Σελίδες: xvi + 297
Σχήμα: 5.83 x 0.75 x 8.27 inches
Σελίδες: xvi + 297
Σχήμα: 5.83 x 0.75 x 8.27 inches
Greece’s (Un)competitive Capitalism and the Economic Crisis: Critical Thoughts Under the Lens of Social Policy
Greece’s (un) Competitive Capitalism and the Economic Crisis How the Memoranda Changed Society, Politics and the Economy, by Spyros Sakellaropoulos, Palgrave Macmillan, 2019.
Published online: 22 Jan 2023
The Great Recession of 2008 had a negative impact on the world, significantly worsening national economies and reducing citizens’ quality of life. For many scholars (e.g., McBride et al., 2016) the 2008 financial crisis represents a second phase of major social change, following the crisis of the Keynesian model from the 1970s onwards, which further strengthens the neoliberal welfare state. A large part of the literature1 argues that the Great Recession was used as an opportunity for significant social reorganization. At the heart of these changes was the residualization of social protection systems and the (re)commodification of social policy. Approaches such as neo-institutionalism, fiscal sociology and discourse studies have attempted to explain the effects of the crisis on the welfare state.2
Neo-institutional approaches argue that the established rules of the institutions did not provide procedures for balancing current budget deficits by national governments. In addition, they did not provide institutional means for tackling global imbalances, with the result that various models of capitalist development were reproduced in ways that caused recurring economic problems, such as the recent Great Recession.3 Other neo-institutional studies see the Great Recession of 2008 as the culmination of financial control processes initiated by the 1970 Oil Crisis.4
A second set of studies comes from the fiscal sociology approach.5 Wolff interprets the 2008 crisis as a consequence of the mix of the profit explosion after 1970, the expansion of the debt-driven financial system, and the real estate bubble. The phenomenon of over-indebtedness is studied by Lazzarato. The financial crisis of 2008 was a turning point for the complete transformation from the welfare state to the construction of the indebted person, a goal that has been pursued for four decades by the dominant economic and political forces.6 In addition, Streeck argues that the 2008 crisis is part of the deep process of restructuring the Keynesian capitalist model that began in the 1970s. The third approach examines the discourse constructed to legitimize the residualization of the welfare state. This category refers to the broader context that emerges in public discourse on the legitimacy of deregulatory interventions but also to the eloquent content that accompanies them.7
The European welfare states hardest hit by the crisis were those with weak capabilities to regulate their economies. Countries in the region, such as Ireland, Portugal and Greece, were more vulnerable. In fact, the debt crisis took the form not only of economic but also geopolitical control.8 The design of the Memorandums of Understanding (MoUs) was developed under the influence of a strongly technocratic mentality. Their adoption was aimed at serving multiple targets, such as reducing budget deficits and achieving primary surpluses, ensuring public debt sustainability, rescuing and stabilizing the financial system, boosting national competitiveness and lending from global markets.9
The implementation of rescue packages has largely focused on reforms of social protection systems. This was primarily due to the transfer of financial burdens to employees through wage cuts and the abolition of social benefits. Reductions in civil servants’ salaries, social benefits and pensions, increases in direct and indirect taxation and an emphasis on further labour market flexibility were the main axes of these reforms.10
In Greece, social policy was one of the first victims of extensive restructuring. Significant reductions in pensions and welfare benefits, restrictions on social services, the introduction of a fee for access to the national health system and in general the promotion of private health services11 were some of the extensive rearrangements of the Greek social protection system. Likewise, changes in the field of employment further aggravate the socio-economic changes at hand. The rapid rise in unemployment, the reduction of wages, both in the public and the private sector, the restructuring of collective agreements, the elasticity of labour relations, and the increase in uninsured work are just some of the developments that have contributed significantly to the impoverishment of Greek society.12
Spyros Sakellaropoulos’s work Greece’s (un) Competitive Capitalism and the Economic Crisis How the Memoranda Changed Society, Politics and the Economy offers a fruitful contribution to the debate. It does this in two main ways: first, it provides a radical positioning against the dominant interpretations of the crisis in Greece, shifting the parameters of discussion away from the ideological discourse of the ‘lazy Greeks’, the ‘over-inflated public sector’ and the ‘high wages that torpedo economic productivity’ to the real content of the class policies being elaborated under the hegemony of international capital and its representatives, in alliance with the most powerful sections of the local bourgeois order and against the interests of the popular majority. Secondly, the enormity of the stakes that appeared to be revealed in the Greek social formation was so conspicuous that for the first time in many decades the Greek bourgeoisie and the imperialist centres gave every sign of being seriously concerned about the repercussions that could be triggered by further extension of the social dynamic. Nevertheless, the failure to come up with any different proposals as an alternative to SYRIZA’s capitulation and the weakness of the remainder of the Greek Left exposed some significant limitations and a need to interpret them.
