domestic factors. First, in terms of leadership, the divisions among leaders over the issue hindered efforts at a solution (Zahariadis 2006). Second, it was difficult for New Democracy to build a coalition of political actors on this issue. PASOK refused to compromise on the issue while sitting in opposition, since it better served the party’s interests to oppose New Democracy. Extreme nationalists on both the right and the left were defiant, and a socalled Red-Brown anti-Macedonian coalition emerged in the country. New Democracy clearly remained without a workable two-level strategy. The party was unable to capture support by taking a position on either side of the issue, as PASOK had done on EC to isolate the communists in the 1980s.

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New Democracy had to remain pro-West and pro-Europe, moreover, since PASOK occupied the other position. In short, the conservative and short-lived New Democracy government suffered from the lack of a single voice in its leadership over this foreign policy issue. New Democracy could not build coalitions of support for the issue. Finally, it was not the beneficiary of the growing domestic polarization over this issue, since the issue took away support from its own base. New Democracy had no place to turn, while PASOK was rising in the polls as the issue unfolded. As Veremis notes of Papandreou, if “confronted with a choice between external and internal priorities—especially if the poll ratings showed a decline in his popularity—Papandreou would never be found wavering” (Veremis 1995). The domestic politics surrounding the FYROM issue between 1991 and 1993 paved the way for PASOK’s return to power in 1993. Although PASOK did not suffer from the divided leadership that plagued New Democracy, it still had to be sensitive not to further polarize society. Prime Minister Papandreou also had to remain consistent in his policy. He declared a unilateral embargo against FYROM, which the Yugoslav Telegraph Service reported greatly affected the small country.9 Papandreou’s party, which espoused radical rhetoric during its stint as an opposition party, had little flexibility when it came to putting into place its election promises. Furthermore, the Papandreou government faced significant internal opposition to finding a compromise even though it enjoyed a secure majority in parliament. The rebellion was led by a former PASOK Minister and early Papandreou confidant with tremendous nationalist credentials, K. Kapsis, as well as former minister of public order S. Papathemelis. The latter was a Greek Macedonian himself and enjoyed the support of a number of religious and socially conservative interest groups. The leadership was tied to an adversarial position vis-à-vis FYROM and faced a large enough challenge within the rank and file of the party to pursue this confrontational approach. In Karolos Papoulias words, to the current President of Greece (at that time the Greek Foreign Minister), the name Macedonia “smells of territorial claims.”10 From an international observer’s perspective, it was a great mistake to pursue confrontation, which was perceived as irrational in terms of Greece’s long-term foreign policy orientation (Zahariadis 2006).11 In fact, the New York Times wondered about the dispute in an article named “the Land that can’t be named.”12 The English publication The Spectator published an article “Fear the Greeks” with a picture of the Parthenon surrounded by barbed wire and military guards.13 In Canada the Toronto Star saw FYROM as the perennial Balkan tinderbox ready to ignite at a moment’s14 notice, engulfing FYROM and Greece over the name dispute. Greece’s EU partners

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were working on a coherent strategy in the Balkans, and the Greek moves undermined these efforts. The embargo imposed on FYROM in 1994 was challenged at the European Court of Justice, which in turn opined that the Greek embargo (did not violate) the treaty of Rome.15 Moreover, the Europeans had an unhappy first experience with PASOK under Papandreou and did not wish to become involved in more problems (Zahariadis 2006). PASOK’s foreign policy earned Greece the criticism of both Europeans and the United States. Indicative of this is an article in the British publication The Economist titled “How Greece’s ailing leader on last legs/ Papandreou may rule his country with a frail hand but he still has a few tricks up his sleeve,” which was subsequently reproduced in its entirety by the Globe and Mail in Canada.16 Nevertheless, at the level of domestic politics, Papandreou was indeed responding to political necessity. In addition to the heightened domestic polarization in the country and the specific configuration of coalition support that existed for the Macedonian issue, Papandreou also sensed that the mood of the country was turning anti-EU and anti-system, owing to the nation’s insecurity and the lack of international support that the population felt in the wake of the Yugoslav crises. The consequences of the collapse of Yugoslavia were borne more by Greece than by any other country—border insecurity, a flood of immigrants from war-torn countries, and the potential for spillover of political instability. In the view of many Greeks, the Macedonian challenge to Greek sovereignty was only one in a long line of difficulties that Greece had to face alone. In short, the Macedonian question went to the heart of Greek nationalism. It was an issue that generated support on both the right and the left, and in religious and secular communities. The government merely acquiesced to a coalition of interests in which the Greek Orthodox Church and radical nationalists played key roles (Michas 2002). Therefore, under Papandreou, a broad coalition on the issue existed and leadership was united and supported by the rank and file. The results were not really optimal by the European point of view, but how could they be? Greece then took over the rotating EU presidency with somewhat a sour note, according to the New York Times (something that would be repeated a decade later during the early days of the invasion of Iraq by the US forces).17 In the end, despite the seemingly obstinate Greek foreign policy position, there was no change in Greece’s international standing, and no breakthrough in relations between Greece and Europe.18 The Europeans at first tried to work with the divided New Democracy government of Mitsotakis, and then with the confrontational PASOK government of Papandreou,19 which at one point stated to the Europeans, through the then undersecretary of state Theodore Pangalos, that “[If it continues] we have no wish

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to stay in this [EU] game” (Pangalos 1994). Despite threats and pressure, Greece was able to have its way, placate domestic nationalist sentiment, and maintain solid relations with its European partners and the United States. Greece eventually supported the US-brokered Dayton Peace Accord in 1995, which sought to bring stability to the Balkan Peninsula (Pangalos 1994). In sum, Greece managed to satisfy immediate short-term domestic coalition needs during the PASOK era without harming longer-term international interests—and ultimately proved to be a reliable participant at Dayton. The issue of naming Greece’s northern neighbor remains dormant, although President Bush brought it up during Prime Minister Karamanlis’ visit in Washington, DC, in May of 2004. One assumes this was a “heads up” meeting because the United States recognized FYROM under the name Macedonia on November 5, 2004.20 In late 2007, through a flurry of diplomatic activity, the issue of FYROM’s name took on a new life. Greece and Macedonia jockeyed for position while the US mediator Matthew Nimitz offered several options to both. With the issue of naming Greece’s northern neighbor practically the only issue separating the two otherwise friendly countries, one would think that a mutually acceptable naming could be reached. However, internal politics seem to have interfered again. Greece’s position shifted over the preceding decade and it now seems possible that a composite name including the designation Macedonia would be acceptable. On the other hand, the government of FYROM, having enjoyed recognition under the name “Republic of Macedonia” by all major powers and indeed much of the world, is having a hard time convincing its people internally that a compromise is in its best interest even though it is facing a veto by the Greek government on its accession to NATO in the Bucharest Summit.21 Although membership to international organizations such as the EU and NATO may be a huge incentive for a republic with severe ethnic problems, ongoing economic underdevelopment, nationalism, and a frail government do not allow for major developments on that front. Greek-Turkish Relations In the late 1990s, and after the Imia crisis, a dispute over the eponymous islands between Turkey and Greece that almost escalated to war in 1995, Greek-Turkish relations started to progress on the path of normalization. But it was not until the end of 1999, and after two strong earthquakes occurred in both countries one month apart, that the climate truly seemed to change. Since the beginning of the new millennium Greek foreign policy within the EU has seen substantial changes especially in the area of Greek-Turkish relations. Turkey started accession talks with the EU in 2004, which are currently kept on a holding pattern, after Greece lifted its objections to Turkish

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membership. Economides calls these changes alternatively “rehabilitation,” “re-Europeanization,” and “normalization” (Economides 2005, 481–482). Greek-Turkish relations, however, do not deviate from the three-level game that I have described above and seem to have been equally affected by domestic politics, much in the same manner that Greece’s relations to its Balkan neighbors have been. Domestic considerations, public opinion, and international-level interactions do affect the behavior of Greece in the EU foreign policy realm, as is evident in the case of Cyprus. By far the most significant issue in Greek-Turkish relations, the Cyprus conflict began in the early 1960s, almost as soon as the island nation gained independence from British rule. Cyprus is still a very salient matter that remains unresolved to this day. In 1974, Turkish forces invaded Cyprus in response to the Greek military’s attempt to overthrow the Greek-dominated government led by Archbishop Makarios. With US collusion and British acquiescence, the Turkish army divided up the island and occupied the northern half of the territory, while the south became the Republic of Cyprus (Mallison 2007). Under that name, but with the understanding that this includes the island nation in its entirety, the Republic of Cyprus became a EU member on July 28, 2003.22 In the late 1990s, Turkey became concerned about the accession talks between Cyprus and the EU, as well as its own accession talks. It was a period in which Greece, relying on its secure position in the EU, could exact more from Turkey—since the latter wanted better ties with Europe. Nevertheless, instead of making additional demands from Turkey and stiffening its resolve against its longtime enemy, Greece moved toward a rapprochement with Turkey. Although it may seem that the most pragmatic foreign policy strategy for Greece might have been to use its clout with other EU states to make demands upon Turkey over Cyprus and other territories in the Aegean Sea in exchange for Turkish talks with the EU, Greek foreign policymakers decided to move toward opening up relations with Turkey. As in the previous case studies, the reasons for this perhaps unusual foreign policy step can be found not only in the international context but also in Greece’s domestic political situation. The prospect of EU membership for the Greek part of Cyprus was a potential blow to Turkey, which was an aspiring EU member. It would complicate Turkey’s own accession talks if the Greek-Cypriot government gained a place at the EU negotiating table while Turkey still did not have one. Moreover, the EU talks also changed the Cyprus issue from a bilateral one into a multilateral one. Cypriot accession also offered Greece greater leverage over Turkey in negotiations, since the Turkish government viewed EU membership with a sense of urgency. Interestingly, however, this leverage was not employed by Greece.

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Instead, the international conditions altered domestic calculations in both countries. Cyprus-EU negotiations offered a new path toward the normalization of relations between Greece and Turkey (Turan and Barlas 1999).23 In addition, relations with Turkey took a dramatic turn for the better in 1999 when the “earthquake diplomacy” created goodwill between the two countries and helped create a favorable diplomatic environment. Since then, both Greeks and Turks agree that the credibility of their two countries within Europe will be enhanced by their achieving better relations and working out their differences. The post-1999 period has marked a new age in Greek-Turkish relations. However, understanding the international context behind this change is not sufficient. One must look at the domestic politics of Greece to understand the dramatic about-face in Greek foreign policy. Leadership has played an important role in bringing about change. Foreign Minister Papandreou is widely known for his pragmatic approach to foreign policy. Papandreou managed to develop a good relationship with his counterpart in Turkey, Turkish Foreign Minister Cem. Papandreou even acted as a witness at the marriage of Cem’s daughter. By the end of 1999, ten bilateral agreements had been signed between the two countries (Ozuglu 2004). It was a victory in the realm of personal leadership. In addition, the Greek government was also able to build a coalition of political and societal groups that favored rapprochement as a foreign policy strategy in the late 1990s. This coalition included the academic community, leading think tanks, and a growing number of centrist politicians who supported Prime Minister Simitis and his foreign minister. In addition, numerous business and societal groups gradually warmed to the idea of better Greek-Turkish relations, given their common economic interests and their common security interests in the Balkans. Turkey’s possible accession to the EU has been viewed increasingly as a positive influence on Greek trade and economic development. Public opinion polls in Greece reflect the change in attitude toward Turkey. This change in attitude began in the late 1990s. Today, there has been a significant increase in favorable views toward Turkey’s accession to the EU, as reported in the Athenian daily Kathimerini.24 In fact, when in 2004 the UN-initiated referendum for the reunification of Cyprus collapsed, the animosity between the two sides was not reignited. In addition, recent research suggests that even though the reunification process collapsed because the Greek-Cypriot side rejected the so-called Annan Plan, named after former UN secretary general Kofi Annan, who was the underwriter of the plan, it seems that the two communities were not so far apart. Greek Cypriots were not found to mistrust their Turkish counterparts and generally believe that they can coexist with them even though the plan was rejected at a 75 percent rate (Georgiadis 2007). Considering the widespread

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rejection of the plan, one might suggest that the process is dead. However, upon closer inspection Georgiadis finds several points, such as the issue of demilitarization of the island, the issue of Turkish settlers, and economic issues, where the plan itself could be modified to become acceptable to the Greek community, thus increasing its chances of passing in the near future (Georgiadis 20007). Far from being pessimistic, and given the new presidency of the republic of Cyprus under President Hristofias, the international community, as reported in the Greek daily To Vima, is starting a new diplomatic process widely expected to lead to a new referendum.25 Having noted the positive side of Greek-Turkish relations, there is indeed a need to recognize the obstacles to furthering the gains that have been achieved so far by the two countries. One domestic variable of the rapprochement between Greece and Turkey goes through Nicosia. Indeed, Loizides argues that the concept of “motherland nationalism” or identification with the corresponding community’s kin in Greece and Turkey is on the rise on the island of Cyprus (Loizides 2007). Ethnic nationalism derailed the prospects of Cypriot reunification in 2004 when a proposed UN reunification plan was rejected by the Greek-Cypriot side as unacceptable. It would seem that nationalist feeling in the two communities made rapprochement impossible in this case, although Loizides argues that the increased identification of the two Cypriot communities with their corresponding motherlands could provide the Greek and Turkish governments additional impetus to push the two communities into reunification soon (Loizides 2007, 185). There are, however, some important considerations besides ethnic nationalism on the island of Cyprus. There is the matter of Turkey’s continuous refusal to recognize the Republic of Cyprus since 1963, which leads into a legal and political debacle with the EU (Talmon 2006): “Turkey is indeed in violation of European law on the proper treatment of Cyprus” argued the New York Times.26 As long as the two communities remain divided, the Turks will have a problem regarding accession to the EU, and, consequently, this will translate into a problem for Greek-Turkish relations regardless of the recent rise of goodwill between the two countries. Especially when considering the taboo status of Cyprus foreign policy within Turkish foreign policy circles, indeed within the Kemalist establishment, one can argue that goodwill can only carry the two-state rapprochement so far (Robbins 2007, 297). Then, of course, there is the matter of the defense zone between Cyprus and Greece. Due to the nature of the declaration of independence by Cyprus, both Greece and Turkey were made de jure guarantor powers on the island until the Turkish invasion separated the two communities and established a de facto security zone in the north of Cyprus between Turkey and the Turkish occupied territory in the north, while a more ambivalent situation exists between the Cyprus South and Greece. Considering that Cyprus

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cannot provide for its own defense against Turkey, Greece and Cyprus developed a Joint Defense Doctrine, starting in 1993 (Aristotelous 1995, 75). It is within these parameters that the purchase of Russian-made S-300 missiles became the hottest issue between the three countries in 1998. As reported in the New York Times, the Cyprus government bought S-300 antiaircraft missiles from Russia, scheduled to be delivered in August of 1998.27 Matters escalated very quickly after that (Salish 2004), until in January 1999 the Greek and Cypriot leadership announced that they had decided against the deployment of the system on the island, following the Turkish reaction of military escalation, and instead deployed them in the Greek island of Crete. Although both the Greek-Cypriot opposition parties as well as the Turkish leadership opposed such a move for their domestic reasons, neither made any action to further escalate the crisis following that decision. While the crisis was finally averted and the war of words quickly dissipated, this mini-crisis underscores the fragility of relations between the three sides in Southeast Europe. On the Turkish side, the complaint is frequently made that the EU does not understand Turkeys’ peculiarities, and considering that accession talks between the two parties might not end up in full membership, it would be problematic for both parties (Aybet 2006). Other bilateral issues between Greece and Turkey have proved to be “sticky” throughout the years, notwithstanding the declaration of Casus Belli by the Turkish prime minister Tansu Ciller in 1994 over the extension of territorial waters in the Aegean to twelve miles, as per the Law of the Sea convention (Dokos 2003, 47). In addition to the Cyprus issue, which is the most dominant foreign policy problem between Greece and Turkey and which has widespread repercussions in EU foreign policy, there are several other obstacles in normalizing relations between the two countries. First, there is the dispute over the Aegean Sea, zones of control, and the Imia crisis. The Imia incident highlights the sensitivity of foreign relations between Greece and Turkey. When a Turkish freighter, the Figen Akat, ran aground on Imia islands (otherwise known as Kardak isles by the Turks, which are no more than two uninhabited rock formations between the two countries), its captain refused assistance from the Greek authorities (most likely because of compensation concerns) by claiming to be in Turkish territorial waters (Raftopoulos 1997, 429). The incident itself was the beginning of a long dispute between Greece and Turkey that almost led to war between the two countries in 1996. The Turks claimed that Kardak isles are Turkish territory, even though they are just 2.5 miles from a Greek island. The Greeks rejected the notion outright, citing the Treaty of Paris, in which the Italians ceded a whole complex of islands known as the Dodecanese to Greece as part of a post-World War II settlement, which included the Imia isles (Georgoulis and Soltaridis 1996, 59). Legality notwithstanding, the immaturity of civil society and the media

