The neoliberal experiment of the “Memoranda”: Greek exceptionalism or the mirror of Europe’s future?
George Katrougalos, Professor of Public Law, Democritus University
A-The “European patient”: A short genealogy of the Greek political system
A-1 A glimpse on history
A-2 Greek state and society
B-Memoranda: A neoliberal remedy, more lethal than the disease
B-1 An ideologically biased appraisal……
A-2 … leading to the implementation of unconstitutional, socially unfair and economically inefficient measures
The article challenges the foundations of the methodological axis of the book at both levels: First it argues that the dualism between “underdogs” and “modernizers” does not reflect accurately the basic dichotomies of Greek society, and therefore fails to explain the symptoms of the “Greek exceptionalism”. It is rather a version of the Orientalism/Occidentalism narration, which, as all exclusively cultural explanations of social phenomena, is ultimately oversimplistic and misleading.
The first part explores the relationship between the Greek state and society, explaining the basic causes of institutional dysfunctions and the weak legitimacy of public power. The economy was from the beginning state-driven because of the abysmal weakness of its productive basis and the eclipse of a strong national bourgeois class. It was not the expansion of the state that suffocated the economy but quite the inverse: the public power has just filled the vacuum of the absence of any substantial capitalist productive forces. However, it has never acquired the character of a Weberian, neutral administration, as it was from the beginning based on the satisfaction of clientelistic interests.
The second part analyzes the policies of “Memoranda”. It defines them as a mere repetition of the neo-liberal strategy of Washington Consensus, having little, if any, understanding of the real problems of the Greek economy. For this reason, the remedy has been more lethal than the disease. The Greek society has become a kind of “lab rat”, in the framework of a social experiment trying to explore the limits of societal resistance to “shock and awe” policies dismantling the social state. Therefore, the two camps of the raging battle are not actually modernizers and traditionalists, but rather proponents of neo-liberalism and defenders of the European social state.
A- The “European patient”: A short genealogy of the Greek political system
A-1 A glimpse on history
Flawed legislation, inadaptable to our morals
and our interests and its ruinous application by partisan state organs: these are the reasons for our lack of respect and contempt for our laws.
A. Antoniadis, The Municipalities (Τα Δημοτικά) 1866, p. 13.
Already in the 19th Century, Greek publicists, such as the aforementioned Antoniadis, and foreign visitors were describing the same grim situation: public administration was omnipresent and simultaneously distrusted by the majority of the population. In the same line, in one of the most influential reports on the Greek administrative reform, commissioned by the government, Prof. Georges Langrod stated the obvious, writing that "the vicissitudes of the h\istory of Greece (...) are the source of the discrepancies between the institutional framework and the reality and the persistence of popular mistrust and hostility towards the public power " .
Which are these “vicissitudes”? And how can one explain the paradox: the administration to be universally disdained, but seemingly all adult citizens to want to become civil servants? (Towards the end of 19th century the number of public servants per 10,000 population has been seven times greater than in the UK.).
First of all, one should take into account that the Greek state has been founded after a devastating, although victorious, revolutionary war against Turkey, on the ruins of a very poor, pre-capitalist society. It has thus become, by necessity, “the functional axis of economy” and an employer of first and last resort. As Comte de Gobineau was writing some decades later, "the entire population was thinking that if the state was the only one who had money, one should try to take advantage and work as a public servant."
During all 19th century this functional necessity for constant state intervention to the economy remained unchangeable. The very weak Greek bourgeois class was from the beginning obliged to ally itself with the traditional pre-capitalist strata, big landowners, local notables and Phanariotes. These early proto-capitalist elements, mostly merchants and ship owners, instead of cumulating capital through industrial endeavors were struggling for access to the state dividends. Their economic activities were not oriented to manufacturing but to banking and commerce, driving wealth by special relationship with the political apparatus.
This ‘comprador’ character of Greek bourgeoisie, its parasitic relationship with the state and its dependence on foreign capitals are salient features of the Greek ruling class. The state did not suffocate the private initiative; it has just filled the vacuum left by the inability of the former to function as an autonomous, independent economic actor. In this framework, the separation of society and state didn’t take place in the same manner as in the other European states. The fusion of political and economic power remained a constant of the system till our days, despite periods of fast economic growth that contributed to approach Greece to the European average, due to the ‘rent-seeking’ behaviour of the elites..