The added value of Sakellaropoulos’s study lies in his argument that ‘the Greek crisis cannot be seen independently of the 2008 world crisis. The latter is a result of the fact that it has not been possible to reverse the consequences of the 1973 crisis, while at European level the situation is being made worse by the reality that the euro has not succeeded in becoming the main global reserve currency, in conjunction with the fact that European productivity continues to lag behind that of the United States. What is peculiar to Greece is that the post-war regime of accumulation began to be problematic from the moment that the country joined first the European Economic Community (EEC) and then the European Monetary Union (EMU): the chronic competitiveness problem of Greek capitalism, deriving from the production of low-technology products, led to a rise in the trade deficit, but given that the other variables in the current account balance (tourism, transfers from the EU, remittances from the shipping sector) did not present similar problems, the situation remained manageable’.
Sakellaropoulos’s argument embodies the remarkable impact that the domestic scholarly literature has had. The development of the Greek welfare state deviates from the development model of the Western European welfare states, as has happened in the other countries of Southern Europe. There are significant differences in the level of interpretive approaches, compared to those presented at the beginning of this review. A large part of the bibliography of historical sociology attributes this fact to the peculiar development of Greek society. A central tool for understanding these issues is the concept of dependence, which is approached as a social phenomenon of the power relations between the Metropolis and the Periphery. To be precise, the concept refers to the negative effects of capitalist development in the countries of the Periphery and the investigation of internal class structures.13 The welfare state in Greece did not develop within conditions of normalcy and continuity.
It is significant, however, that the outbreak of the Great Recession of 2008 had multiple aggravating effects on the already existing dysfunctions of Greek society, something that is underlined in Sakellaropoulos’ argument: ‘But when difficulties arose there too, the crisis generalized, gross domestic product (GDP) contracted, the government deficit and public debt mushroomed and, in a turbulent international economy, Greece appeared to be on the verge of bankruptcy. Both for the Greek ruling class and for international capital the situation constituted a risk and an opportunity simultaneously: the risk was that the country would go bankrupt and the prevailing confusion would be uncontrollable’.
A presentation of the structure of Sakellaropoulos’s book in more detail is warranted. The first chapter deals with the international crisis of 2007 at both a global and a European level. In the second chapter, there is an examination of the causes of the Greek crisis, which is presented as a product of the combination of Greek capitalism’s chronic problems and the impact of the global crisis on the Greek economy. In the third there is an account of the eight austerity packages that ensued from the signing of the three successive Memoranda. The fourth chapter highlights the economic impact of these policies, with an emphasis on the historically unprecedented rapid fall in many indicators, not only the destruction of a wide range of productive units but also the existence of businesses and sectors that withstood the assault and had displayed a remarkable strength.
In the fifth chapter there is a description not only of the very serious social consequences brought about by the implementation of the Memoranda policies, but also a discussion of the social groups that benefited from the crisis. In the sixth we see the changes in the country’s social stratification, one of the side effects of the economic crisis. The seventh chapter emphasizes the concept of authoritarian statism, within which the ‘regime of exception’ has been taking shape in recent years, marking a qualitative change in the configuration of representative democracy. It is reinforced by the changes brought about by the neo-liberal shift in the institutions of the EU, which in conjunction with the Greek crisis has led to the emergence of a hybrid form of Greek state, a quasi-protectorate. The eighth chapter examines the reactions of the dominated classes towards the policies of the Memoranda, at the level of both social mobilizations and the creation of structures of solidarity. In the ninth chapter there is a discussion of the transformations in the party system from May 2010 up to the elections of September 2015, followed by an account of developments in the second period of the SYRIZA-ANEL government. The tenth and final chapter presents an evaluation of why the SYRIZA-ANEL government failed to cancel the Memoranda, followed by a discussion of the question of whether there is a new strategy on the part of the ruling class, the implementation of which will not restore the dysfunctions of the past.