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on both countries was displayed in this incident, with a Greek priest going to the islands to place a Greek flag there on January 25, 1996, only for it to be removed by four Turkish journalists of the Turkish newspaper Hurriet and replaced by a Turkish flag on live TV on January 27, 1996 (Raftopoulos 1997). Consequently, both countries landed troops on these islands, and a Greek helicopter crashed during a night flight by the isles. It seemed that for the first time since the 1974 invasion of Cyprus the Greeks and Turks were going to engage in a full-scale war and destroy each other. President Clinton personally intervened and successfully stopped this dispute from leading to war.28 In fact Clinton said in a subsequent interview, “Greece and Turkey have too much in common, too much to gain from getting along with each other, and we have too many other important issues in that area that affect both their interests for this small piece of land to be allowed to develop into a crisis for the two of them. So the United States is doing everything we possibly can, and I have some hope that the crisis will abate over the next 24 to 48 hours.”29 Subsequently, the two countries disengaged but have held firm on their demands without reigniting the situation. The Imia incident was followed by the S-300 engagement of Cyprus Greece and Turkey, followed soon after by the Ocalan fiasco. Abdulah Ocalan, the leader of the Kurdish Workers Party (PKK), which is currently waging war against the Turkish authorities, was forced to flee from Syria, where he was living in exile, first to Russia and then to Italy, where the Italian prime minister Massimo D’Alema, was unable to provide Ocalan refugee status given his weak coalition government and the pressure exerted by the Turkish government. Consequently, some Greek officials, without the approval of the Greek government, brought Ocalan to Greece, and when this was discovered he was sent by the Greek foreign minister to the Greek Embassy in Kenya. The Turkish government, knowing that Greece had Ocalan, accused the Greeks of supporting terrorism, and subsequently the Greeks surrendered him to Turkish agents in Kenya (Gundogdu 2001). After this quite embarrassing incident for the Greeks, three ministers were fired, and the incident did not further endanger Greek-Turkish relations. What it did do, however, was highlight the existence of an active nationalist element among PASOK followers and the Greek bureaucracy unable and unwilling to follow orders from the Greek government. The event seems to be catalytic for the change in the foreign policy direction of Greece toward Turkey. According to Gundogdu, “The elimination of the hardliners gave a strong hand to the moderates of the ruling PASOK party who favored rethinking Greek-Turkish relations and avoiding crises in order to ensure Greece’s further integration to the EU” (Gundogdu 2001). Quickly after that, two devastating earthquakes rocked Athens and Istanbul, providing a premise for engagement through humanitarian relief by both countries to

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each other. This time the media played a constructive role, by highlighting the efforts of rescue teams from Greece and Turkey to save people trapped in the rubble, thus actually illustrating the truth to President Clinton’s claim that both countries have more in common than not. The then moderate and pragmatic foreign minister of Greece, currently the leader of the opposition and president of PASOK, George Papandreou, initiated talks that have led Greece to suspend its objections to Turkey’s accession to the European Union. The foreign policy of Greece has developed from conditional sanctions, to conditional rewards (Couloumbis 2003, 36), and to complete support for the Turkish EU membership, because of the perception that it will ultimately be in Greece’s interest.30 Although the changing attitudes toward Turkey have not yet permitted the settlement of disputes, domestic issue polarization in Greek-Turkish relations has clearly diminished and public sympathy is clearly high. The Greek public and its representatives are far more preoccupied with Greece’s economic challenges than with traditional foreign policy concerns (Loulis 1995, Kathimerini 2006). This shift in the priorities of the political class and the public was facilitated by the earthquake diplomacy. Evidently, decreased domestic issue polarization resulting from changed international circumstances has provided greater space within which Greek politicians could maneuver. The consequences of the earthquake diplomacy, Cyprus membership in the EU, Turkish EU accession talks, and a willing political and societal coalition in Greece may well result in a continuation of this rapprochement, in defiance of the views of pessimists that abound. Current Foreign Policy Issues Greece has a number of issues that the country is currently working on. However, no issue can be characterized as a “crisis” or an urgent matter demanding immediate attention. Processes have replaced both the domestic interest groups and the international interests when it comes to foreign policy. The best examples are the stalled process of renaming the Former Yugoslav Republic of Macedonia (FYROM), the Greek-Turkish relations, and the participation of Greece in the War on Terror. Renaming Greece’s northern neighbor, for many European and international observers, seems to be a bit of a Quixotic quest on behalf of Greece. Time works against the EU member since most major countries have recognized Greece’s northern neighbor as “Macedonia,” and it looks like Greece is currently facing an international fait accompli. Instead of repeating the serious nationalistic displays of the early 1990s, Greek diplomats led by current foreign minister Dora Bakoyianni retain the conditional sanctions approach (Couloumbis 2003) and enjoy the support of the opposition parties. It is

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evident to many observers that the Greek elites were able to agree on the diplomatic road to be taken and avoid the divisions of the past. Nationalist groups, including a large following in the Orthodox Church led by the Metropolitan of Thessaloniki (capital of the Greek Province of Macedonia), still operate, but they seem unable to sway public opinion and political elites in the country.31 The leaking of the proposal recommending the name of FYROM by the Greek foreign ministry produced some debate, and a round of attention was given by the press, but in no way was this climate reminiscent of the climate in the early 1990s. Along the same lines, and with very much the same results, the first state visit of a Greek prime minister to Turkey in the past fifty years took place. Nationalist groups criticized Prime Minister Karamanlis, especially for paying his respects to Turkey’s founding father, Mustapha Kemal, given the atrocities the Greeks suffered under his rule, but nonetheless the visit was uneventful. Foreign Minister Dora Bakoyianni followed the prime minister’s visit soon after that with a visit of her own and discussions in Ankara. The political periodical ANTI published an article after the Greek elections of 2007 arguing that the Greek nationalists have been quietly making inroads in society, but it seems that even though they are represented for the first time since 1974 in the Greek parliament, they are there because the conservative party moved toward the center and because of the general dissatisfaction of the public with the conduct of two large political parties rather than any foreign policy decisions as in the past.32 Depending on the timing of the next election, the newly reorganized and highly energetic leftist coalition SYRIZA might impress everyone with its performance (as predicted by recent public opinion polls). While this does not mean that the Greeks are finally going communist, it reflects the rather sorry state of affairs in the socialist party and also the general dissatisfaction with politics in Greece. Recent foreign policy issues have by no means dominated the agenda even when issues such as the mediation efforts with FYROM seem to assert themselves over the domestic politics and personalities. Conclusion On the face of it, Greek foreign policy has Europeanized, and as such the Greek paradox seems rather exaggerated. The Greek foreign policy paradox in particular may seem exaggerated when one follows Jorgensen’s analysis of the Europeanization process of a EU member state’s foreign policy (Jorgensen 2004). First, the Greeks have adapted to the new environment, as shown in many studies mentioned throughout the chapter. Their diplomatic style became milder (Tsardanidis and Stavridis, 2005) and more

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conciliatory. Greek foreign policy, however, changed in its substance as well. Bilateral issues, such as the naming of FYROM and Cyprus, became multilateral, or, simply put, European. This was no accident of location; it was done by design. Through multiple strategies, sometimes well thought out and at other times quite ad hoc, the Greeks have transformed the issues in their surroundings in the Balkan Peninsula and Turkey into a EU problem. Second, not only have the Greeks changed their style toward their northern neighbor and Turkey, but they have also changed their strategy to explicitly work through the denial of the EU and NATO memberships in the case of FYROM and the carrot of the EU in the case of Turkey in order to achieve what they consider optimal foreign policy outcomes. This type of change from the national to the supranational realm of foreign policy in any given member state of the EU is called the elevation of policymaking (Jorgensen 2004). While there are still issues where states such as Greece have adjustments to make, the important element of the discussion here is that the change is substantial and that it is sustainable though some institutional and political changes. Third, the Greeks feel empowered by their membership to the European Union, as well they should. Europeanization as empowerment is a novel concept for many smaller decision-takers in the EU, more so for Greece (Jorgensen 2004, Tonra 2001). Considering the largesse of issues that Greece faced because of the changing international environment and the demands of a complex tri-level game that is additionally mediated by domestic intervening variables, such as public interest groups, identity, and culture, one can safely say that Greece did better than expected. First, it avoided the fate of the neighborhood that saw genocide, ethnic cleansing, and war return to the Balkans. For a member state of the EU with a medium-sized economy and an advanced political system, that was not hard, but the country had come close to being engulfed in modern warfare with its neighbor Turkey in 1996. Second, Greece has become a beacon of hope and a pole of stability for the neighborhood by participating in the foreign policy process of Europe in more ways than one, even as it made its own mistakes regarding FYROM. Third, the country has been able to steer its foreign policy away from the old irredentist localized concerns and toward becoming a more active member of the global community, one that may be increasingly involved in the neighbors’ civil war, such as in Albania, as much as the one far away in Central Asia, because of the American invasion and collapse of the Taliban state in Afghanistan. Greek foreign policy is, of course, mostly concerned with Southeast Europe, as it should be, but currently it does not shy away from the global challenges. Thus, Greece is approximately where one would expect it to be for a country of its size and location.

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Chapter 8

Trends and Prospects G      ,      foreseeable future the EU’s fastest growing economy. It is, however, a hidden giant considering it gets no powerful endorsements, as other growing economies did in the early 1990s.1 In fact, it receives warnings of impending doom.2 Considering the annual economic growth rates of Greece that have exceeded those of the EU for a decade now, the changes in the Greek economy are albeit slow and conflict generating, and though one would expect that Greece could be named “The Balkan Tiger,” it has not yet been. Moreover, Greek development is viewed as a cautionary tale by both Europeans and some Greeks alike. This chapter will discuss the changes in Greece in light of regional and global developments. Obviously, there are certain very positive aspects of the changes that the Greek economy and society have witnessed in the past two and a half decades, but there are also certain areas that need improvement, areas that may produce pitfalls that could return the country to its former pariah status within the EU. Finally, this chapter will propose a developmental strategy for the country, even though it is understandably risky to make predictions in the current economic and political climate. Nevertheless, it is important that certain options be discussed. Comparative Tigerhood What is a “Tiger,” and does Greece qualify as one? According to the World Bank, the original four tiger economies were Hong Kong, South Korea, Singapore, and Taiwan (The World Bank 1993). The characteristics of being a “tiger” according to the World Bank were, first and foremost, high growth rates, private domestic investment and rapidly growing human capital, high levels of domestic savings, as well as social changes such as the reduction of agriculture, urbanization, the reduction of population growth rates, and an

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Europe’s Greece: A Giant in the Making

expansion of education (The World Bank 1993, 5). The necessary elements were all economically derived, such as “sound developmental policy,” good macroeconomic performance, a strong banking system, and a labor force to sustain it (The World Bank 1993, 5). In his seminal comparative work on developing economies, Stephen Haggard analyzed development strategies and categorized what we call tiger economies into three kinds: (a) import-substituting economies, mainly Latin American countries, where the size of the country allows for import substitution and the generation of domestic industry healthy enough because of domestic demand; (b) export-led economies, mainly the Asian Tiger economies, such as S. Korea and Taiwan, led by industries focused on producing consumer products for North America and Europe; and (c) entrepôt economies, such as Hong Kong and Singapore, which lack the size to promote either large scale import substitution or even export-led growth and thus mainly focus on service and commercial activities (Haggard 1990). In order to understand the different “pathways,” Haggard analyzed the following aspects of each category’s strategies: (1) orientation, (2) instruments, (3) agents, and (4) integration. Considering that “even countries pursuing similar strategies exhibit variation” (Haggard 1990, 27), when comparing these economies to European peripheral economies, such as Ireland and Greece, one must consider not only the size of economic growth, as shown in table 8.1, but also the elements that produce it. One notable absence in Haggard’s analysis at that time was the concept of globalization, which allowed the latter two kinds of economies (export-led and entrepôt) to compete in the global markets, continue their tremendous growth, and finally establish themselves as the Asian Tiger economies. What makes tiger economies behave the way they do? External conditions, for one thing. While Haggard calls these external conditions international constraints (Haggard 1990, 29), Porter calls them demand conditions and factor conditions (Porter 1990, 71), while O’Hearn simply labels them Table 8.1 GDP per capita growth in Economic Tiger economies Years

1970–1980 1980–1989 1990–1999 2000–2008

Ireland Greece S. Korea Taiwan Singapore Hong Kong

4.2 3.2 7.0 0.5

6.0 1.04 1.85 4.2

8.7 9.2 6.2 4.3

9.7 9.0 6.3 4.0

9.0 6.9 7.6 a 5.4

9.5 8.9 4.0 5.4

EU Thailand Portugal average 2.9 2.2 1.9 ⫺0.5

6.7 6.7 5.3 2.3b

5.7 3.3 2.8 ⫺0.5

a

Numbers based on the average of 1992–1999. The numbers for Taiwan Singapore, Hong Kong, and Thailand range from 2000 to 2007 and are taken from the Bank of Taiwan.

b

Sources: Numbers compiled from D. O’Hearn, Inside the Celtic Tiger: The Irish Economy and the Asian Model, London: Pluto Press 1998, 61, and OECD economic surveys of individual countries and the Bank of Taiwan.

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“markets” (O’Hearn 1998, 7). Nevertheless, all of these explanations, even Porter’s, which is more industry oriented, include external conditions over which the domestic market or the state has no control and which in return affect the choices the country makes regarding development strategies. External conditions have to start at the condition of the global economy, especially for economies whose size does not allow for much independence on the global scene. For instance, a global recession affects all economies, but smaller economies can be variously affected, as shown from the responses of Latin American states in the 1980s, the debt crises and extreme contractions, or the smaller European economies, which had to fundamentally reorganize (Katzenstein 1985). External conditions may not only be economic, such as the Great Depression or the oil crises of 1973–1974, but could be explicitly political, such as the advent of Fascism in Europe, World War II, or the cold war, or even combine economic and political elements, such as the policies of “military Keynesianism” (Kiely 2007, 63). The major external conditions that all smaller countries had to face, no matter their economic condition in the past twenty years, were due to the changing nature of the economic hegemony of the United States (Kiely 2007) as well as the changing nature of the political landscape of the world. While the debate over whether the global hegemony of the United States remains or is in decline is still ongoing,3 the conflicts over territorial disputes, collapsing states, ethnic and tribal identity, and now terrorism continue with increased intensity, and only one state seems to remain dominant in these turbulent times, the United States. Although the United States is experiencing some turbulence of its own, its political and military might cannot be questioned, even though its economy can be. For small states in the global marketplace, the United States has become a point of reference despite its economic woes since the 1970s. In particular, both the Asian Tigers and the Celtic Tiger, as Ireland is often called, are intricately linked to the US economy via trade and Foreign Direct Investment (FDI), which makes their relationship not only economic but explicitly political as well. Finally, the main difference between the Latin American countries and Asian tigers regarding the US role was ideology; whereas in Latin America the US involvement was fiercely resisted, in Asia it was not, and the relationship shapes their “tigerhood.” Domestic constraints have also shaped the “pathways” to becoming a global tiger. Demographic changes such as the weakening of the agricultural sector, urbanization, and higher education levels drive the new successful economies of the periphery. Labor, the most significant element in industrializing countries, was either strong, and thus affected the pathway toward Import-Substituting Industrialization (ISI), or weak and/or repressed, and thus influenced the pathway toward export-growth or entrepôt economies (Haggard 1990, 37). All Asian tigers had a very active state, more so than

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Europe’s Greece: A Giant in the Making

was the case for the Celtic Tiger, as we will discuss in the next section. For instance, in the case of South Korea, Thailand, and Indonesia, the state actively intervened at both macro and micro levels and in addition kept veto players such as labor in check and mediated between domestic and foreign capital (Haggard 1990, 40–46). The state was free to pursue the policies it regarded as beneficial to the country in most Asian cases because of its tight hierarchy, the cohesiveness of the decision-making structure, and its ability to control other actors that would affect the economy. To put it lightly, the Asian tigers had an uncharacteristically autonomous state (Haggard 1990). Not all tigers, however, have this particularly strong and independent, sometimes outright authoritarian, tradition that Korea or Taiwan had, and instead had a liberal state derived from the Anglo-Saxon tradition. In the case of Hong Kong, Singapore, and Ireland, the state was able to “influence” decisions, but by no means has the state directed the economy. This is not the case for what came to be known as “Japan INC” in the 1980s when seminal studies on Japanese politics explained how closely the state was involved in determining the outcomes in the economy through the Ministry of International Trade and Industry (MITI).4 Beyond the Institutional structure and historical legacy, if not path dependency, that these states faced in coming to the decision to pursue a state-led developmental plan lies the capacity that each state has to pursue such developmental plans, which will most definitely affect the outcome. State capacity, therefore, is a crucial domestic factor in explaining the path to achieving tiger status. Atul Kohli separates states into three different types: (a) the neo-patrimonial, (b) the cohesive-capitalist, and (c) the fragmented-multiclass (Kohli 2004, 9). The neo-patrimonial state, which are usually much less developed than their counterparts, have distinctly little capacity for carrying out developmental plans, and when they attempt to do so they usually fail. On the other hand, cohesive-capitalist states, of which the best examples may be the Asian Tigers, are quite the opposite in that respect (Kohli 2004). The states that have a mixed record are those of the fragmented-multiclass type, which are highly diversified modern states in which the state cannot dominate the process even if it has the capacity to direct the economy, and one could only guess that Kohli would put Ireland and Greece in that category. Although these are fairly ideal constructions, they are useful in highlighting the impact of state capacity upon the success of whatever developmental plans the state may have. Finally, the last element in explaining the behavior of states regarding developmentalist plans is ideas; that is, the transmission, adaptation, and articulation of developmentalist ideas. Haggard notes, “State autonomy may explain the capacity to formulate and execute an economic program, but it does not answer the nagging question of where state interests come from.”5

