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Greeces Financial Crisis The Politics of Resolution and.doc
Greeces Financial Crisis: The Politics of Resolution and Reform
Professor Achilles Skordas, University of Bristol, UK
Introduction
Greece faces the greatest challenge since the restoration of democracy and the war in Cyprus in 1974. The challenge is economic and social, but, unless successfully managed, it may threaten the foundations of the political system, as well. Structural reform that needs to be implemented in the medium term – over the course of the next few years –if the crisis is to be put under control in the long haul. Such reform should extend to practically all areas of policy and should correct the long-established distortions and ‘conventional wisdoms’ of the economic, social and foreign policy of the country. The post-1974 Greek version of the welfare state that ensured stability and social peace for over a generation, has reached its limits, and cannot be repaired. It has to be replaced by a deeply reformed system which shall put the relationship between state and economy on a different and more rational basis.
At this critical juncture, Greece has the great advantage of having a Prime Minister openly and clearly committed to reform. George Papandreou has signaled his will to break with conventional politics since the end of 1990s, when he initiated, as a Foreign Minister, the ‘earthquake diplomacy’ that led to the Greek-Turkish rapprochement and to the definite removal of the threat of war that loomed for decades over Greece and Turkey. However, reform willingness at the top of the government is no guarantee for success, considering that the reformers do not yet represent the mainstream.
The government has to upset and subvert the still predominant ‘collectivist mentality’ of society, and contest old-fashioned habits. The majority of the people seem to understand the extent of the crisis and the challenges, but they do not yet endorse an agenda for fundamental change. The Parliament, including MPs of the ruling Socialist Party (PASOK), does not
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