While reading the book, I was particularly impressed by Chapters 5, 6 and 8 as they are useful critical reflections on the decade of austerity policies. Regarding the social impact of the crisis (Chapter 5), Sakellaropoulos argues that the implementation of the memorandum policies has increased social inequalities, imposed material deprivation on a large proportion of the population, greatly reduced wages and pensions, worsened employment conditions, spurred unemployment, downgraded healthcare conditions, reduced the population, and increased immigration. But there was also a group of very wealthy people who have seen their wealth increase.
Thus, the economic crisis brought about significant changes in the country’s social stratification (chapter 6). Sections of the bourgeoisie either disappeared altogether due to the bankruptcy of their businesses or they were relegated to petty bourgeois status given the contraction of their economic activities, a fact which led to the growth of the traditional petty bourgeois class. In contrast, some other sections of the bourgeoisie became more prosperous. The new petty bourgeoisie went into decline and, changing employment, former petty bourgeoisie joined the working class, whose proportional presence in the workforce as a whole increased significantly. The rural sector saw an overall contraction in all three social categories (rich, medium and poor rural strata), a development which is judged to have contributed to greater concentration of land ownership.
Social responses to the policy of the memoranda (chapter 8) are comprised of social mobilizations (including demonstrations, strikes, the squares movements, occupation of buildings housing public institutions) and the new forms of social solidarity that have emerged (trade without intermediaries, time banks, social solidarity clinics, co-operative ventures). All of these practices arose mainly during the 2010–2012 period, a time of anticipation in expectation of the coming to power of the SYRIZA government. After the capitulation of the summer of 2015, there was a period of social decline.
This book is therefore a valuable tool for understanding the structural parameters for the interpretation of the changes brought about by the memoranda in Greek society, but also in particular, for explaining the context of the residualization of social policy in Greece. The Greek social security system was built on shaky foundations with inherent dysfunctions: the fragmentation of institutions and services; inequalities in access to social benefits for different professional and social groups; client networks; the lack of will for bold reforms in the face of political costs; the reproduction of social inequalities; the inefficiency of social spending to tackle poverty; the distorted and financially unsustainable structure of the insurance system; and the weak presence of social and charitable structures.
The efforts at reforming the Greek social security system during the period of economic crisis led to the development of a philosophy that aimed at the convergence of the characteristics of social policy with the wider transformations that were occurring in the European welfare states. However, this is a race to the bottom, which consolidates a framework of residual social policies for the extremely poor and develops a privatized insurance coverage model for those workers who have access to it. The economic crisis and its management policies are the vehicle for the fulfilment of these deregulations, which lead to a type of social policy that does not guarantee, nor serve, the value of a dignified life for the citizens. In this light, the contribution of Spyros Sakellaropoulos provides the necessary broader dimensions for the interpretation of structural reforms in the field of social policy, but also in many other aspects of politics and the economy.
 Wolff, R. (2010), Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It, Second Edition, Northampton, Mass.: Olive Branch Press.
Streeck, W. (2014), Buying Time. The Delayed Crisis of Democratic Capitalism, London: Verso.
 Kourachanis, N. (2020), Citizenship and Social Policy. From Post-war Development to Permanent Crisis, London: Palgrave Macmillan.
 Iversen, T. and Soskice, D. (2013), “A Structural-institutional Explanation of the Eurozone Crisis, Paper Presented at the Political Economy Workshop at the London School of Economics, June 3, 2013, available at: http://www.people.fas.harvard.edu/~iversen/PDFfiles/Iversen&Soskice_euro2015.pdf.
 Heyes, J., Lewis, P. and Clark, I. (2012), ‘Varieties of Capitalism, Neoliberalism and the Economic Crisis of 2008–?’, Industrial Relations Journal, 43(3): pp. 222–241.