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In Haggard’s argument, ideas are key to understanding coherence or, as he calls it, integration (Haggard 1990). Ideas can be global, and the area of development economics is an important one regarding the dissemination and articulation of such ideas. It seems natural nowadays to talk of abandoning the “old” Import-Substituting Industrialization (ISI) favored in the 1950s and 1960s in favor of export-oriented one (Mead and Schwenniger 2003), which became the ideological bedrock for the incredible growth of the Asian Tigers and the Celtic Tiger. It also seems natural to now question export-oriented industrialization, especially on the grounds of the tradeoffs between the economy and society and the seeming dependency on foreign capital. After the collapse of the Asian markets in 1997, people seriously questioned the worthiness of the Asian Tiger model, considering the vulnerability that was revealed during the days after the bank of Thailand collapsed. As the debate between neoliberal economists and their detractors continue, states are called upon to make policy choices that will affect their global standing and their domestic economies. In the case of fragmented-multiclass states, they have to be especially mindful of the articulation of ideas from all camps, considering not only that their autonomy is more restricted compared to the other types of states, but also mindful that economic development policy is one among many policies the state has to follow.6 Evidence that the debate involves more than your average elite economists (or the so-called ivory tower professors) was given in Seattle in a massive, and by American standards unusually violent, protest against the World Trade Organization in 1999, which was followed up with protests and deaths in Genoa on July 21 and 22 of 2001.7 Ideology seems to drive the global antiglobalization movement even at this ad hoc stage, which includes groups opposed to neoliberal policies, the global War on Terror, and the power of multinationals around the world, to mention just a few.8 These very visible objections to the modern capitalist system have played out as much in Europe as in the rest of the world, and since the European member states are liberal democracies, such ideas are bound to have an impact on the behavior of certain classes, such as the agricultural sector in France, Greece, and so on, who may become vocally opposed to the implementation of such policies. Thus, the critics of the system tend to dismiss the ability of the country to sustain high levels of growth or question the impact of society and, as such, the Celtic Tiger has been reviewed with a critical eye (O’ Hearn 1998). The Celtic Tiger Model Ireland had a decade of unprecedented growth in the 1990s and became the envy of many nations around the world for its development, which now

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Europe’s Greece: A Giant in the Making

places the island as “the richest non-oil country in the world apart from some financial hubs.”9 The orientation of the economy, to use Haggard’s typology, heavily influenced by the British intellectual tradition of liberalism, is export-oriented. This is not to argue that it has always been exportoriented; in fact, the public discourse over the change in Irish politics was fierce and included a bloody civil war. The impact of the civil war cannot be understated because it plunged Ireland into subsequent periods of nationalism, fierce violence (because of the situation in the North, sentiments in the Republic were affected), and economic protectionism. Joining the EU in 1973, Ireland was the poorest member of the European Economic Community at that time. Within twenty years of joining, Ireland was the fastest growing member state, and within thirty years it was the second richest country after Luxemburg. What’s there not to like in this growth rate? The New York Times’ self-styled globalization Guru, Thomas Friedman, described Ireland’s advice to would-be Irish model replicators as follows: “make high school and college education free; make your corporate taxes low, simple, transparent; actively seek out global companies; open your economy to competition; speak English; keep your fiscal house in order; and built a consensus around the whole package with labor management— then hang in there, because there will be bumps in the road—and you too, can become one of the richest countries in Europe.”10 If it were that easy, however, there are some serious suggestions here regarding instruments. For Ireland to be successful in its quest for growth and prosperity it had to have the necessary instruments and agents to implement policies favorable to this orientation: agents such as the Industrial Development Agency (IDA), which is as famous in Ireland as MITI is in JAPAN, because it claims to have engineered the Irish miracle. Beyond the IDA, there is a network of other institutions created by the Irish government whose specific purpose was to promote economic development, both regional and countrywide, such as Enterprise Ireland, Forfas, SFADCo (otherwise known as “Shannon Development”), and Udaras na Gaelthachta. Yet, these agencies, some of which were established right after World War II, were not successful until the 1990s, so either it takes a very long time to work out an economic development plan or other factors may affect the outcome as well. Instruments such as good fiscal policy, low taxation, and an educated yet unemployed work force could very well be the reasons so many foreign companies flocked to Ireland in the 1990s, making it the busiest economy in the world.11 However, there are those who call Ireland the “Irish Kitten” and argue that the Irish economy is not as strong as the numbers may indicate, thus providing other countries with an argument against the export-oriented foreign FDI-dominated globalized economy.12 Could it be that an economy such as Ireland is a paper tiger? As far as criticism of Multinational Corporation

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investments goes, Ireland is not different than other nations. MNC’s that populated the country after its admission to the EU benefited from the orientation, the agents, and the instruments that the country had to offer without risking much. O’Hearn argues that “Southern Ireland’s development strategy has benefited external regions and classes much more than the Irish economy” (O’Hearn 1998, 57). It is a standard criticism of the MNC modus operandi that they dominate an economy, drown out domestic competition, create a dependency, and provide little in terms of high-skilled employment. In the case of Ireland, MNCs account for more than two-thirds of nonfood exports while a single computer company (Dell) accounts for 1 percent of the national GDP.13 O’Hearn notes that the reason Ireland is a kitten instead of a tiger is that it did not follow the Asian Tiger model, which is that the state promotes domestically dominated investment in sectors that produce export-oriented growth in the economy. The Irish economy is dominated by foreign direct investment by design. The Irish authorities, as is evident from the multitudes of statements about the Irish miracle, gambled on mainly two industries, pharmaceuticals and consumer electronics, and attracted as much investment, exclusively from the United States, as possible. This created a tremendous dependency upon the United States and its MNCs; but it is also true that the ties to the United States are far more than economic, as they are also cultural and linguistic. Criticism of the Irish model aside, Ireland seems to have leveled off its tremendous growth rates, and, moreover, it seems to enjoy the economic benefits of its miracle without unwanted side-effects, which cannot be said for the Asian Tigers. The Asian Tigers have suffered greatly after 1997, while Ireland is firmly positioned among the big economies of the world. Therefore, one could make an exact counterargument to O’Hearn’s, which is that the MNCs are a fine way to grow an economy and be a “tiger” provided that you are part of the European Union. At the end of the day, it seems that the EU is the major institutional structure that makes the Celtic Tiger a better investment for their American cousins. The European cultural sphere, coupled with the stability of belonging to the world’s biggest economic zone, makes investments safe, so when there is global crises, investors do not worry as much as they do when they are dealing with non-EU economies, which in fact is what happened to Russia and Brazil in the aftermath of the collapse of the Thai banks in 1996–1997. Although the nature of the global crisis in 1997 was much more complicated and country specific, the fact remains that a small foreign investment economy in the periphery of Europe is unaffected by it while large economies such as Brazil and Russia were brought to their knees even in the absence of any indication that there was something fundamentally wrong with them. Europe makes it safe for small dependent

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Europe’s Greece: A Giant in the Making

economies to globalize, and that is something that the critics of the Irish model have not taken into account. The East European Cubs As the Irish economy started leveling off, a new wave of EU integration was completed. Ten new members were added to the European Union: the three Baltic states (Latvia, Lithuania, and Estonia), Poland, Czech and Slovak republics, Hungary, Slovenia, Cyprus, and Malta, which were followed shortly after that by Bulgaria and Romania. The largest expansion in the history of the EU also saw several of the candidate countries growing at breakneck speed (see table 8.2). What stands out is the quick change from communist state-controlled to capitalist market-oriented economies, changes that took place irrespective of the future membership of these countries in the EU. Their solid economic performance improved when they decided to apply for EU membership and continued until the accession talks were complete. It does not take an economic genius to theorize that the prospect of EU membership, economic fundamentals such as low wages and low taxation, as well as the location of these countries helped them grow quickly. Once again the title of “tiger” is awarded to a small economy. Only this time, two different publications The Economist and The Wall Street Journal awarded the distinction to neighboring countries, Lithuania and Estonia, for the same reasons: tremendous growth rates and obedience to economic liberalism. In fact, The Wall Street Journal’s article is about giving the Table 8.2

Growth rates in new member states of the EU 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Bulgaria 4 2.3 Czech Rep. ⫺0.8 2.3 Estonia 5.4 ⫺0.1 Cyprus 5.0 4.8 Latvia 4.7 3.3 Lithuania 7.5 ⫺1.5 Hungary 4.9 4.2 Malta – – Poland 5.0 4.5 Romania – ⫺1.2 Slovenia 3.6 5.3 Slovakia 4.4 0 EU27 2.9 3.0

5.4 3.6 9.6 5.0 6.9 4.1 5.2 – 4.3 2.1 4.1 1.4 3.9

4.1 2.5 7.7 4.0 8 6.6 4.1 ⫺1.6 1.2 5.7 3.1 3.4 2.0

4.5 5.0 1.9 3.6 8.0 7.2 2.1 1.9 6.5 7.2 6.9 10.3 4.4 4.2 2.6 ⫺0.3 1.4 3.9 5.1 5.2 3.7 2.8 4.8 4.8 1.2 1.3

6.6 4.5 8.3 4.2 8.7 7.3 4.8 0.2 5.3 8.5 4.4 5.2 2.5

6.2 6.3 6.2 6.4 6.4 6.5 10.2 11.2 7.1 3.9 4.0 4.4 10.6 12.2 10.3 7.9 7.7 8.8 4.1 3.9 1.3 3.4 3.4 3.8 3.6 6.2 6.5 4.2 7.9 6.0 4.1 5.7 6.1 6.6 8.5 10.4 1.9 3.1 2.9

5.8 4.7 2.7 3.7 3.8 6.1 1.9 2.6 5.3 6.2 4.2 7.0 2.0

5.6 5.0 4.3 3.7 2.5 3.7 3.2 2.5 5.0 5.1 3.8 6.2 1.8

Source: Eurostat, Real GDP Growth Rate table, available at http://epp.eurostat.ec.europa.eu/portal/page?_ pageid=1996,39140985&_dad=portal&_schema=PORTAL&screen=detailref&language=en&product= STRIND_ECOBAC&root=STRIND_ECOBAC/ecobac/eb012

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CATO Institute’s biennial Milton Friedman Prize for Advancing Liberty to Prime Minister Mart Van Laar of Estonia.14 It is hard to miss the ideological connection here, yet later on The Economist would claim that “the pair’s (Lithuania and Estonia) growth is an exceptional product of good luck and good policies.” One can do little about good luck, but the term good policies, one would argue, really means a liberal policy orientation, determined agents, and strong instruments, such as a proactive FDI strategy in order to grow the economy. Marek Tiits argues that the best way to grow the knowledge intensity of the economy and avoid dying from “Dutch Disease” is to attract FDI and invest in R and D.15 In Tiits’ mind, a small peripheral economy can be prepared for the ups and downs of the global market when it uses FDI not only as a means of increasing employment and wealth but as a means for technology transfer coupled with efficiently coordinated public policy and a strong effort to modernize the labor supply by providing lifelong learning opportunities (Tiits 2007). Such a strategy would enhance the ability of small states to identify the particular sectors of the economy that will produce opportunities for economic growth as well as a qualitative improvement in the labor ranks that will be part of these sectors. It seems that the economic development in the Baltic States is only partially a response to liberalization and the transformation of these countries into liberal economies after a long history of communist command-style economics. In fact the majority of corporations invested in Estonia in an effort to expand in the regional market (Tiits 2007, 332). Location may be the code word for good luck when it comes to the Baltic States because they are part of the European Union; they have liberalized, and they have relations and access to the larger region. Nevertheless, a combination of liberalization and new market opportunities has fueled the tremendous economic growth in that part of the EU. The Greek Chameleon Greece does not compare to Ireland or the Baltic states in terms of economic growth, nor does it compare in terms of geographic/demographic characteristics or historical experiences, yet it is another growing economy in the European periphery. As noted earlier in this chapter, when one speaks of East Asian economic miracles, “gianthood” or “tigerhood” can be a doubleedged sword because it opens up the economy and benefits the well placed, but it also can hurt the poor and leave a country open to the volatile mood swings of the global capitalist system. Most people do not miss the lessons learned from the Asian Tiger economies, but is it the same when it comes to European economies? It seems that when a policy of attracting foreign direct investment (which could lead to claims of tigerhood) is done right,

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Europe’s Greece: A Giant in the Making

50 45 40 35 30 25 20 15 10 5 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Graph 8.1 World competitiveness ranking of Greece, 1993–2006. Source: Ministry of Development, Annual Competitiveness Report, 2006.

and presumably one would argue that Ireland is doing it right, it has great benefits for the state in which it is undertaken. Yet, even if it is successful in the case of Ireland and the Baltic countries, is it the same when it comes to Greece? The simple answer is “no,” but with qualifications. As shown in chapter 6, the Greek economy is outperforming the EU average and its per capita GDP is converging with that of the EU, yet at the same time its global competitiveness is not improving. Looking at the annual competitiveness reports from 1993 to 2006, we see the following trend (see graph 8.1): It seems that these indicators are consistent with what was called the industrial paradox in chapter 6, and they seem to generally agree with the idea that although the Greek economy is doing well there is much to be done in terms of structural reforms in order to propel Greece economically forward into the club of the strong European economies. Thus, the analysis of the Greek economy is divided into bad news, good news, and the trends that exist today, all of which will be considered separately. The Bad News Despite declarations to the contrary by politicians in both the dominant political parties, Greece has fared poorly in adapting to the Lisbon Agenda (Fetharstone 2008). Looking at the Lisbon Agenda numbers in graph 8.2, we see that Greece occupies the last position in its implementation: The bad news is not that Greece has achieved zero targets, considering that it is hard for even very strong economies to transcend path-dependent features of the economy, such as women’s employment levels or availability of child-care, but what this could indicate of the ability of the country to turn the situation around, especially when considering basic elements of development strategy such as instruments, agents, or integration of policies. First, the most difficult aspect of Greek politics as they interact with the economy is the ability to transfer the willingness to change policy paths into

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Trends and Prospects 14

12 12 9

10 8

7

7

6 5

6

4 3

4 2

2 1

1

1

1

1

1

2

2

2

2

3

5

5

4

3

2

1

0

0 Greece

Hungary

Poland

Latvia

Germany

Portugal

UK

Graph 8.2 Lisbon agenda: Number of targets attained (out of 17). Source: Ministry of Development, Annual Competitiveness Report, 2006.

action. This has been the most recent area of research among many wellknown scholars who are trying to explain the lack of structural reforms in Greece.16 Structural issues are affected by both agents and ideology. Greece made the choice to become a liberal economy long ago (Botzakis 2006), even as the government became heavily invested in the promotion of industry (Martis 1990) so much that Featherstone today categorizes the economy in the area of Mixed Market Economy (MME).17 According to Featherstone, “The inability to sustain social concentration is at the heart of the problem” (Featherstone 2008, 26), and in an earlier work he called Greece “Une Société Bloque.”18 Nevertheless, the major political elites do agree on the underlining ideology of liberal market reform, even as they disagree on how changes should be made and which party should be the one to undertake them. Second, not all agents agree with the available options for the Greek economy, thus increasing the veto points in societal and political discourse. As mentioned already in chapters 3 and 6, both parties have internal sections of dissent that have been able to coordinate with societal sectors, such as students and university professor unions, to derail major government initiatives, in this case the university reforms. In the current governing party, dissent is smaller than in the opposition because of the result of the last election that gave much of the opposition in the conservative party a home in the parliament in the form of the right-wing LAOS. However, since there is battle of succession within the opposition, the opposition to the liberalization of the economy is much louder and the split between the two sides much deeper. As for the leftist political parties who have participated in the Greek parliament and seem—at least in the case of SYRIZA—to be on the upswing, they appear to be the normal opposition to both the globalization/liberalization forces as well as to furthering Europeanization if that affects the social character of the state in Greece. In addition to political elites, unions, which traditionally have been strong opponents of moves to further liberalize the

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Europe’s Greece: A Giant in the Making

economy, argue that because of the changes already undertaken, the price of the unit of labor has fallen by 25 percent in the past twenty-five years, and yet the competitive edge of Greece has not improved.19 Also, as long as the reforms threaten to reduce the size of public welfare or other support mechanisms, the number of potential veto players in public discourse will proliferate. Third, and quite probably most important in its effect on future developmental plans in Greece, are the instruments available to force structural changes and implement a different set of developmental policies. Considering that monetary policy is now outside the realm of the Greek government policymaking due to Greece’s membership in the Eurozone, the instruments available shrink to using fiscal policy alone. The problem is compounded when one considers the veto points produced at each turn of the budgetary process in the Greek parliament. One example would be the much-needed increase in research and development (R & D) to promote the growth of high quality employment in the country as well as to foster Greece’s entrance into the knowledge-based economy (Karagiannis 2007). Once the available instrument is fiscal policy, and considering the pressures of the Maastricht criteria, the only way for a government to increase spending on R and D would be either to cut the budget in other areas or to generate some additional income, most likely through the sale of public owned corporations. Consequently, the choice that the government faces is a dire one: cut spending in a given area and face the wrath of the public segment affected by the budgetary change; or sell a public owned corporation and face long and often violent opposition by the labor unions. Although the example above is rather simplified, it is enough to illustrate the boundaries within which the current and future Greek governments will have to operate while attempting to increase economic growth, employment, and meet social obligations. Finally, until the turn of the century, the integration of strategies and coordination of policies was rather haphazard as well as badly conceived and executed. This observation is supported by a vast array of literature on Greek public policy. Corruption and mismanagement is part of the way people describe Greece.20 Rent-seeking behavior is the chief cause of failed market reforms in many countries, among them the United States,21 with political implications that can be far-reaching, as in the case of the Koskotas trial in Greece, which reached the highest level of government, or the case of Bertie Ahern, former Taoiseach (Prime Minister), the longest serving and quite popular leader of Ireland, who resigned amid corruption allegations in 2008.22 In fact, Greece ranks quite low on Transparency International’s list of countries ranked by amount of corruption, with about a quarter of the Greek population having paid a bribe to get things done and approximately