 Kotsonopoulos, L. (2016), The Lost Consensus. Welfare State, Capitalism and Democracy, Athens: Sakis Karagiorgas Foundation (in Greek).
 Lazzarato, M. (2011), The Making of the Indebted Man An Essay on the Neoliberal Condition, Los Angeles, CA: Semiotext(e).
 Hollanders, D. and Vis, D. (2013), ‘Voters’ Commitment Problem and Reforms in Welfare Programs”, Public Choice, 155: pp. 433–448.
 Fouskas, V. and Dimoulas, C. (2013), Greece, Financialization and the EU. The Political Economy of Debt and Destruction, London: Palgrave Macmillan.
 Kourachanis, N. (2021), ‘Social Change and the Greek Welfare State Crisis (2010–2020)’, Journal of Social Change, 13(2): pp. 45–57.
 McBried, S., Mahon, R. and Boychuk, G. (Eds.) (2016), After ’08 : Social Policy and the Global Financial Crisis, Vancouver: UBC Press.
 Petmesidou M (2013), ‘Is Social Protection in Greece at a Crossroads?’, European Societies, 15(4): pp. 597–616.
 Dimoulas, C. and Kouzis, I. (Eds.) (2018), Crisis and Social Policy. Deadlocks and Solutions, Athens: Topos (in Greek).
 Petmesidou-Tsoulouvi, M. (1984), ‘Approaches to the Subject of the Underdevelopment of the Greek Social Formation: A Critical View’, Synchrona Themata, 22: pp. 13–30 (in Greek).
THE ECONOMIC CRISIS OF GREECE AND TRANSFORMATIONS INITIATED BY THE MEMORANDA
Science & Society, Vol. 85, No. 2, April 2021, 270–280
The Greek crisis began in 2010 in the form of sudden stop in international lending. It shook the Eurozone, which decided to bailout Greece, primarily for reasons of its own stability, and imposed adjustment programs (the notori- ous Memoranda) as conditionality for loans granted. This turmoil led to the lengthiest and worst depression of Greece’s postwar history, with disastrous effects on income, employment, health, education and social conditions of life. In this essay I attempt to contrast the analysis of the causes of the crisis and its results provided by key Greek policymakers with that offered by Spyros Sakellaropoulos, a critical scholar and activist.
The Governor of the Bank of Greece (2014–), Yiannis Stournaras,1 pres- ents a brief synopsis of these dreadful consequences: between 2008 and 2016, Greece lost over one quarter of its gross domestic product (GDP), and the unemployment rate rose by nearly 16 percentage points. GDP per capita de- clined to 67% of the European Union (EU) average in 2017. As a result, there was a large brain drain, “depriving Greece’s society and economy of a highly productive segment of its population, with immeasurable demographic, economic and social consequences” (Stournaras, 2019, 128). I would add
1 Stournaras also served as Minister of Finance (July 2012 to June 2014) and Minister of Development, Competitiveness and Shipping (May 2012 to June 2012). He was a member of the negotiating team for the entry of Greece into the Eurozone. He is a Professor of Economics at the University of Athens.
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to the devaluation of human resources, the immense devaluation of fixed capital and natural resources of Greece, leading to wealth expropriation by private investors. Furthermore, adds Stournaras, “the deterioration in the macroeconomic environment and the slide of the GDP growth rate into negative territory raised the debt-to-GDP ratio to unsustainable levels despite the fiscal consolidation and caused debt-servicing problems for households and businesses. As a result, non-performing loans (NPLs) rose substantially, weakening the banks’ asset quality, thus making it difficult for banks to fi- nance the real economy. Resolving the Greek crisis took eight years, three economic adjustment programs, one major debt restructuring and three rounds of bank recapitalization” (Stournaras, 2019, 128).