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Trends and Prospects

60 percent indicating that they expect their government will be ineffective in the fight against corruption.23 Besides the negative impact of rent-seeking behavior of all kinds upon Greek public policy, the effectiveness of coordination also depends on the staff, their expertise, and their ability to retrain. Staffing in the 1980s was done with a political/moral goal in mind, to right the past wrongs of conservative governments. This type of hiring of civil servants is hardly conducive to a civil service that is forward-looking or able to meet the challenges of the future, especially when considering the fact that it is virtually impossible to get fired. Integration of public policies in Greece thus has not been particularly effective. The Good News The overall good news for Greece is the shape of the economy, which is strong, however dependent on the European Union and domestic consumption this strength is. One cannot stress the importance of closing the gap between the EU average and Greece regarding GDP per capita, even if Greece still remains below that number because of the political considerations already discussed. Between 1995 and 2003, Greece gained about 8 percent in per capita income, going from 65.1 percent of the EU (with only fifteen member states) average to 73.5 percent (Sabethai 2006, 261). More recent numbers from the Eurostat, in table 8.3, reveal the following pattern for Greece and a select group of countries: GDP per capita has risen faster in Greece than in other Eurozone countries, with the exception of the Baltic Tigers, and faster than the EU as a whole, with the exception of Ireland since 1995. Greece added a total of 32.8 percentage points, vis-à-vis the EU as whole, within a decade. Considering the changes in political climate and the evolutionary trajectory of Greek politics, one can safely argue that the country has done well in the second half of its membership in the EU, something not totally unexpected. Table 8.3

GDP per capita in selected EU members

Country

2000

2001

2002

2003

2004

2005

2006

2007

Ireland Greece Spain Italy Portugal Bulgaria Slovenia Estonia Eurozone EU 27

131.0 84.3 97.6 117.2 78.2 27.9 78.8 44.7 115.3 100

132.9 86.7 98.4 118.1 77.5 29.3 78.9 46.2 113.8 100

138.3 91.0 100.7 112.2 77.2 31.1 81.2 50.0 112.9 100

140.8 92.2 101.2 111.0 76.9 32.6 82.3 54.5 112.1 100

141.8 93.9 102.2 106.9 74.7 33.8 85.3 56.9 110.9 100

143.7 97.3 102.9 105.1 75.4 35.3 86.8 62.9 110.9 100

145.5 98.6 105.0 103.3 74.5 36.7 87.8 68.4 110.4 100

146.7 97.9 104.7 101.9 74.0 38.1 90.6 71.7 109.5 100

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A country that has a history of emigration of Greeks to other countries is now encouraging immigrants to employ for jobs that the average Greek will not accept.24 However, a fuller picture can be developed by studying at the elements of success. First, in terms of ideas and ideology, one could claim that the “End of history” is true in Greece. Some commentators, as well as Fukuyama himself, argue that this is true throughout Europe, considering the dominance of right-leaning liberal parties and the transformation of the traditional left.25 This transformation of economic thought in particular is extremely important, considering the political upheavals and transformation the country underwent. Greece became a member of the EU because of the political considerations of its then conservative leader, and was quickly transformed into an outlier by a socialist leader whose ideological proclivities were to oppose North European or Western imperialism. Nonetheless, in the context of Greece’s transformation to a fully democratic society, this was the only road to be taken, as was the case with the other third-wave democracies, Portugal and Spain. The permanently excluded societal groups, the former ideological pariahs, had to be included so the country could run its democratic course; there is nothing surprising about that. The end result, however, is the fact that Greece is conforming to the trends in the wider European continent, and this speaks volumes of the level of maturity Greek democracy has reached, despite the fact that it could be better. In this context, the agreement of Greece’s accession to the Eurozone becomes all the more important because it marks a turnaround in socialist behavior in a country where socialism had been a radical force of change. Current Greek elites agree on the direction of the country even as they disagree on the specific policies to be employed. The public has moved away from the ideological/foreign policy issues that plagued postwar Greece, to the more mundane economic everyday life and leisure issues. As this transformation happened, the instruments (second factor) with which each Greek government worked changed as well. Monetary policy aside, since the inclusion to the Eurozone takes this policy away from member states, Greece had to utilize different instruments to achieve European economic convergence. Fiscal policy became so much more important that both socialists and conservatives started paying better attention to it (Sabethai 2006), and a political argument broke out over who could do a better job at keeping accurate accounts between the socialists and the conservatives when the latter came to power and sought to revise the national accounts produced by the EU. This was to the detriment of Greece, but it signified the commitment to accurate accounting and change to which the socialists, now the defamed party, also profess dedication. Moreover, the restructuring of the Greek economy and the state is commonly seen as the vehicle to success by both parties, albeit with different

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polices. As liberalization of markets became more and more acceptable, Greece embarked, according to Landy et al., on the further liberalization of several sectors of the economy such as banking, telecommunications, and, more recently, energy and transportation. These changes produced the economic and societal growth that I have documented throughout this book and Greece achieved a moderate reduction in unemployment. Third, the relationships, composition, and interaction between agents in Greece have changed due to membership in the European Union, but more specifically due to Greece’s commitment to become a Eurozone member. As the previous governments of Greece realized that membership to the Eurozone was a one-way street, they had to conform to stricter macroeconomic and fiscal policies. They started opening up the economy and fought off, although not always successfully, demands from traditionally powerful interest groups for protection, such as the farmers groups and the employees unions of publicly owned enterprises. The conservative government (New Democracy) continued the trend and was able to defeat the labor unions when it came to pension reform, although its plan was not a radical transformation of what seems to be an economic disaster waiting to happen, but New Democracy was defeated in its efforts to pass legislation on university reform. Nonetheless, the determined conservative government is reportedly ready to wage war on the education reform front once again.26 Considering the weak state of the Greek government’s parliamentary majority, early commentators thought that it might avoid the tough issues and move for new elections sooner than later in the hope that it would achieve a better parliamentary representation. It seems, however, that certain issues are going to be determined in this government’s tenure despite its parliamentary position, which leads one to believe that the government believes its position is significantly more powerful than that of the opposing societal interest groups. Finally, the last element of policy integration is still the weakest point in Greece’s transformation in the past twenty-five years of EU membership. In this area there is a significant lag time in change as the Greek state has sunk costs in the employment of a whole generation of people hired not because of expertise but for various political reasons, which the country needs to work out. In 2003, as it was becoming evident that PASOK was going to lose its parliamentary majority to New Democracy, a government employee in charge of planning who was appointed by PASOK told me that he did not believe that New Democracy can bring change for the simple reason that they lack the trained cadre, having been out of power for so long. For the same reasons, PASOK’s first two terms produced ad hoc bureaucratic machinery with no coordination and vision of the future. However, in the post-Papandreou era PASOK was able to turn it around, albeit with some prodding from the EU or even because of it. The inability

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of the Greek government to produce policy integration was characterized as the existence of “tangential irresponsibility” in the days after the huge environmental destruction on the summer of 2007.27 However, the quantification of the Lisbon targets produced a more hopeful picture since there are positive movement in several areas, except the one I discussed earlier (Per capita GDP), such as labor productivity, employment, the level of education of young people, business investments, comparative price levels, and greenhouse emissions.28 For Greece to achieve “tigerhood” status, more needs to be done than simply growing at faster rates than the rest of the EU. The Delta Model of EU Economic Development29 Given the analysis of the Greek politics and economics, its membership in the EU and the changes that membership has entailed, one could argue that, according to the traditional models of socioeconomic development theory (i.e., Modernization, Dependency, World Systems, and even the more dynamic neoliberal export-oriented industrialization), the most Greece can hope for is to be a semi-successful entrepôt economy. The reason that Greece could only be semi-successful is that it is much larger than the traditional entrepôt economies of Hong Kong and Singapore and thus it would be economically bifurcated, with some areas such as Athens highly developed and other areas living by means of subsidy. In addition, this is a strategy that will be consciously courted by the state as such, having knowledge of the repercussions. The reason this is the case is that Greece lacks some of the fundamentals in order to develop either an ISI or an export-oriented economy, such as capital or foreign direct investment, the market size, and the technical expertise and innovation. However, as noted regarding both identity and foreign policy issues, after its membership in the European Union, Greece is operating in the spatial plane between regional (Europe) and global (non-EU world), and as such it could conceivably utilize whatever comparative advantages it has to make a further step toward faster development. Understandably, there is no escaping the neoliberal implications of such a model, nor do I believe that the Greek elites, as shown in chapter 6 and noted several times in this chapter, have any wish to consider another type. It is important, however, to note that historically there have been other ideas that dominated Greek capitalism, such as dependency and state-led development. As the interaction at the levels in which Greece forms a part are getting thicker, regionalization as an economic model with the EU, ASEAN, and even MERCOSUR and NAFTA, the extensive growth of Global Production Networks (GPN), and the questionable performance of the global hegemon, the United States, challenged by newly perceived global powers such as China, a “national” strategy of development may seem a bit outdated. All theories of national

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development and paradigms of national capitalisms become perforated by capital movements and influenced by neoliberal thrusts of globalization agencies, such as the World Trade Organization (WTO), the International Monetary Fund (IMF), and Transnational corporations (TNCs), so that there is not a single “national” strategy that could be sufficiently successful. In this context, the Irish miracle cannot be repeated, not even by Ireland. There are, however, elements that could be used to devise policies, taking into consideration regional and global conditions, which can lead to an innovative model for transforming a medium size economy such as Greece into a global player to be compared with other EU partners such as Ireland and Scandinavian member states. Looking at the multidimensional space that encapsulates Greece and the available economic strategies, one may conclude that regionalization through the global production networks offers a new opening in which they can evaluate their development strategy and create plans for innovative policies leading to new “competences,” “clusters,” and EU-integrated growth. Much of these developmental stratagems will depend on seven factors. First, geographic location, which can be underestimated, considering the previous history of EU expansion as it relates to economic development. Location shapes the strategic choices a country has to make regarding markets and products. Until very recently, location was to the detriment of Greece, considering it was the only member state not bordering the EU proper, which proved to be continuously problematic in terms of the relationships that Greece forged with its neighbors along with diverting significant resources from domestic uses toward defense and foreign policy. Looking at the waves of expansion of the EU, the first wave, which included Ireland, the UK, and Denmark, became an intricate part of the Irish miracle, foreign capital had to stop in Dublin on its way to Berlin. Location is important to define a country as a gateway to the EU. Thirty years later, as the EU expanded again, foreign and domestic capital flocked to the other end of the continent in order to take advantage not only of the tiny markets of Lithuania and Estonia, but also to establish the gateway to Eastern Europe from Poland to the Urals. Second, the timing of strategy is important. The example of Ireland is highly illuminating in this respect. Structural changes, especially the terms to attract FDI, were set early and before the island nation’s accession to the EU, but this did not come to fruition until Greece was an established member of the EU with an educated and cheap labor force willing to work with foreign capital in the early to mid-1990s. Third, the level of development compared to the regional competition is important in determining how to compete in the global market. Obviously, the more developed a country is, the less the need to create GPNs from scratch. Looking at medium-sized

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Europe’s Greece: A Giant in the Making

countries such as Denmark, Finland, and the Netherlands, we see that GPNs have developed around a sector of the economy such as agriculture and tobacco for Denmark, petrochemicals in the Netherlands, or a single transnational corporation, such Nokia, in Finland. Fourth, existing competences and comparative advantages can help determine the sector or sectors in which a GPN can be developed in a country. In fact, the relationship of existing competences and GPNs can sometimes be fatally strong, as in the case of what is called the “Dutch disease,” which is the inverse relationship of the benefits of the exploitation of natural resources and growth of other areas in the economy, discussed earlier in this chapter.30 Fifth, structural policies, such as tax regimes, labor cost per unit of production, labor to management ratios, and incentives for FDI, could also determine the path a national economy can take. The Irish model is quite possibly the best example of this type of development move. When Intel decided to place a production unit in the country, it started the ball rolling for a long list of subcontractors and related industries that consist of what today is the IT cluster of Ireland, which, along with consumer electronics, accounts for the Irish miracle. Sixth, elite agreement on the rules of the game and innovations they introduced moved this developmental model forward. Innovation systems are important to sustain the developmental model. Finally, other sociopolitical intangibles such political stability, foreign relations, the civil society, and trust in the system are strongly related to the ability of countries to develop their economies, as was described initially in the Principles of Political Economy by John Stuart Mill in 1848 and reiterated by F. Fukuyama in his 1996 work Trust: The Social Virtues and the Creation of Prosperity. In the EU, economic development can be perceived as an isosceles triangle with an Atlanticist side, an East European Side, and a South European side, as shown in map 8.1. Development in the Atlanticist side depends heavily on the relationship of the EU with the United States. In the case of Ireland, the country’s engine of growth is FDI from the United States and the production networks that the US TNCs have set up. In the case of the Iberian Peninsula it seems to be more of a foreign policy relationship as the meeting in the Azores on May 16, 2003 reveals.31 Nonetheless, the FDI relationship is not exactly negligible, although it is not nearly as strong as the Irish-American relationship.32 On the other hand, the larger Iberian partner has clearly received much in the form of FDI from the United States; one can argue that it was part of Prime Minister Aznar’s calculations, although it seems that ideological reasons have certainly played a role. In the case of the Baltic as well as Central and East European member states, FDI flowed heavily from the EU but also from the world, because of EU membership. Initially, the majority of investment went to the large

Map 8.1 The Delta Model of economic development.

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Europe’s Greece: A Giant in the Making

CEE’s such as Poland, Czech Republic, and Hungary.33 However, the Baltics were able to break the self-reinforcing cycle of such initial investment to attract significant investment, and, for some, to transform their economies completely. As explained earlier, global capital does not only consider the internal market but also has an economic geography outlook in investment. As such, a small country like Estonia, for example, ranks very high among developed countries in the Transnationality Index of the UCTAD report on global investment.34 Clearly these “waves” of FDI and the subsequent growth of the economies that receive them are closely related to the expansion of the EU and the market opportunities created because of it. With the EU consisting of twenty-seven countries and approximately 500 million people, the internal market is the largest in the world, but with a NAFTA-like expansion in Eastern Europe, the Caucuses, and the Middle East, it could be as big as China and will most certainly dwarf its North American counterpart. As a member of the EU with close approximation to these potential markets, Greece is a prime candidate for gateway status and thus for tigerhood. How does a country with a rather small, by comparison to global levels, investment outflow to extra-EU areas become a player in the future economic decisions of the Union? There are several components to this stratagem, as explained above. First, geographical approximation can be to Greece’s benefit, and as discussed in chapter 6 it seems to be working just fine with its investment plan for the Western Balkans. Second, knowledge of the markets, cultural proximity, and established relationships (existing competences) with them could help ease global capital into these markets through the use of GPNs established in Greece. A GPN such as Dell computers and its subcontractors may be all that smaller member states with a medium-sized economy need to become part of the core of developed countries, to use the world systems analogy. It happened in Ireland with Intel and Dell computers that several years ago accounted for 1 percent of the Irish GDP.35 Of course, approximating the conditions that brought about the Irish miracle is extremely difficult, but targeting the building of a global production network based on geographic proximity and knowledge of adjacent markets is not outlandish. In addition to cultural-historical ties that Greece has with the Balkans, the Caucuses, and the Middle East, it has a significant amount of knowledge provided by immigrants from these regions, some of whom have been in the country for nearly two decades, and who can provide much needed expertise, see map 8.2. This is a self-reinforcing sequence of events with people who have successful dealings in foreign markets transferring expertise to local partners, thus decreasing the defensiveness of Greek businesses and their own expertise. Market knowledge is important and Greece is, albeit somewhat

Map 8.2 Greece’s potential global production network chain. Note: Arrow thickness represents intensity of relationship; the thicker the arrow line, the more evolved the relationship between the two countries.

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Europe’s Greece: A Giant in the Making

belatedly, already utilizing it in the Balkans and Eastern Europe. As shown in chapter 6, Greece’s traditionally domestic companies are being transformed into multinationals as we speak, and this can only be augmented through the self-reinforcing cycle. Third, Greece’s level of development is also a positive factor, considering that at least in the Balkans and the Caucuses the wealth has been used to enhance existing relationships and strengthen the country’s foothold in these regions. Fourth, political development is another reason neighboring countries could increasingly see the benefits of dealing with Greece, considering it is the strongest democracy in the region. Fifth, the timing is positive considering the expansion and process of consolidation of the EU at large while the near abroad (Russia, Ukraine, Belorussia, the Caucuses, and the Middle East) are undergoing transformations, some more painful than others, but nonetheless important ones. Sixth, structural change, according to Monastiriotis and Tsamis, is the problem with the Greek involvement in the Balkans today (Monastiriotis and Tsamis 2007). Structural policies are important when a country hopes to attract foreign direct investment, as are sound macroeconomic policies and good fiscal management. Greece could certainly do better in these areas, but it is not much worse than Estonia or Lithuania. Even if contrasting the Anglo-Saxon bureaucratic model that was partially credited for Irish development, with Greece, the cases do not vary considerably (Kalaitzidis 2004). Many more options for change become readily available once the FDI starts to affect the economy of the receiving nation. Seventh, and quite possibly the weakest link of Greece with the global capitalist system as it stands now, is “Innovation.” Innovation as a concept is linked, of course, with structural changes, but it is also connected to leadership. The summary of the Innovation Index in 2006 puts Greece in the catching-up category, still better than its Balkan counterparts but lagging behind other South European economies such as Italy and Spain. Looking at several innovation components as compiled by Kontopoulos, table 8.4 illustrates this weakness in plain sight. Even though the innovation area is where Greece is lagging, it is also the area where Greece can make significant changes and have greater impact on the economy as a whole. Using the gateway argument, which was successful for Ireland and Estonia, Greece needs to direct productive energies toward becoming a part of the global production networks, preferably in mediumhigh tech industries. This strategy was followed in Asia very well in many sectors, but perhaps, interestingly enough, especially with the global production of commercial aircraft. Although Asia as a region does not possess a commercial aircraft manufacturer to compete with Airbus or Boeing, a significant percentage of commercial aircrafts for both companies is made in Asian countries (Bowen 2007). Not only do Asian countries buy commercial aircraft but they also belong to the production networks for instruments and other electronic technologies useful for commercial aircraft. Belonging

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Trends and Prospects Table 8.4 Innovation indicators for medium and small size economies Indicators

Austria

Denmark Greece

GDP per capita in PPS

111

117

Time to takeoff in (years)

5.9

3.8

66 9.0

Ireland Portugal 115 4.8

70 9.3

Sweden

Finland

104

102

4.3

4.6

Lower/higher Tech industry

65.1/38.9 62.6/37.41 84.3/15.7 NA/NA 78.6/21.4 53.6/46.4 61.8/38.2

SME share/ind. Employment

18.2

45.4

57.5

NA

57.8

35.3

34.8

Transnationality 15.0 index

36.4

8.0

47.5

12.5

34.5

15.5

Trade share of GDP

47.4

39.6

24.6

80.6

35.6

41.6

35.5

Creative occupations

25.4

37.0

20.2

30.5

18.2

37.0

32.7

Job Mobility

NA

34.3

15.5

29.5

21.6

23.8

26.5

Trust in others

33.9

66.5

19.1

35.2

21.4

66.3

58.0

Source: Kontopoulos, et al, I Epomeni Mera gia Tin elliniki Oikonomia, unpublished manuscript.

to a global production network is linked with innovation. Improving innovation is then the major challenge for Greece. While Greece possesses the human resources, both in an educated labor force and in international knowledge of relevant markets, it does need to rapidly restructure higher education to provide not only cutting-edge educational opportunities to the new generation, but also opportunities for retraining the older generations. It is important to remember that one of the hottest political issues in the country in 2006 and 2008 was the education reform package, which failed in the first attempt of the government to pass it due to opposition from a united front comprising students, labor unions, and academics. It is also important that the Greek government has not let the issue die and is pushing for change while the opposition is divided, as noted in earlier chapters. It is an important structural change, which, along with the creation of national institutions such as the National System for Innovation and in conjunction with existing ones such as the National Council for Competitiveness and Development and the Centre for Planning and Economic Research, could provide the needed support framework for a leap into the knowledge economy. Considering the size of Greece, the size of its economy, and its politics, the best option for long-term growth, higher employment, better quality jobs, and expansion seems to be by embracing the global economy and not shying away from it.

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Conclusions This chapter has discussed the pathways to economic development and the features that constitute a “tiger” economy. In my discussion of the Asian, Celtic, and Baltic Tigers, I have come across several characteristics that may be used by a medium-sized advanced economy to create its own path to “tigerhood.” In the past forty years there have been many trials and tribulations for Greece, its political system, and its economy, but Greece now finds herself on the cusp of breaking through as a core economy in the world, not the least because of its location, its history, and its membership to the European Union. I have argued that the way for Greece to augment its recent good economic fortunes is by building a strategy around the concept of global production networks. GPNs allow even smaller or medium size economies to become part of the global economy and compete on equal terms with larger economies, and the examples I used were mainly the Irish and Baltic economies. The Irish (based on US foreign direct investment) and the Baltic countries (especially Estonia and Lithuania) have chained themselves into global production networks by utilizing different production clusters, consumer electronics and computers for Ireland and services for Estonia. As such, these economies have enjoyed tremendous economic growth and high employment rates while going through significant transformations of their economies and, consequently, their societies. Even though it is extremely unlikely that their paths can be repeated by others, other countries can learn certain lessons from the Asian, Celtic, and Baltic tigers and adapt them for their own use. In the case of Greece, I have argued that the pathway to economic expansion goes through the process of embracing the global economy and engaging in a strategy of positioning the country as the gateway to the Balkans, the Caucuses, and eventually the Middle East.

Chapter 9

Epilogue T         E Union had on Greek society and politics and concluded that Greece’s European trajectory is on track, given the political and social circumstances under which the country joined the EU. This conclusion has several implications for country-specific research within the EU, but I also hope it suggests some alternatives to existing theories of EU integration and policymaking. At a more specific level, certain claims of country-specific explanations are questioned here. For instance, throughout this book I questioned the existence of the so-called Greek paradox and cast doubt upon a general countryspecific “exceptionalism” when it comes to cooperating and integrating into the EU, but I have agreed with the idea of “creative destruction” that would account for the divergence in institutional structures, policymaking, and decision-making in different countries of the EU. Finally, at the national level, after examining Greece’s membership within the EU, I discussed Greek trends and prospects in order to map out an admittedly incomplete but nevertheless illuminating pathway to accelerating the rates of economic and social convergence with the most powerful economies in the world. The Europeanization of Greece Having borrowed heavily from the Europeanization literature, I have argued the research that reviews Greek society and politics at a given time tends to be pessimistic in its conclusions because it generally underestimates its trajectory or “path.” The research that examines Greece’s accession to the EU until the present has generally viewed the entire process in the light of “Zeno’s paradox,” in which Achilles will never reach the point where the tortoise is and will constantly—even at the infinitesimal level—be behind it. This view is not only shared by Greek scholars with respect to Greece but is

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also a larger view of the so-called southern-states in the EU, which are often viewed as laggards in policymaking and development. The Europeanization of Greece was successfully linked with the creation of a vibrant democracy that has withstood changes from traditional conservatism to a long period of socialism and a return to conservatism, which is similar to the cycles in other European nations. Considering the long record of veto players and intervention by conservative elites and the armed forces in Greek history, the consolidation of Greek democracy is no small feat, and the prospect of becoming a member of the European community at that time was a rather large “carrot” for the Greeks (Crampton 2002, Close 1992, Danopoulos 1983). The strengthening of democratic institutions such as the political parties and labor unions was a key development but currently presents a problem in search of a solution considering their dominance over civil society. Nonetheless, Greece has nothing to be jealous of. In fact, it may be a model for some of the East European member states in their initial step toward becoming EU members, the longer and more established democracies of the North. When researchers look at the economic and political development of Greece within the EU, they find it lacking in quality and diverging from other member states (Mouzelis 1978 and 1986; Pagoulatos 2004; Pelagidis 2005). Allison and Nicolaides elaborated on the concept of the Greek Paradox, detailed by Gianna Aggelopoulou Daskalaki, arguing that Greek performance does not match its promise (Allison and Nicolaides 1997). Barring the fact that this is not truly a paradox because many countries face the same issues, the question of whether this is true or not regarding Greece is a legitimate one and merits investigation. In this book I elaborated on what I found to be really three interrelated paradoxes: (a) the paradox of society and politics; (b) the paradox of public policy and politics; and (c) the paradox of foreign policy.

The Paradox of Society and Politics The paradox of Greece’s performance versus its promise comes directly from its EU membership when it comes to societal/political change. The EU is the catalyst of many issues regarding Greece today, most importantly the issue of identity as it relates to both a national versus a supranational (EU) identity and its impact on public policy. As a direct result of Greece’s membership to the EU, several long-standing principles around which Greek society is coalescing are questioned. The first is the single ethnicity of the Greeks that generally, until recently, tended to exclude the small minorities prior to membership in the EU. Subsequent advances within Greek society have questioned the myth of an ethnically pure Greece, an important development in a region of the world where national borders and coinciding

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ethnicities have killed millions. Membership in the EU produced major conflicts within Greek society relating to its identity as a Christian Orthodox nation and as a nation-state founded and serving the Greeks. Yet, while certain actors in Greek society such as nationalist parties, the Greek Orthodox Church, and some external actors, especially Greece’s northern neighbor the Former Yugoslav republic of Macedonia (FYROM), have negatively impacted society, thus making it more defensive and in some cases outright xenophobic, Greece has been able to navigate the murky waters of nationalism avoiding being directly engaged by the chaos of the Western Balkans in the 1990s and emerging as a major player in the region. Several issues in the past decade show the progress made in Greek society. First, the issue of the national identity cards and whether or not they should indicate the cardholder’s religious beliefs, which the Greek Orthodox Church and other actors insisted they must and which was negated by the state. Second, issues raised by the increased waves of legal and illegal immigration in Greece, such as asylum policies and employment polices but also issues of the rights of recent immigrants such as the right to carry the national flag during school parades during the Greek independence day or the day commemorating World War II. Again, the Greek state not only resisted the impact of strong national actors who normally would have vetoed such actions in the past but remained firmly unified politically against such ideas and moved on to clarify and swiftly change policy. Yet, when it came to the issue of the high school history books and the ability of the government to amplify their message and get rid of the books’ nationalist overtones, the state was in retreat and the politicians responsible were punished in the last elections, clearly showing the levels of tolerance of the Greek society. Nonetheless, when one examines the major concerns of the average Greek, issues such as nationality, identity, and foreign affairs, which only a decade ago dominated, seem to be in retreat, with economic interests taking the lead. The state that did so much to dominate society and feed some of the concerns to the citizens has now limited its oversight in areas it previously dominated. Present-day governmental pronouncements are so radically different than in the past that it could make one wonder if this is the same country. Greece went from “Greece for the Greeks” to “eliminating everyday citizen hassle in government” within twenty years. Labor unions, although still powerful, just like their identical counterparts elsewhere, have not been able to resist a tidal wave of change toward the liberalization of the country, and their fighting (see number of strikes in chapter 4) has shrunk significantly. Greek civil society is still weak (Tsoukalas 1995, Sotiropoulos 2005, Paraskevopoulos and Lyberaki 2006), yet the seeds of change have produced important changes as illustrated in several chapters, with the knowledge level about EU affairs (see table 5.2 and 5.3), their communitarianism (see graph 6.1), and concern with post-materialist values.

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Europe’s Greece: A Giant in the Making

The Paradox of Public Policy and the Economy In terms of public policy and the economy, the paradox means diverging from the EU in terms of the economy, which Greece is currently doing, although it is fast closing the gap. Remaining below the EU average per capita GDP is one constant characteristic of Greece’s economic performance, and when one looks at the first half of Greece’s membership it reveals a fairly bad record of economic policies. When one looks at the second half of Greek membership (1996–2007), one sees that Greece has fared much better, and when one looks at the current levels of economic activity the picture gets even prettier. Greece is changing from a truly statist society where the political party dominated the government and produced policies to a more state-directed, liberalized, and Europeanized state. Transposition rates of EU legislation are down, economic growth rates are significantly up and expect to be double that of the EU average for several years in a row, and a modernization discourse has overtaken the political elites of both dominant political parties. In addition to these numbers, the behavior of Greece vis-à-vis the region has changed and Greek businesses have returned to their historical roots as the merchants of the Balkans, only this time they have not only brought their merchant penchant but their industrial might as well. With significant foreign direct investment, Greece, by design and with the agreement of the political parties in power, has shed its isolationism and is increasingly involved in the Balkans. In a region avoided by the rest of Europe, and with a focus more on the Central and East European countries (CEE), Greece is the most dominant and active player with a 7.0 billion Euro investment. Changes on three distinct levels are responsible for the improved economic outlook of Greece and its changing regional attitudes: first, changes in ideology; second, changes in national discourse; and third, changes in the making of national public policy. With a move toward the liberalization of certain sectors of the economy, the waning of traditional socialism, an emerging “third way” model of pragmatic policymaking, and the agreement of Greek elites, there is an emerging consensus that Greece should be a country more engaged with the region and the world rather than a more defensive and isolationist country. This has led to major changes in how Greece views itself among other countries in the region, with some of which Greece has had rather adversarial relations.

The Paradox of Foreign Policy Greece’s foreign policy paradox refers to the disparity of Greece’s promise as a strong Balkan member of the EU and its performance as a defensive isolationist country fearful of the volatile Balkans. Again, one can observe the

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changes in the behavior of Greece if we simply divide the era of Greece’s EU membership into two halves. During the first half of the country’s membership in the EU, Greece was characterized as obstinate, and there are good reasons both for its obstinacy and the characterization itself. Ideologically predisposed to postcolonial ideas, hardly ready to participate in EU institutions, and leery of what was presumed to be a certain level of favoritism toward its traditional enemies, Greece was not able to fully participate and engage the EU. It was stuck with the process of constantly raising objection and fearing the worst. The country’s fears appeared to almost come true when they watched Yugoslavia disintegrate and the southern province named Macedonia, which was also the name for neighboring Greece’s northern province, lay all but a formal claim to Greek territory. In the Balkans, nationalism and realpolitik combined with a deadly result after the disintegration of Yugoslavia, and the public discourse in Greece anticipated the same for themselves. Thus, Greece reacted very strongly to the issue of changing the name of FYROM to simply “Macedonia” and to the mistreatment of the Greek minority in Albania by the conservative government at that time. In addition to these new problems, Greece had long-standing disputes with Turkey, the largest and militarily the most powerful country in the region, over the 1974 invasion of Cyprus, the extension of Greek territorial waters in the Aegean Sea, and existence of what is called grey zones of sovereignty between Greece and Turkey. With a plateful of old and new issues, successive Greek governments succeeded at preventing the further slippage of the country into the “Balkanization” mode, turning things around internationally (albeit with some issues still undecided), and successfully participating in EU institutional structures (especially during the Greek presidency). The biggest achievement during the second part of Greece’s tenure as a member of the EU is that she did not fall into the ethnic conflict trap that was particularly virulent in the Balkans, and converting bilateral issues, such as the Cyprus issue, into EU issues, with the accession of Cyprus into the EU. Considering that the EU is holding periodic negotiations with candidate country Turkey, Cyprus’ membership provides Greece with an additional level of support, something that successive Greek governments understood and sought to take advantage of. The Greeks, however, did not engage in defensive punitive anti-Turkish political moves within the EU but sought to engage Turkey both by supporting its application in the EU and through what is now known as “earthquake diplomacy.” Holding lengthy talks and agreeing to disagree on issues under discord led the Greek prime minister to Ankara for the first time in fifty years, a major diplomatic move that started under a socialist government and continues under a conservative

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one. In the same manner as in the economic policy, Greece became a full member of the EU community in foreign affairs, just as it did in economic affairs after becoming a member of the Eurozone, and Greece currently engages in constructive policies in the Balkans and Turkey. I have attempted to offer the complete picture of the ebbs and flows of the Greek Europeanization process, and I surmise that clearly there are significant improvements in the performance of Greece in the EU. Therefore, I conclude along the lines of Ms. Daskalaki that the Greek paradox has been solved. Yet, as Greece stands in the EU and is attempting to perform more structural changes that would bring additional flexibility in the Greek economy and lead the country even closer to EU convergence, one wonders what should be Greece’s next priority. Trends and Prospects Having established that by regional standards Greece is an economic and political giant, I have undertaken a brief comparison between Ireland, the Baltic States, and Greece in order to examine the short-term possibilities for developing the Greek economy even further and also establishing a longterm plan of action along the same lines. It seems that several factors affect an economy’s ability to become part of the club of fast growing economies of the world, nicknamed “tigers” by various scholars and journalists. These factors include (a) location, (b) timelines, (c) level of development compared to the competition, (d) existing competences and comparative advantages, (e) structural policies, (f) elite agreement on the rules of the game, (g) other sociopolitical intangibles. These factors affect the trajectory and development of different economies, which is why countries with the same developmental plans end up with different outcomes. The Irish model is heavily based on US Foreign Direct Investment and completely dependent on two sectors of the economy, IT and Consumer electronics, while the Baltic tigers have a mixed FDI coming mostly from Europe and are more service oriented. Greece, on the other hand, has grown its economy internally virtually without outside FDI, with the exception of EU development funds (such as structural, cohesion, regional, and so on). In the EU, economic development in the periphery could be perceived as an isosceles triangle with an Atlanticist side, a Baltic/East European side, and a southern side. As a member occupying the southern side, Greece is part of the side that has yet to articulate a complete developmental plan. However, Greece is on the cusp of doing this, considering the changes in politics, economics, and society that have taken place because of the influence of the EU, and because of its location and history. Location and history