Greece joined the European Economic Community (EEC) on January 1, 1981 with high hopes on the part of the conservative New Democracy (ND) government. In particular, then Prime Minister Constantine Karamanlis saw the accession “as a way of consolidating the newly restored democratic free- doms, as well as ensuring and furthering the social and economic progress of Greece” — a vision that was challenged and opposed by the Panhellenic Socialist Movement (PASOK) and the Communist Party of Greece at the time (Alogoskoufis, 2019, 2, 6). Nevertheless, “there is little doubt that the Greek economy was relatively unprepared for participation in the much more competitive EU economy in the early 1980,” admits G. Alogoskoufis, Minister in the ND government in the 2000s (ibid., 11).2 Greece became a member of the euro area in 2001, two years after the entry of the original eleven members, having made efforts through austerity measures in the 1990s (with PASOK in government since 1993) to adapt to the requirements of the Maastricht Treaty on the Economic and Monetary Union (EMU) of the EU (Vlachou, 1999). According to Alogoskoufis (2019, 2), the country made this adjustment “half-heartedly, as the policy mix that it adopted was inadequate and lopsided. With the exception of the first part of the decade, it was primarily based on monetary rather than fiscal tightening, while struc- tural reforms were few and in between.” As a result, with Greece’s entry into the euro area, “the problems of low competitiveness and fiscal weakness loomed large” (Alogoskoufis, 2019, 2). It is worthy of note here that when claims of underserving entry surfaced in 2012 in the parliaments of other eurozone countries, Costas Simitis, Prime Minister of Greece at the time of entry, and Y. Stournaras, chief economic adviser to Simitis at that time, intervened, asserting that
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in the mid-1990s, Greece made a formidable effort to meet the convergence criteria. It employed all available means: budgetary policy, monetary policy, income policy and extensive privatization of banks and public enterprises. the decision endors-
ing Greece’s eurozone admission was made after exhaustive scrutiny of the Greek economy and respective reports by the European Commission, the European Central Bank and the Economic and Financial Committee. (Simitis and Stournaras, 2012.)
On the other hand, several mainstream Greek academics and Cabinet members (including Simitis and Alogoskoufis) have challenged the Eurozone architecture. Alogoskoufis recently assessed that “the inherent weaknesses of the euro area, and in particular that fact that it is far from an optimal currency area, also played a significant part in the Greek crisis.” In particular, “some of the problems that plagued Greece were due to systemic weaknesses in the design of the euro area,” calling for reforms of the Eurozone (Alogoskoufis, 2019, 1, 38–42). Reforms in the architecture of the EMU are also proposed by Stournaras (2019, 133). In contrast, it should be noted with interest that many of the pitfalls and risks of the new (EMU) model to be implemented in EU and in Greece were critically debated and well known in Greece and Europe in the 1990s. For instance, the contributions of G. Katiforis, L. Kat- seli, G. Carchedi, C. Lapavitsas and J. Huffschmid to an edited volume by this author had skillfully anticipated the problems of the Maastricht Treaty and EMU, and offered an alternative to the EMU project (Vlachou, 1999).3 Looking for the deep roots of the Greek crisis, mainstream explanations focus on the economic policy cycles since 1980, and especially on the 1980s cycle of “destabilization and stagflation”: “Many of the current problems of the Greek economy, such as its low competitiveness and its high public debt, are the legacy of that decade” (Alogoskoufis, 2019, 45). N. Christodoulakis discusses the cyclicality of public spending and the propensity to increase public spending and tolerate lower revenues in elections times. In particular,
he asserts that
a long history of stabilization programs proved incapable of achieving a lasting fiscal correction and adequately raising competitiveness, as fundamental weaknesses in the economic and political system continue to play a corrosive role. The oversized public sector and the frequent indulgence in pre-electoral spending sprees in ex- change of political support led to protracted fiscal deficits and the accumulation of a large public debt. Equally, the chronic deterrence of productive investment by a multitude of regulatory inefficiencies resulted in a thin tradeable sector and large Current Account Deficits. (Christodoulakis, 2012, 22–23.)4
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For mainstream economists, it seems that fiscal stabilization (rapid or gradual) along with structural reforms in the forms of privatization, labor market deregulation, reduction in state involvement even in sectors as health, education and social security, dealing with the problem of non-performing loans (NPLs) of many ruined households and crisis-ridden firms are the solu- tion to the deep problems of the Greek economy. For Stournaras, this solution has been significantly achieved, in the words of Alogoskoufis (2019, 1), by “the externally imposed adjustment program” (Stournaras, 2019, 129–130).