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combine to make Greece a strong gateway country for markets such as the Balkans, certain East European countries, the Caucasus, and even the Middle East. Greece’s knowledge of these markets is a result of its historical ties to these regions and because recent immigration into the country, along with an educated labor force, provides similar comparative advantages that the Irish and Baltic states have to transnational corporations. In addition, the level of economic development that Greece has reached because of its membership in the EU has transformed some Greek corporations into TNCs, and this is making Greece an international player in the region by default. Finally, Greece’s biggest challenges seem to be structural reform, which I have shown to be a slow and cumbersome process because it involves ideological and political change that can only be undertaken slowly in a democracy, and innovation, in which Greece is significantly lagging. Having analyzed these factors, I suggest that Greece’s pathway to sustained economic growth and development lies in embracing the global economy and strategically positioning itself as a gateway to the Balkans, Eastern Europe, and the Middle East. Implications of Greek Europeanization Using a developmentalist model of explaining Greek behavior with the EU puts this research at odds with research that has argued so far that the EU is endangering the nation-state as we know it in post-Westphalian Europe. It is one thing to say that state policies change because of pressure from the EU and thus these pressures are accommodated by adaptation, elite reeducation, legal incorporation, and so on, and quite another thing to say that the state has developed mechanisms by which it internalizes external and internal stimuli, such ideological shifts, or shifts in public expectation. In this book the state is not a secondary consideration or just another player in the multitudes that are now interacting with the EU and the global environment, but is instead the main actor whose preferences are shaped by endogenous and exogenous stimuli. Past theories of European integration and the current debate of Europeanization indicate a somewhat restricted space for the state within the EU. Seeing the EU as an Aristotelian “entelechy,” many theorists view the process as having an end in itself, and thus the EU as the end in and of itself. A recent commentator called the EU the United States of Europe (Reed 2004), which is an example of the type of theorizing that assumes that the EU is an end in and of itself. Other theorists, much in the same way that scholars have argued that Greece will always be one step behind the EU, argue that for Greece and the EU it is like the race between Achilles

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and the Tortoise in Zeno’s paradox, where Achilles will never reach the tortoise by virtue of the fact that he will always be one step behind her. Intergovernmentalists, for example, argue that the EU is a result of negotiations based on the lowest common denominator among states. Although this may be true for certain major treaties and agreements that the EU states have undertaken, such as the Single European Act (Moravscik 1998), it is not true for the development of the EU as a polity. I have argued that the case of Greek membership in the EU shows the need for a more nuanced model of European integration, one that accounts for the increased complexity of European Politics. This emerging complexity that I call “upwards structuration” can be seen in the EU member states such as Greece, and it encompasses adaptations of rules, norms, procedures, and, most importantly, ideologies and developmentalist plans. Greece went from being wary of EU membership to being very Euro-friendly in a decade. At the same time it also shed its ideological ties to previous socialist economic models and embraced a more liberal approach to policymaking as a whole. Many people would undoubtedly point out the many deficiencies of the system, which remains less liberal than that of many other states in the EU, but none can deny the direction Greek politics have taken. This is not the mere result of an adaptation process that changes rules and procedures in a state as a result of membership, nor is it simple administrative changes and the creation of new regional or intergovernmental institutions. The change that Greece is undergoing is a full-scale “out with the old, in with the new” change that is agreed upon by the majority of the elites and the political spectrum. The changes in Greece are much closer to the Shumpeterian idea of “creative destruction” than anything proposed so far by the EU theorists (McCraw 2007). If anything, the concept of creative destruction helps us to understand the political and economic changes that have taken place in Europe and, in particular, within the European Union. Finally, I hope that this book has raised many more questions than it has answered, not only about Greece’s political and economic development since it became a EU member state but also about the EU integration process. I have argued that the available explanations of EU integration are incomplete, especially when it comes to the development of an institutional emergence model that explains the long-term political and economic changes. Very importantly, as well, I have raised the issue of the emerging complexity of the interaction of twenty-seven countries among themselves and the global political and economic system, which were addressed neither by the initial theories of EU integration nor by more precise models of EU institutional adaptation. My understanding is that the EU develops in the same manner as the White Poplar tree that is a native of the continent (Populus Alba): a strong

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construction with a wide trunk and tall branches that perpetuates itself both by seed from the branches and by root, creating clonal colonies, yielding a new layer of the same tree several meters around the original one. The options are more than one, growth time and the result are different, but the trees belong to the same family, and, in fact they are genetically the same.

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NOTES 1 Introduction 1. Taking a look at major Greek newspapers such as Kathimerini, Ta NEA, To Vima and so on will be convincing enough. 2. As reflected in the Eurobarometer, Special Eurobarometer: The Future of Europe, 2006. 3. The latest available Eurobarometer registered that Greek expectations are for the worse when it comes to both the economy and employment. Eurobarometer 65.2, National report executive summary, 3. 4. As cited in the World Bank, Greek per capita GNI was between the thirty-eighth largest and forty-first largest in the world. http://siteresources. worldbank.org/DATASTATISTICS/Resources/GNIPC.pdf 5. An interesting interactive map of Europe with a definition of a two-speed Europe can be found at the BBC Web site http://news.bbc.co.uk/hi/english/ static/in_depth/europe/2000/redefining_europe/twospeed.stm

2

Post-Dictatorial Greece: Democratization and Transition to Socialism and Beyond

1. A series of insightful books on this era of Greek history have been published: among the most important of them are Mazower’s Inside Hitler’s Greece, Close’s Greece since 1945, and a comparative study of Balkan political developments by R. J. Crampton in The Balkans since the Second World War. 2. Karamanlis removes himself from the Greek political scene on December 9, 1963 and goes to exile. 3. Alfa Bank, Ikonomiko Deltio, October 18, 2007, 27. 4. A popular election slogan indicated that the EC and NATO belonged to the same syndicate. 5. In fact the prosecution went ahead and the president of PASOK was indicted but cleared, while some of his deputies were found guilty. 6. Much, about a quarter, of the PASOK membership had prior political experience before joining the movement, as shown by Vernardakis 1996. 7. At least according to “. . . . Several members of PAK attended guerrilla training abroad, and so on . . . ”

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8. The threshold for parliamentary representation in Greece is 3 percent of the national vote, and only political parties with 3 percent and above of the popular vote get represented in the Greek parliament. The KKE interior/Leftist Coalition had 2.9 percent in the 1993 election and was not represented. 9. Some great analyses on the transformation of PASOK includes, but is not limited to, Lyrintzis C. “PASOK in Power: From ‘Change’ to Disenchantment,” in Clogg R. ed. Greece, 1981–89: The Populist Decade, London: St Martin’s Press, 1993; and Moschonas, G. “The Path to Modernization: PASOK and European Integration,” Journal of Southern Europe and the Balkans 3, 1 (2001): 11–24. 10. See Mouzelis, N. Politics in the Semi-periphery: Early Parliamentarianism and Late Industrialization in the Balkans and Latin America, London: McMillan, 1986. 11. See Mardas for a detailed account on the firing of Asimakis Fotilas on January 4, 1982 for signing a EU communiqué on Poland and the Soviet Union, 69–72. 12. One can find the document on SYRIZA’s Web site at http://www.syriza.gr/ taytotita/diakyriksi/b-oi-amesoi-programmatikoi-sto3c7oi-kai-ta-metopapalis/ 13. As reported on August 22 by the Greek National TV (ERT) after a joint press conference by the leaders from the respective parties. 14. Eleftherotipia, Tholo Topio kais to Vathos Kalpes, February 5, 2007. 15. Kathimerini, I Mirees Stigmes toy G. Papandreoy, September 30, 2007. 16. Ibid. 17. Ta Nea, Domino Lathon efere of eklogikos afinidiasmos, September 17, 2007. 18. Ibid. 19. Mavris, “G. Pos ftasame sto eklogiko apotelesma,” Kathimerini, September 23, 2007. 20. To Vima, Giati Xairetai of k. Karatzaferis, September 30, 2007. 21. Kathimerini, August 19, 2007. 22. Vasiliki Georgiadou, To PASOK Ypesti Loytro Aimatos, Eleftherotipia, September 18, 2007.

3 Beyond Political Parties: The Politics of a European Identity 1. Eurobarometer 66, European Reality, Brussels: European Commission, 2007, Greek national report. 2. The meeting took place during a dinner with the parliament member on August 6, 2002. All politicians, public servants, and interest group leaders who agreed to be interviewed in the process of writing this book will only be identified by their organization’s credentials or their political party if they are currently not members of the Greek parliament, unless

Notes

3. 4. 5. 6.

7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

19. 20.

21. 22. 23.

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they have specifically indicated that they would like to have their identity revealed. Samuel Huntington, “The Clash of Civilizations?” Foreign Affairs (Summer 1993): 25. Ibid. A. D. Smith, Theories of Nationalism, New York: Holmes and Meier, 1983158. The study conducted by Bantimaroudis and Kampanellou finds a significant percentage of articles that employed culture and most importantly religion, as Huntington does, as a means of describing the conflict in two newspapers Ta NEA and The New York Times in regard to the war in Bosnia and Kosovo. http://news.bbc.co.uk/2/hi/uk_news/politics/3654621.stm Texas v. Johnson, 491 US 397 (1989) Ibid. Ardhn 62. Ibid. Kostas Zouraris, Vevila Kivdila KSivala: allos I NATOkemaliki symmoria tis “Istaorias” gia thn 6h dimotikoy, Athens: Armos, 2007. Ardhn 62. To Vima, October 5, 2007. Skai.gr, March 19, 2007 Ibid. Kathimerini , October 2, 2007. Indicatively see T. Nairn, The Break-up of Britain: Crisis and NeoNationalism, London: Verso, 1981; B. Vernon, Devolution in the United Kingdom, Oxford: Oxford University Press, 1999; E. Kestil and P. Soderlund, “Subnational Political Opportunity Structures and the Success of the Radical Right: Evidence from the March 2004, Regional Elections in France,” European Journal of Political Research 46, 6 (September 2007): 773–796, T. F. Pttigrew, “Reactions Towards the Mew Minorities of Western Europe,” Annual Review of Sociology 24, 1 (1998): 77–104; K. Marciniak, “New Europe: Eyes Wide Shut,” Social Identities 12, 5 (September 2006): 615–633; and , The Economist 373, 8401 (November 13, 2004): 55–56. See the Turkish Foreign Ministry Web site at http://www.mfa.gov.tr/ deprivation-of-citizenship.en.mfa Anagnostou claims there are more than 120,000 Muslims in Western Thrace, while Tsitselikis notes that there are less than 110,000 of them in the same area. Stavros Tzimas, Kathimerini, September 18, 2007. ht t p: //e c .e u r op a .e u /ju s t i c e _ hom e /f sj/i m m i g r a t i on / fsj_immigration_intro_en.htm http://www.oecdobserver.org/news/fullstory.php/aid/337

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4 Beyond Politics: Society and the State 1. In cases that Eurobarometer and other surveys allow for it. 2. Eurobarometer 63 to 65.2 (2005–2007) and European Social Reality poll (2006) by Eurobarometer, and Kapa Research survey on behalf of the newspaper To Vima (December 2006). 3. Kappa Research, 2006. 4. Kapa research December 2006, 8. 5. Eurobarometer, 64.2, 4. 6. Eurobarometer, 62.4, 5. 7. Ibid., the numbers for EU 25 average is 72 percent and for Greece it is 75 percent. 8. A typical headline of the Communist Party newspaper Rizospastis reads “Profits for the Industrialists, Polluted Water for the Public,” Friday, October 12, 2007. 9. D. Truman, The Governmental Process: Political Interests and Public Opinion, New York: Alfred A. Knopf, 1951. 10. M. Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, Cambridge, MA: Harvard University Press, 1965. 11. Looking at data from the Freedom house, one notices that there is a doubling in the number of “free” countries around the world in the past fifteen years. Available at http://www.freedomhouse.org/template. cfm?page=130&year=2006 12. Alekos Alavanos, September 16, 2007, available at http://www.syriza. gr/news/dlosi-toy-epikefals-toy-synaspismoy-rizospastiks-aristeras-alalabanoy-gia-t-apotelesmata-ton-eklogn/ 13. Alekos Alavanos, September 19, 2007. 14. Alekos, Alavanos, September 30, 2007. 15. For discussions, see G. T. Mavrogordatos, Omades Piesis kai Dimokratia, Athens: Patakis, 2005; G. T. Mavrogordatos, Metaksi Pytiokampti kai Prokrousti: I Epaggelmatikes Organosis stin Ellada, Athens: Odysseas, 1998; K. Lavdas, The Europeanization of Greece: Interest Politics and the Crises of Integration, London: Palgrave, 1997; D. Sotiropoulos, Populism and Bureaucracy: The Case of Greece Under PASOK, 1981–1989. 16. D. Sotiropoulos, “The Remains of Authoritarianism: Bureaucracy and Civil Society in Post-Authoritarian Greece,” Cahiers d’etudes sur la Mediterranee orientale et le monde turco-iranien 20 (July/December 1995), also available at http://www.cerisciencespo.com/publica/cemoti/textes20/sotiropoulos.pdf 17. See R. Clogg, Greece, 1981–89: The Populist Decade, London: St Martin’s Press, 1993. 18. Abts and Rummens then argue that because of this incompatibility, populism movements may be underestimated in their antagonistic relationship to democracy. 19. P. C. Ioakimidis, “The Europeanization of Greece: An overall assessment,” in K. Featherstone and G. Kazamias, eds, Europeanization and the Southern Periphery, London: Frank Cass, 2001, 79.

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20. K. Lavdas, The Europeanization of Greece, London: Palgrave, 1996, 17. 21. Ibid., 245. 22. J. Agnone, “Amplifying Public Opinion: The Policy Impact of the US Environmental Movement,” Social Forces 85, 4 (June 2007): 1593–1620. 23. G. Almond and B. Powell, Comparative Politics: A Developmental Approach, Boston: Little Brown, 1966. 24. Both, N. Christodoulakis, in A. Mitsos and E. Mossialos, eds. Contemporary Greece and Europe, Aldershot: Ashgate, 2000 and G. Alogoskoufis, “The two faces of Janus: Institutions, Policy Regimes, and Macroeconomic Performance in Greece,” Economic Policy 20: 149–192. 25. The United States also subsidizes cotton production, guaranteeing a price of 72 cents a pound, and some of the most famous recipients of this subsidy include, among others, corporations such as John Hancock Insurance and Chevron, and individuals such as banker David Rockefeller, basketball star Scottie Pippen, and the late Enron CEO Kenneth Lay, as the Philadelphia Inquirer noted on Monday, May 6, 2002 and the Washington Post on Wednesday, November 7, 2007. 26. The United States, according to Fraser Cameron, had spent 452$ billion or approximately 35 percent of its GDP in 2004, F. Cameron, US Foreign Policy After the Cold War: Global Hegemon or Reluctant Sheriff? 2nd ed. New York: Routledge, 2005; for a discussion on the MIC, see Chalmers Johnson, The Sorrows of Empire: Militarism, Secrecy and the End of the Republic, New York: Henry Holt, 2004, among others. 27. The issue regarding the naming of Greece’s northern neighbor Former Yugoslav Republic of Macedonia is one of the major foreign policy issues in Greece. The Church of Greece led the public outcry against FYROM’s attempt to name its newly independent state “Macedonia,” which name was also held by the Greek region adjacent to FYROM in the south. The “Macedonian” issue will be discussed in detail in chapter 7. 28. Eleftherortipia, July 9, 2007 29. Kathimerini, November 1, 2007, To Stixima ton Ierosolimon. 30. Eleftherotipia, July 1, 2007 and Eleftherotipia, February 7, 2005 also see analysis by Panatzopoulos in Eleftherotipia, November 8, 2007. 31. You can find more information in their Web site http://www.ntua.gr/ posdep/ 32. Kathimerini, November 23, 2005. 33. For a more extensive review of the ties between the US bureaucracy and economic interest groups the reader should review the literature on iron triangles and capture theory. Among the literature, I suggest the following: D. Spar, G. Tobin, and R. Vernon, Iron Triangles and Revolving Doors: Cases in US Foreign Economic Policymaking, New York: Praeger, 1991; G. Adams, The Politics of Defense Contracting: The Iron Triangle, New Brunswick: Transaction Books, 1982; P. Baran and P Sweezy, Monopoly Capital: An Essay on the American Economic and Social Order, Harmondsworth: Penguin Publishing, 1968; George Stigler, “The Theory of Economic Regulation,” Bell Journal of Economics 2 (1971): 3–21; S. Peltzman, “Towards a More

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General theory of Regulation,” Journal of Law and Economic 9, 2 (August 1976): 211–240; G. Becker, “ A Theory of Competition Among Pressure Groups for Political Influence,” Quarterly Journal of Economics 98, 3 (August 1983): 371–400; and S. Peltzman, M. Levine, and R. Noll, “The Economic Theory of Regulation after a Decade of Deregulation,” Brookings Papers on Economic Activity, Microeconomic (1989): 1959. 34. Kapa research December 2006, and Kathimerini, November 12, 2007. 35. Kathimerini, November 12, 2007.

5

Greece: A Country of Paradoxes

1. On the successful side, one may categorize, in a non-exhaustive list, Diamantouros who considers 1981 the watershed year for Greek democracy both because of the turnover of democracy and because of Greece’s accession to the EU. More cautious but still fairly positive of the more recent (post2000) developments in Greece are Lyrintzis, Nicolacopoulos, Kazakos, and Ioakimidis, while on the fairly negative side one can categorize Stergiou, Tsoukalas, and Mouzelis. 2. In a recent Eurobarometer survey the Greek public indicated levels of trust toward the EU of 63 percent while their level of trust for their own government was 41 percent. Although the percentage of trust toward their government is at the average of the EU-27 and the EU trust numbers is below the EU-27, it is indicative that the Greek public trusts the supranational institutions more than their national ones. 3. G. T. Allison and C. Nicolaides, The Greek Paradox: Promise vs. Performance, MIT Press, 1997. 4. Gianna Angelopoulos-Daskalaki 2005 video archive at http://www.ksg. harvard.edu/ksgnews/Features/news/110205_athens.htm. 5. For a discussion on American governmental failure, please see, B. L. Dorgan, Take this Job and Ship It: How Corporate Greed and Brain-Dead Politics Are Selling Out America, New York: St. Martin’s Griffin/Thomas Books, 2007; G. Pallast, The Best Democracy Money can Buy: The Truth About Corporate Cons, Globalization, and High Finance Fraudsters, New York: Penguin books, 2004; B. Barber, Fear’s Empire: War Terrorism and Democracy, New York: WW Norton Co., 2003; M. Moore, Dude! Where is My Country? New York: Werner Books, 2003, among many others. 6. BBC November 12, 2007 http://www.bbc.co.uk/blogs/thereporters/ markmardell/2007/11/extra_virgin.html 7. Commission of the European Communities Final Report COM (2004) 573, Protection of the European Communities and Fight Against Fraud, Brussels August 30, 2004, 33. 8. Vlasis Blasidis, Metanastes kai MME stin Ellada tou 20oyAiwna, in C. Fraggonikolopoulos, MME Kinonia kai Politiki: O Rolos kai I Litourgia stin Sichroni ellada, Athens, I. Sideris, 2005, 221–239.

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9. I. Nicolacopoulos quoted in Vima, on November 20, 2007. 10. Kathimerini January 13, 2008. 11. See works of Tsoukalas, Sotiuropoulos, Mouzelis, and Pagoulatos, on civic society. 12. Tsoukalas 1995, 199. 13. Ibid., 131. 14. S. Stavridis, “Assessing the views of academics in Greece on the Europeanization of Greek Foreign Policy: A Critical Appraisal and A Research Agenda Proposal,” Discussion paper no 11, LSE Hellenic Observatory, August 2003, also available at http://www.lse.ac.uk/collections/hellenicObservatory/pubs/DP_oldseries.htm 15. Although this list in not exhaustive, it should be illustrative, Kostas Simitis, Stoxi, kaiStratigiki, Prooptikes: Kimena 2000–2006, Athens: Polis, 2007; Evaggelos Venizelos, I elliniki Ikonomia Meta tin Entaki stin ONE, Athens: Kastaniotis, 2000.

6 The Paradox of Public Policy and Politics 1. As an indication of this, see Mouzelis Nikos, “Giati apotigxanoun I metari0miseis: to kratos and to kommatiko football,” in Pelagidis, T., ed., I Emploki ton Metarithmiseon stin Ellada: Mia Apotimisi toy Eksixronismoy, Athens: Papazisis, 2005, 17–36, but the list is too large to mention individually. 2. B. Boswaorth and T. Kollintzas, “Economic Growth in Greece: Past Performances and Future Prospects,” in R. C. Bryant, N. Garganas, and G. Tavlas, eds, Greece’s Economic Performance and Prospects, Athens: Bank of Greece, 2001, 153. 3. Zahariadis N and A. Kalaitzidis, “Papandreou’s NATO Policy: Continuity or Change?” Journal of the Hellenic Diaspora 23, 1 (1997). 4. Bulletin of the European Communities 3(1982). 5. As an indication of this, see Pelagidis, T., ed., I Emploki ton Metarithmiseon stin Ellada: Mia Apotimisi toy Eksixronismoy, Athens: Papazisis, 2005. 6. A close look at the developments of the corruption scandal in Siemens corporation in Germany led to the reopening of old wounds in Greek politics as recently as February of 2008. 7. N. Christodoulakis, To Neo Topio tis Anaptiksis, 2nd ed., Athens: Kastaniotis, 1999. 8. G. Papantoniou, Europi kai Ethniki Stratigiki, Athens: Aixmi, 1993, 64, also published in Eleftherotipia on June 30, 1991. 9. Evaggelos Venizelos, I Elliniki Ikonomia Meta tin Entaksi stin ONE, Athens: Kastaniotis, 2000. 10. Kostas Simitis, Politiki gia Mia Dimiourgiki Ellada, 1996–2004, Athens: Polis, 2005, 330. 11. Nikos Nikolaou, “To Komma Kyriarxei stis DEKO,” Kathimerini, April 16, 2008. 12. Kathimerini, December 30, 2007.

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13. Eurobarometer, no 67, 37. 14. Eurostat, Inflation rates, annual average rate of change in Harmonized Indices of Consumer Prices (HICPs). 15. Trapeza tis ellados, Ekthesi toy Diikiti gia to Etos 2007, Athens: 2008. 16. Bank of Greece, Ekthesi toy Diikiti gia to Etos 2007, Athens: Bank of Greece, 21. 17. Numbers taken from Eurostat and are available at http://epp.eurostat. ec.europa.eu/portal/page?_pageid=1996,39140985&_dad=portal&_s chema=PORTAL&screen=detailref&language=en&product=STRIN D_ECOBAC&root=STRIND_ECOBAC/ecobac/eb012 18. Bank of Greece, Ekthesi toy Diikiti gia to Etos 2007, Athens: Bank of Greece, 22. 19. NPR, April 24, 2008 20. Bank of Greece, Ekthesi toy Diikiti gia to Etos 2007, Athens: Bank of Greece, 24. 21. K. Simitis, Politiki gia mia Dimiourgiki Ellada, 1996–2004, Athens: Polis 2005, 169. 22. W. Kok, (2004) Facing the Challenge: The Lisbon strategy for Growth and Employment, Luxemburg: Office of Publications of the European Communities, 6. 23. G. Pagoulatos, “The Politics of Privatization: Redrawing the Public-Private Boundary,” West European Politics 28, 2 (March 2005): 378. 24. To Vima, April 22, 2008. 25. Ta Nea, April 19, 2008. 26. To Vima, April 22, 2008. 27. E. Venizelos, I Elliniki Ikonomia Meta tin Entaksi stin ONE, Athens: Kastaniotis, 2000, 149. 28. See http://www.hri.org/news/greek/eragr/2008/08–02-12_1.eragr.html#10; and on the sale of OTE to Deutsche Telecom, see http://www.marketwatch. com/story/deutsche-telekom-buying-20-of-greeces-ote-for-4-billion. 29. To Vima, April 22, 2008. 30. As noted in the web pages of the Greek parliament: http://www.parliament. gr/politeuma/syntagmaDetails.asp?ArthroID=18 31. Ta Nea, Dixasmenoi sto PASOK gia to Arthro 16, November 28, 2006. 32. Ta Nea, Dixasmenoi sto PASOK gia to Arthro 16, November 28, 2006. 33. N. Diamantouros, Politismikos Diismos kai Politiki Allagi: I Ellada tis Metapolitefsis, Athens: Alexandria, 2000. 34. Ta Nea, Dixasmenoi sto PASOK gia to Arthro 16, November 28, 2006. 35. Kathimerini, Statheri Diafonia Korifis gia to Arthro 16, March 4, 2008. 36. P. Savvides, Dilimata Sosialdimokratias, Athnes Voice, March 27, 2008. 37. On March 11,2004 the Atocha train station in the center of Madrid was bombed, which claimed the lives of 191 people. As a result, the elections held just three days later produced a victorious Socialist Party and a defeated the conservatives, which had supported the policies of the US War on Terror and had sought to closely identify itself with the Bush administration.

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38. Ibid. 39. M. Sadoun, “Is socialism Liberal? Democracy and French Socialist Ideas,” Dissent (Spring 2007). 40. K. Papadioxos, “Risko I Aristeri Strofi Papandreou,” Kathimerini, March 30, 2008. 41. Theo Angelopoulos, Ulysses Gaze, Greek Film Center, 1995. 42. J. Bastian, “ ‘Knowing your Way in the Balkans’: Greek Foreign Direct Investment in Southeast Europe,” Southeast European and Black Sea Studies 4, 3 (September 2004): 458. 43. Bank of Greece, Ekthesi toy Diikiti gia to Etos 2007, Athens: Bank of Greece. 44. Several popular songs, films, and TV documentaries depicted that type of self-image in Greece, most notable among them being Dionisis Savopoulos, where the lyrics say “This is the Balkans, this is not a Joke” (my translation), or several movies, such as eponymous movies Balkanizater or the movie Brazileiro, both produced in the late 1990s and early 2000s but dealing with the 1980s Greece and more specifically with comical situations arising from Greece’s accession to the EU. 45. Dora Bakoyiannis, The View From Athens, International Herald Tribune, Monday, March 31, 2008. 46. Ibid. 47. K. Simitis, Politiki gia mia Dimiourgiki Ellada, 1996–2004, Athens: Polis, 2005, 243.

7

Greece’s Foreign Policy Paradox

1. L. Tsoukalis, “Greece in the EU: Domestic Reform Coalitions, External Constraints and High Politics,” in Mitsos, A. and E. Mossialos, eds., Contemporary Greece and Europe, Aldershot: Ashgate, 2000, 37–38. 2. A cursory look at the works of Tsardanidis and Stavridis 2005, Stavridis 2003, and Tziampiris 2000 provides an indicative line of this argument. 3. See discussion by Brian White, in W. Calrsnaes, H. Sjursen, and B White, eds., Contemporary European Foreign Policy, London: SAGE, 2004, 11–31. 4. Tsoukalis, L. “Greece in the EU: Domestic Reform Coalitions, External Constraints and High Politics,” in Mitsos A. and E. Mossialos, eds., Contemporary Greece and Europe, Aldershot: Ashgate, 2000, 45. 5. As reported by Dan Eggen in the Washington Post on Sunday, October 1, 2006, b3. 6. As reported by William Blum in his book Killing Hope: US Military and CIA Interventions Since WWII, Common Courage Press, 1995. 7. A. Papahelas, O Viasmos tis Ellinikis Dimokratias: O Amerikanikos Paragon, 1947–1967, Athnes: Estia 1997. 8. This quote is taken from an informal discussion with a US-based Greek diplomat. 9. Yugoslav Telegraph Service News agency, “Premier Reports Three Billion Dollar Loss Because of Sanctions and Greek Blockade,” September 3, 1994.

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10. BBC, broadcast May 18, 1995. 11. The inability of the makers of Greek foreign policy to produce a viable solution that would provide a long-term stable relationship between the two countries has been noted by N. Zahariadis. 12. NYT, May 14, 1995, section 4, page 6. 13. The Spectator, 1992. 14. The Toronto star, “Balkan tinderbox just needs spark to set it off,” March 12, 1995, E5. 15. Financial times, April 25, 1995, 16. 16. The Economist, March 25, 1995, 60, and the Globe and Mail, March 29, 1995. 17. NYT, “ Greece Yields Europe’s Help On Sour Note,” June 22, 1994, A3. 18. A notable case in point is the EU’s case against Greece for violating trade provisions. Greece was angered by the EU’s actions. The European Court of Justice later struck down the ruling. 19. This division has been noted by other scholars. In particular, see the two books published in 1995 that present the foreign minister’s and prime minister’s very different accounts of the diplomatic imbroglio. See A. Tarkas, Athina-Skopia: Pisw apo tis Klistes Portes and T. Skilakakis, Sto Onoma tis Makedonias 20. Financial Times, “US recognizes ‘Macedonia,’ ” November 5, 2004, 10. 21. Under NATO rules, membership expansion requires a unanimity vote, which gives the Greek government a veto over the accession of Macedonia. A similar situation exists with membership to the EU. 22. BBC, July 28, 2003, “Cyprus President Signs Ratification Instrument of EU Accession Treaty.” 23. Ilter Turan and Direk Barlas argue that for more than twenty years it was hard to establish a way forward in their relations amidst a situation of mutual distrust and suspicion. There was stalled progress on the issue, which led to heightened tensions between the two countries. See Ilter Turan and Dilek Barlas, “Turkish-Greek Balance: A Key to Peace and Cooperation in the Balkans,” East-European Quarterly 32, 4 (January 1999): 475–476. 24. Kathimerini, January 2, 2006. 25. To Vima, I Nea Protovoulia gia tin Kipro, March 9, 2008, A29. 26. NYT, December 30, 2006, “Obstacles in Turkey’s Path,” 18. 27. NYT, April 29, 1998 “Greek Cypriots to Get Missiles from Russians.” 28. Harry Dinella, “Imia, NATO and Alpha Centauri,” Woodrow Wilson International Center for Scholars, March 2001. Also found at http:// www.wilsoncenter.org/index.cfm?doc_id=138758&fuseaction=topics. documents&group_id=115869&topic_id=109941. 29. William J. Clinton, Compilation of Presidential documents, February 5, 1996, vol. 32, issue 5 “Remarks prior to a meeting with congressional leaders and an exchange with reporters.” 30. Discussion with Greek diplomats in the United States.

Notes

193

31. Recently, Metropolitan Anthimos argued that there should be one or two large protests against compromise on the issue of name, similar to those that took place in the early 1990s in Thessaloniki, but they have not materialized as yet. 32. ANTI, “I Athorivi Alla Ousiastiki Poria tis Ellinikis Akrodeksias: Ta Ixni kai ta Bimata” Noembrioy 1, 2007.

8 Trends and Prospects 1. The Irish economy received powerful endorsements from major Wall Street financial interests, in particular Morgan Stanley’s Euroletter in August 1994, which had a direct impact on jump-starting the Irish miracle. 2. Ralf Atkins and Kerin Hope, “Greeks set to pay price for feel-good years,” Financial Times, May 7, 1008. 3. See P. Kennedy, The Rise and Fall of Great Powers, New York: Random House, 1987; G. Arrighi, The Long Twentieth Century, London: Verso, 1994; and R. Kiely, The New Political Economy of Development: Globalization, Imperialism, Hegemony, London: Palgrave, 2007. 4. See C. Johnson, MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925–1975, Stanford: Stanford University Press, 1982; D. I. Okimoto, Between MITI and the Market: Japanese Industrial Policy for High Technology, Stanford: Stanford University Press, 1982; S. Callon, Divided Sun: MITI and the Japanese High-tech Industrial Policy, Stanford: Stanford University Press, 1995. 5. S. Haggard, Pathways from the Periphery: The Politics of Growth in Newly Industrializing Countries, Ithaca: Cornell University Press, 1990, 46. 6. For this debate you can look at J. E. Stiglitz, Globalization and Its Discontent, New York: WW Norton Co, 2003; J. A. Frieden and D. Lake, International Political Economy: Perspectives on Global Power and Wealth, 3rd ed. New York: St. Martin’s Press, 1995; M. Veseth, Globaloney: Unraveling the Myths of Globalization, Lanham: Rowman and Littlefield, 2005; R. Vayrynen, ed., Globalization and Global Governance, Lanham: Rowman and Littlefield, 1999; R. Schaeffer, Understanding Globalization: The Social Consequences of Political Economic and Environmental Change, 2nd ed., Lanham: Rowman and Littlefield, 2003; M. Paldam, “Economic Freedom and the Success of the Asian Tigers: An Essay on Controversy,” European Journal of Political Economy 19 (2003): 453–477; H. Hill, “Indonesia: The Strange and Sudden Death of a Tiger Economy,” Oxford Development Studies 28, 2 (2000). 7. The Guardian, “Protester Shot Dead,” July 22, 2001. 8. The Economist, “Globalization and its Critics,” September 27, 2001. 9. The Independent (Dublin), “Ireland Rated Sixth Richest Country in Global Wealth League,” Sunday Jan 21, 2007.

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10. Thomas Friedman, NYT, June 29, 2005. 11. M. Sommers and J. Corrigan, The Irish Economy, Dublin: National Treasury Management Agency Publication (2000): 2. 12. D. O’Hearn, Inside the Celtic Tiger: The Irish Economy and the Asian Model, London: Pluto Press 1998, 33. 13. Ibid., 56. 14. The Economist, Baltic Tiger, July 19, 2003 and The Wall Street Journal, Baltic Tiger, April 20, 2006. 15. The term “Dutch Disease” is used to describe the deindustrialization of a country in the aftermath of the discovery of natural resources, which then becomes the country’s sole provider of income, thus making the country vulnerable to the natural resource market cycle. See also Marek Tiits, “Technology-intensive FDI and Economic Development in a Small Country—The Case of Estonia,” TRAMES 11, 3 (2007): 324–342. 16. See Featherstone, K., “Varieties of Capitalism and the Greek case: Explaining the Constraints on Domestic Reform,” GreeSE Paper no 11, Hellenic Observatory Papers on Greece and Southeast Europe (February 2008); Pagoulatos, G., Greece’s New Political Economy: State, Finance, and Growth from Postwar to EMU, London: Palgrave, 2003, Pagoulatos, G. “The Politics of Privatization: Redrawing the Public-Private Boundary,” West-European Politics 28, 2 (March 2005): 358–380; Lavdas, K., The Europeanization of Greece, London: McMillan Press, 1997; Lavdas. K. “Interest groups in Disjointed corporatism: Social dialogue in Greece and European ‘Competitive Corporatism,’ ” West European Politics 28, 2 (March 2005): 297–316; Diamantouros, N. Politikos Diismos kai Politiki Allagi stin Ellada tis Metapolitefsis, Athens: Alexandria, 2000; and Pelagidis, T., ed., I Emploki ton Metarithmiseon stin Ellada: Mia Apotimisi toy Eksigxronismou, Athens: Papazisis, 2005, among others. 17. Featherstone, K. “Varieties of Capitalism and the Greek case: Explaining the Constraints on Domestic Reform,” GreeSE Paper no 11, Hellenic Observatory Papers on Greece and Southeast Europe, (February 2008): 16. 18. K. Featherstone, “Introduction: ‘Modernization’ and the Structural Constraints of Greek Politics,” West European Politics 28, 2 (March 2005). 19. INE/GSEE-ADEDY, Antagonistikotita kai apasxolisi: I anagki enos neoy anaptiksiakoy ypodigmatos, June 2005, 4. 20. See arguments in Kirtsos, G., O Mistikos Polemos ton Eksousion, Athens: Kastaniotis, 2003; Diamantouros, P., O Xrimatismos ton Politikon mas: Mia Geniki Theorisi Oloy toy Fasmatos Sinalagis Politikon-Politon, Athens: Dromon, 2004; Idrima Mesogiakon Meleton, Forologiko Kathestos, Paraikonomia kai Forodiafigi stin Ellada, Athens: Papazisis, 1993; Tsatsos, N. Paraikonomia kai Forodiafigi stin Ellada, Athens: Papazisis, 2001; Pelagidis, T. and M. Mitsopoulos, Analisi tis Ellinikis Ikonomias: I Prosodothiria kai I Metarithmisis, Athens: Papazisis, 2006, Featherstone, K., “Varieties of Capitalism and the Greek case: Explaining the Constraints on Domestic Reform,” GreeSE Paper no 11, Hellenic Observatory Papers on Greece and Southeast Europe (February 2008), among others. Danopoulos, C. and

Notes

21. 22. 23.