Given the depth and length of the depression, one could hardly consider the Memoranda successful (at least from the standpoint of broader society), as Stournaras attempts to convince us. Stournaras attributes the protracted and deep depression to mistakes in the design and application of the aus- terity measures such as wrong assumptions of fiscal multipliers, delays of reforms, blanket moratorium on primary residence auctions and the abuse of foreclosure protection in the case of non-performing loans (NPLs) and the weaknesses of the Eurozone architecture (Stournaras, 2019, 128–129).
On the other hand, Christodoulakis is critical of the memoranda because of the collapse of growth, which in turn inhibits debt stabilization. He pro- posed an alternative scenario in which recession is tackled first and reforms (such as privatizations, which failed under the austerity programs) follow on a steadier path (Christodoulakis, 2012). Alogoskoufis also argues that “despite the great recession and the internal devaluation, competitiveness has not recovered sufficiently so as to bring about significant current account surpluses.” He proposes a new mix of policies for recovery, which should focus on competitiveness, prioritizing a revenue-neutral tax reform, restoration of the banking system (dealing, for instance, with NPLs), structural reforms to attract FDI and retrenchment of the public sector (Alogoskoufis, 2019, 43). Despite their differences regarding the accomplishments of the adjust- ment programs, Alogoskoufis, Christodoulakis and Stournaras concur that an exit from the euro could prove catastrophic for Greece. “Remaining in the euro area is the best and, probably, the only realistic option for Greece” (Alogoskoufis, 2019, 44). Approximately six decades after the formation of the EEC, no account is provided in the dominant mainstream narratives for systemic forces driving EU and global capitalism (such as fierce competition, free markets and creative destruction) which reproduce uneven development and unequal power balances between dominant internationalized capitals backed by their national governments. No understanding is offered that such systemic forces cannot be countered merely by appealing to policy changes
National Economy (October 2001-March 2004) of the PASOK Government. In the mid- 1990s, he worked on adapting the Greek economy to the requirements of the EMU. He is professor of Economics at the Athens University of Economics and Business.
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within the existing structure, or by calls for solidarity made by the weakest countries (in the inferno of crisis) to economically strong EU members.5
Spyros Sakellaropoulos’ book Greece’s (Un)Competitive Capitalism and the Economic Crisis: How the Memoranda Changed Society, Politics and the Economy, by contrast, takes a radical socio-economic standpoint, challenging conventional arguments.6 Its basic position is that the Greek crisis cannot be seen inde- pendently of the 2008 world crisis. When the crisis hit Greece, its economy was weak due to the problematic postwar regime of accumulation in Greece, and worsened when the country joined first the EEC and then the EMU. And when Greece was on the verge of bankruptcy, its membership in the EU became critical in the course of actions taken to handle the problem, argues Sakellaropoulos, who clearly perceives the class character of the EEC/EU. Educated as a sociologist but with multi-disciplinary knowledge, Sakel- laropoulos connects the Greek crisis to the 2008 international crisis rooted in the 1973 crisis and its aftermath, in the first chapter. Conditioned on the so-called liberalization of the banking markets, financialization and increased public borrowing became principal features of the new neoliberal model of capitalist expansion (Sakellaropoulos, 5). However, financialization intensi- fied old contradictions and created new ones, leading to a crisis which quickly spread internationally. Given the logic and the architecture of the EU and the EMU, each EU member could not provide liquidity to its shaking banking system unilaterally. Delayed and biased EU responses exerted great pressure on less developed capitalist countries such as Greece (ibid., 14–19, 259–260). Sakellaropoulos brings evidence that undermines the prevailing nar- rative, which attributed the gloomy economic situation of Greece to high wages, private consumption beyond income capacity, low worker productivity and public sector deficits (chapter 2). He argues instead that there are long- standing factors contributing to the current economic crisis. In substance, it is the growth path that has been primarily molded by capitalists for decades (relatively low wages, strong ship owning capital, a developed banking sector, tourism, European subsidies) which neglected changes in the productive
$119.99; paper, 84.99. Pp. xvi, 297.