24. 25. 26. 27. 28. 29. 30. 31. 32. 33.

34. 35.

195

B. Znidaric, “Informal Economy, Tax Evasion, and Poverty in a Democratic Setting: Greece,” Mediterranean Quarterly 18, 2 (2007): 67–84. See Landy M., M. Levin, and M. Shapiro, eds., Creating Competitive Markets, Washington DC: Brookings Institution Press, 2007, 3. NYT, Ireland’s Prime Minister to Resign Amid Corruption Inquiry, April 3, 2008; or BBC, Ahern to Resign as Irish Prime Minister, April 2, 2008. Based on Transparency International’s annual report on global corruption in 2007, available at http://www.transparency.org/policy_research/ surveys_indices/gcb/2007 Maria Delithanassi, “I Metanastries Stirizoun ta Spitia mas,” Kathimerini, May 08, 2008 Nikos Itsines, “I Nees Politikes Grammes tis Eyropis,” Kathimerini, May 11, 2008. Grammi Karamanli gia Metopiki, Eleftherotipia, May 20, 2008. I am indebted to Panagiotis Avgoustis for the term. Ministry of Development, Annual Competitiveness Report, 2006. I am greatly indebted to Prof. Kyriakos Kontopoulos for his intellectual contribution and helpful suggestions regarding this section. The Economist, November 26, 1977, 82–83. http://www.whitehouse.gov/news/releases/2003/03/20030316–3.html See data provided by http://www.realinstitutoelcano.org/documentos/259.asp Bevan, A. S. Estrin and H. Grabbe, “The Impact of EU Accession Prospects on FDI Inflows to Central and Eastern Europe,” Policy Paper 06/01, European Bank of Reconstruction and Development. UCTAD, Global Investment Report: 2007, 11. Michael Dell, speech to the University of Limerick upon receipt of an Honorary Degree in 2002.

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Index Aegean Sea 140, 143, 177 Agricultural Sector 75, 111, 151, 153 Albania 23, 49–50, 53, 56, 88–90, 97, 120, 147, 177, 199, 200 Alivizatos 6, 48, 197 Alliance 86, 198, 207 Allison, G.T. 1, 2, 13, 83–84, 174, 188, 197 Archbishop Christodoulos 47, 49, 52 Asian Tiger Economies 150, 157 Asian Tiger model 153, 155 Assimilation 5, 51, 53, 55, 57 Athens 20, 25, 50, 52, 70, 73, 78, 83, 90, 110, 119, 124, 144, 164, 185, 186, 188–191, 194, 197–213 Balkan wars 94 Banking 7, 121, 122, 150, 163 Black market 107 Borzel, T. 4, 8, 9, 46, 84, 85, 95, 102, 105, 198, 210 Bucharest Summit 139 Bulgaria 89, 120, 121, 156, 161 Bureaucracy (Greek) 7, 19, 65, 73, 78, 144, 186, 212 Bureaucracy 7, 19, 65, 72–73, 78, 92, 144, 186–187, 212 Byzantium 87 Celtic Tiger 150, 151–155, 194, 208 Central bank 113, 120 Civil society 1, 6, 15, 59–60, 69, 71, 73, 77–79, 81, 83, 92, 143, 166, 174–175, 186, 212

Civil War 19–24, 27, 32, 115, 118, 147, 154 Clogg, R. 21, 133, 184, 186, 199, 203, 206 Cold War 20, 22, 24, 29, 31, 48, 80, 97, 125, 131, 132, 151, 187 Colonel’s Junta 13, 23, 24, 25, 26, 27, 29, 32, 34, 35, 40, 65, 86, 132 Collectivist 6, 57 Communist Party 23, 26, 31, 33–34, 39, 49, 107, 186 Confederation of Greek Industries 73 Conservative rule 32, 37, 68 Corporatism 64–68, 71–72, 194, 205 Cosmopolitanism 86 Couloumbis, T. 132, 145, 199, 213 Crime rate 54, 56 Cult of personality 31 Culture (Greek) 6, 13, 16, 43, 44, 214 Cyprus 5, 23, 25, 76, 86, 97, 99, 130–132, 140–145, 147, 156, 177, 192, 197, 203–207, 211 Danopoulos A. & C. 24, 25, 56, 174, 194, 200 Defense Spending 17, 75 Delta model 18, 164, 167 Democratic Consolidation 13, 16, 19, 25, 43, 202 Diamantouros, N. 6, 25, 33–34, 116, 188, 190, 194, 200, 202 Dictatorship 25–29, 31, 65, 68, 131–132, 211 DIKI 33

216

index

Dirigiste 19, 62, 114 Dyson, K. 4, 201 EAM-ELAS 20, 21 Economic and Monetary Union (EMU) 3, 36, 113, 130, 194, 201, 208–209 Economic Expansion 172 Economic policy 4, 15, 16, 27, 73, 96, 106, 178, 187, 209 Education Reform 119, 163, 171 ESOAB 122 Ethnic conflict 177 Ethnic exceptionalism 51 European Economic Community (EEC) 27, 34–35, 40–41, 82, 87, 106, 132, 133, 154 European Foreign Policy 125–127, 130, 135, 191, 199, 214 European Identity 14, 43–44, 53, 86–87, 89, 184 Eurozone 15, 36, 74, 78, 108–111, 113–114, 119, 160–163, 178 Featherstone, K. 1, 4–5, 159, 186, 194, 201, 210 Flockhart, T. 2–3, 201 Foreign Direct Investment (FDI) 121–122, 151, 154–155, 157, 164–166, 168, 170, 172, 176, 178, 191, 194–195 France 47, 51, 57, 85, 97, 103, 104, 113, 117, 127, 153, 185 FYROM 15, 17, 28, 53, 76, 86, 97, 120–122, 135–139, 145–147, 175, 177, 187, 205, 213 Gdp per capita 120, 150, 161 Germany 47, 49, 51, 85, 103, 105, 113, 119, 159, 189, 198, 200, 205 Global Production Networks (GPN) 164–165, 166, 168, 170, 172 GNP per capita 7 Greek-EU relations 107

Greek Europeanization/ Europeanization of Greece 3, 13, 15, 17, 70–71, 125, 173–174, 178, 179, 186–187, 194, 205 Greek Foreign Policy 17, 22, 76, 92, 94–97, 99, 125–127, 130–131, 133–135, 138–141, 146–147, 189, 192, 201, 203, 207, 212, 213, 214 Greek Identity 44–46, 48, 57, 87–90, 95 Greek Media 60, 89 Greek military 24–25, 132, 140 Greek miracle 110 Greek modernization 109 Greek Monarchy 22, 23, 24, 25 Greek Paradox 1, 13–14, 83, 101, 121, 124–125, 146, 173–174, 178, 188, 197, 201 Greek parliament 33, 36–37, 39, 48–49, 53–55, 68, 76, 116, 146, 159–160, 184, 190 Greek Security 132, 135, 200 Greek Socialist Party/Socialist Party of Greece 9, 15, 32, 35–38, 40, 48, 52, 69, 70, 76, 103, 115, 124, 130, 133, 146, 190 Greek Socialists 9, 29, 41, 76, 132, 203, 204, 209 Haralambis, D. 6, 202 Health care 7, 57, 83, 101 History book 39, 43, 51–53, 58, 76, 87, 175 Hooghe, L. 7, 202, 206 Human rights 54, 209, 210, 212 Huntington, Samuel 5, 6, 14–15, 24, 25, 45, 46, 185, 203 Iatrides, I. 22, 31 Imia 139, 143–144, 192, 201 Industrial Policy 193, 203 Industrialization 16, 91, 101, 117, 118, 151, 153, 164, 184, 194, 208 Industrialization Paradox 16, 91, 101, 117–118 Inglehart, Ronald 43

index

International Monetary Fund (IMF) 165 Intervention 9, 13, 19, 24, 29, 64, 65, 127, 174, 191 Interventionism 113 Interventionist 126 Investments fund 120 Ireland 47, 85, 93–94, 111, 119, 150–155, 157–158, 160–161, 165–166, 168, 170–172, 178, 193, 195, 199, 208, 209, 210 Kalyvas, A. 22, 31–33, 203 Karamanlis, Kostantinos (Kostas) 14, 23, 26–28, 30, 34, 35, 51, 76, 90, 116, 121, 132, 133, 139, 146, 183, 203, 210 Kazakos, P. 7, 35, 36, 103, 106, 107, 188, 204 Knill, C. 9, 10, 202, 204 Koskotas 70, 160 Kurdish Workers Party (PKK) 144 Labor Unions 67, 73–75, 117, 160, 163, 171, 174, 175 LAOS/Popular Orthodox Rally 33, 37, 38, 39, 48, 68, 159 Latvia 156, 159 Lavdas, Kostas 3, 7, 71, 73, 186, 187, 194, 205 Liberalization 4, 7, 9, 30, 54, 98, 114, 115, 123, 127, 157, 159, 163, 175, 176 Macedonia 17, 23, 28, 76, 86, 87, 90, 95, 108, 122, 135–139, 145, 146, 175, 177, 187, 192, 205, 213 Makarios 140 Mardas, K. 6, 29, 30, 35, 131, 133, 184, 206 Marks, G. 7, 202, 206 Mavrogordatos, G.T. 32, 67, 71, 73–78, 186, 206 Mazower M. 21, 22, 118, 183 Merchant culture 16, 91, 101, 118

217

Middle East 16, 18, 130, 168, 170, 172, 179, 203 Military Intervention 19, 24 Military Keynesianism 151 Ministry of Education 51 Minorities 47, 51, 53–58, 89, 99, 174, 185, 197 Mitsotakis Kostantinos 28, 136, 138 MNC 155 Modernization 5, 6, 7, 14, 16, 81, 92, 103, 108, 109, 113, 114, 164, 176, 184, 194, 200, 201, 207 Mouzelis, Nikos 6, 21, 103, 174, 184, 188, 189, 208 Mpratakos, A. 34, 35, 208 Multiculturalism 5, 50, 51, 55, 58, 59, 197 Muslim minority 54, 55 Muslims 51, 54, 55, 131, 185 National Economy 108, 166 National ID card 47, 48, 50 National Identity 14, 44, 45, 47, 50–53, 57, 58, 89, 175, 199, 211, 214 Nationalism 16, 37, 45, 50, 56, 68, 86, 91, 95–99, 117, 138, 139, 142, 154, 175, 177, 185, 197, 206 NATO 17, 30, 32, 40, 41, 52, 70, 75, 86, 106, 126, 132, 133, 139, 147, 183, 185, 189, 192, 214 Neo-Corporatism 66, 67 New Democracy (ND) 26–29, 32–35, 37, 38, 39, 40, 67, 69, 74, 107, 109, 114, 117, 134, 136–138, 163 Odhise Qenaj 50 Organization for economic cooperation (OECD) 56, 57, 120, 122, 150, 185 Organization of Petroleum Exporting Countries (OPEC) 106 Orthodox 32, 27, 45, 46, 47, 48, 58, 68, 76, 136, 138, 146, 175, 205

218

index

Orthodox Church 58, 76, 136, 138, 146, 175 OTE 62, 115, 190 Pagoulatos, George 1, 3, 7, 108–110, 113, 114, 174, 189, 190, 194, 208 Panhellenic Socialist Party (PASOK) 9, 13–15, 27–42, 51, 67–71, 76, 82, 90, 106–110, 114–117, 120, 130, 133, 134, 136–139, 144, 145, 163, 183, 184, 186, 190, 206, 207, 209, 212 Papahelas, Alexandros 21, 23, 133, 191, 209 Papakostantinou, G. 209 Papakostantinou, K. 136 Papakostantinou, Michalis 40 Papandreou Andreas 13, 20, 21, 23, 24, 29, 30, 31, 35, 36, 37, 39, 40, 41, 69, 70, 76, 82, 92, 96, 108, 113, 121, 130, 133, 134, 135, 137, 138, 189, 191, 203, 204, 206, 209 Papandreou Giorgos 20, 21, 23, 24, 29, 30, 31, 35, 38, 39, 40, 41, 70, 76, 92, 116, 120, 121, 133, 134, 135, 137, 138, 141, 145, 163, 189, 191, 203, 204, 209 Papandreou, Baso 116 Papas, Takis 26–29, 31, 33, 34, 41, 209 Papas, P. 209 Papaspyrou, T. 91, 209 Paraskevopoulos 78, 114, 175, 209 Parochialism 93 Petrakos, G. 6, 199, 210 Pluralist 65, 66, 71, 72 Political economy 113, 166, 193, 194, 199, 204, 208 Political Party(ies) 3, 4, 9, 14, 15, 17, 20, 25–33, 35–43, 55, 56, 59, 61, 66, 68, 73, 77, 79, 93, 99, 101, 103, 107, 109, 114, 119, 146, 158, 159, 174, 176, 184, 205, 206 Political Spring/POLAN 28, 33, 37

Politiki, Aniksi 28 Pollis, A. 5, 210 Populism 6, 13, 29, 32, 35, 68, 69, 186, 212 Portugal 35, 47, 57, 85, 93, 94, 102, 104, 109, 111, 119, 150, 159, 161, 162, 171, 200, 202, 208, 209 Privatization 108–110, 190, 194, 209 Protectionism 154 Public sector 69, 91, 119 Public Works fund 120, 121 Putman, Robert 51 Racism 54, 56, 58, 68, 197, 206, 213 Radaelli, C. 2–4, 9, 92, 95, 102, 104, 201, 210 Regional Development 119 Romania 89, 120, 121, 156, 197 Samaras, Antonis 28, 37, 136 Serbia 86, 97, 120, 207 Simitis, Kostas 31, 36, 70, 74, 92, 107, 108, 113, 114, 120–123, 141, 189–191, 211 Social exclusion 24, 54, 58, 106 Socialist rule 28 Sotiropoulos, D. 1, 7, 68, 69, 77, 78, 175, 186, 212 Soviet Union 20, 31, 65, 67, 79, 87, 135, 184, 203 Spain 46, 47, 85, 88, 89, 93, 94, 109, 111, 119, 127, 161, 162, 170, 198, 202 Spourdalakis, M. 6, 29, 32, 69, 212 Stamoulas, A. 5, 6, 49, 212 State intervention 65 State-society relations 15, 62, 64, 67–72, 79, 80, 83, 124, 214 Statism 5, 6, 13, 14, 63–66, 80, 91 Statist 6, 7, 14, 62, 65, 71, 102, 103, 115, 176 Statist model 3, 16, 103 Strike (activity) 74–76, 175 Structural Fund 198, 200 Structural issues 7, 159

index

Structural Reform 16, 39, 158, 159, 179 SYRIZA 37–40, 67, 115, 146, 159, 184, 186 Taxation 154, 156 Telecommunications 115, 121, 122, 163 Thessaloniki 44, 50, 62, 76, 120, 121, 146, 193, 214 Trade 65, 118, 133, 141, 151–153, 165, 171, 192, 207, 210 Transparency International 160, 195 Transposition 85, 103–105, 176 Treaty of Rome 138 Turkey 15, 17, 45, 53, 55, 89, 90, 95–97, 99, 127, 130, 133–135, 139–147, 177, 178, 192, 202–205, 213

219

United Kingdom 185 United Nations (UN) 128, 133, 141, 142 United States 12, 21, 23, 27, 29, 33, 40, 44, 45, 49, 51–53, 56–58, 72–76, 79–90, 96–99, 102, 130–135, 138, 139, 144, 151, 155, 160, 164, 166, 179, 187, 192, 199, 210 University reform 38, 39, 76, 163 World Trade Organization (WTO) 153, 165 Xenophobia 37, 54, 56, 58, 68, 213 Yugoslavia 23, 87, 127, 130, 131, 135, 136, 138, 177 Zahariadis, Nikos 30, 136, 138, 189, 192, 214