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base such as shift to high-tech products, resulting in productivity differentials between Greece and other EU countries. Public deficits increased as the state, under capitalists’ pressure, reduced taxation for capitalist enterprises and other affluent social strata and resorted to borrowing. Consequently, the harsh irruption of the global crisis into Greece (the second important factor) worsened the precarious position of the Greek economy. Faced with the likelihood of bankruptcy, the PASOK government under G. Papandreou chose to ask for help from the EU, the European Central Bank and the In- ternational Monetary Fund (the Troika), getting loans and signing the first Memorandum in May 2010. While the author points rightly to the precari- ous development path of Greece as a major factor for the crisis, the forces of competition within the EEC/EU and the global market are not discussed in depth, nor are the choices actually available to Greek capitalists and the Greek state.
Many analysts, including Lapavitsas (2019), have correctly argued that this was the time (end of 2009 through May 2010) when Greece had real negotiating power to reach a beneficial agreement for debt settlement, an opportunity the Papandreou government missed. Such claims are based on the high exposure of foreign banks and investors to Greek debt, at that time, and the potential repercussions of suspension of payments. In tandem with such assertions, Sakellaropoulos argues that the Troika decided to offer loans out of consideration for its own stability and growth (Sakellaropoulos, 261). These loans were backed with three Memoranda prescribing eight pack- ages of austerity measures of neoliberal inspiration (chapter 3). The crisis and the measures imposed by the Memoranda had serious destructive economic effects on the country between 2009 and 2016 (chapter 4). On the other hand, there were certain developments to the advantage of lenders (in the sense of the increased capacity for debt repayment by the Greek state) or of certain domestic firms: primary budget surpluses, improvement in the current account deficit, and economic progress in certain sectors such as
oil refining, air transport, and auxiliary transport activities.
The social impacts of the crisis were severe (chapter 5): increased social inequalities, material deprivation for a large proportion of the population, worse healthcare conditions, reduced population, and increased emigration, especially of university graduates, mostly towards EU countries. In chapter 6, Sakellaropoulos discusses the significant changes in social stratification that the economic crisis brought about. Although I would like to see a much more well-defined social stratification in conceptual terms, I find the empiri- cal discussion quite illuminating. The crisis led to a reduction in the number of firms with personnel of ten or more people. This means that sections of the bourgeoisie either disappeared altogether or were relegated to petty bourgeois status. A considerable number of self-employed persons were
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forced out of their businesses and into the lines of the working class. The rural sector experienced overall contraction, a development that is assessed to have contributed to greater concentration in landownership.
There have been institutional transformations in the Greek state, which should be understood in the light of wider international changes in the nature of the state since the 1970s in tandem with structural changes in capitalist societies (chapter 7). The author speaks of authoritarian statism, a term coined by Poulantzas, capturing “a mutating form of the classical bourgeois representative state in which the institutions of representation are in the process of being downgraded” (Sakellaropoulos, 264). Greece is the most representative case of this process, given the continuous downgrading of institutions of representation in the era of the Memoranda. A number of internal government functions have passed into the jurisdiction of lenders and, in this sense, Greece is being described as a quasi–protectorate (see, for instance, Varoufakis, 2017).
The imposition of the Memoranda and the consequences of harsh aus- terity policies caused pain and despair but also gave rise to significant social struggles (chapter 8). At the same time, forms of social solidarity emerged to help the people in great need. After the giving-in of the Tsipras government to the Troika’s demands in the summer of 2015, there has been a downturn in social mobilizations and a disintegration of social organizations of opposition to the Memoranda. In my opinion, this was a great damage inflicted on the working-class and social movements by a left-wing government (by origination but not by doing) staying in power and implementing an austerity program. The crisis and the Memoranda brought about a stark shake-up in the political system of Greece, changing the balances of forces as represented by the party system (chapter 9). After the passage of the second Memorandum in 2012, the decades-long bipartisanship of New Democracy and PASOK col- lapsed and a new bipartisanship, more limited in range, emerged, involving New Democracy and SYRIZA. In January 2015, general elections brought SYRIZA to power. The latter promised — with an astonishingly simple politi- cal narrative for experienced left cadres, in my opinion — to put an end to the policy of the Memoranda and to restructure debt through negotiations with the Troika. Following the elections, SYRIZA formed a government to- gether with the right-wing party of Independent Greeks (ANEL). Despite the high hopes of SYRIZA in negotiations for an “honorable compromise,” the lenders proved adamant. Being deprived of any credible threat to the interests of the lenders in 2015, and unprepared to face an exit from the euro (threatened, at the time, by the Troika), the Tsipras government was
forced to sign a Memorandum (Sakellaropoulos, 247–248).
To understand the defeat of SYRIZA in the confrontation with the lend- ers, one has to look to the trajectory of the Greek Eurocommunist Left, of
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which SYRIZA is part. The Greek Eurocommunist Left adopted a favorable stance towards Greece’s accession to the EEC in the late 1970s, based on the argument that, despite its reactionary features, the EEC could be transformed into “People’s Europe” (Sakellaropoulos, 246). The Eurocommunist Left also adopted a favorable stance towards the EMU in the 1990s, despite its clear neoliberal nature. When the Greek crisis erupted, the neoliberal architecture of the EMU imposed its “iron rules” upon Greece, denying any alternative course for the country to exit the crisis. The fact that no EU member country came out on the side of Greece during the negotiations with Troika indicates that, albeit a socialist desideratum, “People’s Europe” does not exist in the present time. SYRIZA shares with other governing parties, in my opinion, a long-standing misinterpretation of the class nature of the EU/EEC, depriv- ing Greek people from developing the appropriate awareness needed for difficult choices that would enable radical social changes. Eventually, SYRIZA decided to sign another Memorandum, instead of refusing, stepping down and leading the country to an election. Austerity policies could be naturally implemented by other political parties (the conservative party or the neo- liberalized social democracy), in my point of view. A Left party could better serve its constituencies from the position of major opposition, if this was the result of the elections.
In the parliamentary elections of September 2015, after the signing of the third Memorandum, high abstention rates (44%) illustrated the loss of hope and the disillusionment with SYRIZA politics. Nevertheless, SYRIZA rose to power with the support of the social democratic constituencies, promis- ing to take the country out of the Memoranda and to legislate social relief programs. Many people voted in favor of SYRIZA out of fear, to avoid the worst possible outcomes, not out of hope.
Sakellaropoulos asks “Could things have turned out differently?” Prob- ably, answers the author and elaborates on certain conditions that had to be fulfilled in advance (252–253). “Naturally, none of this was done in the first six months of SYRIZA government, and everyone knows the results” (ibid, 253). Apart from whether the conditions suggested by Sakellaropoulos are entirely persuasive, it should be recognized that “a convincing and fully elaborated program” challenging the status quo is a tremendous task for any radical Left party, not just for SYRIZA. It would need the collaboration of many experts, politicians and social collectivities with confidence in social- ism. The responsibility of SYRIZA seems to lie in its failure to convene such a collaboration of forces — a deficiency that needs further elaboration but is beyond the scope of this review.
The first years after the Tsipras government’s compromise were char- acterized by the implementation of the Memorandum obligations, while enactment of any parallel poverty relief program could be but quite limited.
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Not surprisingly, after years of suffering imposed on people, SYRIZA was defeated by New Democracy in the parliamentary elections of July 2019. While in opposition, SYRIZA cannot be effective in its critique of the new administration; New Democracy keeps reminding SYRIZA that it followed the same economic policy framework for years.
The prospect for Greece appears to be a sluggish return to low growth rates, with a continuation of austerity policies and a high debt burden, as Sakellaropoulos describes (chapter 10). However, in this context, SYRIZA’s engagement with government unfortunately denotes a significant consensus among the main political parties in Greece on this policy, which is highly detrimental for underprivileged Greeks. Under conditions of intense global competition, internal stagnation and uncertainty, it is not surprising that the dominant class in Greece does not seem to pave a path of development radically different from the past, as Sakellaropoulos affirms.
In conclusion, this is a timely and significant book. It not only reviews the deep roots of the Greek crisis but it also provides a uniquely comprehen- sive assessment of the SYRIZA episode and links the experience with wider strategic concerns about social change elsewhere. Every scholar interested in the international and Greek crises, their causes and their aftermaths, ought to read this book.
Department of Economics
Athens University of Economics and Business Antoniadou Wing, 3rd floor firstname.lastname@example.org
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