More importantly, the bourgeois modernizers of the Greek state, such as Trikoupis and Venizelos, did not break with this tradition. Instead, they have forged personal political alliances with magnates of their own making or choice (e.g. Trikoupis was a closed friend of banker Syngros, one of the main perpetrators of the state bankruptcy of 1893, industrialist Bodosakis had close ties both with Venizelos and Karamanlis).
In consequence, the division between privileged social strata having special access to state resources and the rest of the society is one of the constant institutional traits of the Greek Polity. This merge of public and private economic power through horizontal networks, leads to a very fragile legitimacy, for a simple reason: the relationships of power are not being legitimized by the seemingly impersonal forces of the market, but by direct political intervention.
In this ambiance both a protestant ethic of capitalist development and a rational, Weberian administration are impossible. Moreover, the “uncivicness” of political life has as natural consequence a permanent lack of confidence in the state as a neutral, impartial mechanism, at the service of general interest and a resulting generalized crisis of trust and legitimacy. Therefore, the question of hegemony cannot be resolved outside the sphere of the state with non political means.
The dominant classes have tried to substitute organic, institutional legitimacy either by constructing nationalistic mirages (such as the “Great Idea”, i.e. the political goal of annexing all territories with historic Greek populations to the fatherland) or by seeking cultural, economic or even direct political and military support to “protector” foreign countries. This tradition of reliance to “protectors” goes back to the Revolution, when the direct military intervention of the fleets of England, Russia and France in Navarino battle was pivotal for the independence of the Greek state. The British -and after the Second World War the Americans- have exerted since then a direct steering on the political and social life, which in some periods limited the political independence of the Greek state at protectorate levels.
One of the major poets of 19th century, A. Kalvos, describes vividly in his “Wishes” the popular resentment towards this kind of political tutelage:
“It is better, better,
The Greeks dispersed in the four corners of the world
To beg for bread with the hand extended
Than to have protectors.”
It is a common, but fallacious misunderstanding that this reaction hides a division between “modernizers”, proponents of the westernization of Greece, and “traditionalists”, defending the Balkan status quo. On the contrary, the reaction to the “protectors” was never limited to traditionalists but it has been widely shared by various political and social actors, primordially by the progressive and radical forces having as parallel goal the political independence and the socialist transformation of the country.
In a situation like this, the only way of popular legitimization of public power is the development of horizontal clientelistic networks, through non-programmatic, patronage oriented political parties. The generalization of the suffrage right to the male population, which took place already in the 1830’s (for the municipal elections), has given political clout to these parties, which functioned on the sole basis of control of the staffing and functioning of public administration (‘spoils system’).
This explains another paradox: why the undeveloped political system in Greece has expanded the electoral right much earlier than core European states? In the latter, the emergence of the mass parties is concomitant with the institutional response to the “social question” of 19th century: how could the market be made compatible with the extension of political and social rights, without a socialist revolution? Hence, the expansion of electoral rights was not possible as far as the working class remained a revolutionary “classe dangereuse”. On the contrary, such danger for the political system did not exist in Greece. Quite the opposite, the patronage-oriented politics, reinforced by the generalization of suffrage, were the basic pillars of political stability.
The schism between privileged strata, with access to state resources, and deprived ones has deepened in the period after the civil war (1946-1949, opposing pro-Western and communists), when the political prosecutions against the side of the losers resulted to a profoundly divided society. An extended chase of sorceress through a wide specter of authoritarian measures has forged a partisan, police state. “Certificates of sound social beliefs" were necessary for any interaction with the public services, even for the issuance of a driver's license and a passport or for participation at the university exams. The prosecutions, the deportations and the executions culminated many years after the end of civil war, as they were part of a systematic effort of restructuring of the political system. For instance, in 1957 -eight years after the end of the Civil War- 5521 citizens have been deprived of their Greek citizenship, compared to only 52 in 1951.
The purges in the public sector were widespread and systematic. During this period almost one third of public servants have been liquidated on reasons of political disloyalty. In order to cover the vacant posts but also to create new bonds of loyalty of wider masses to the state, recruitment in public service has ballooned. According to some estimates the percentage of employees and workers to the wider public sector reached at this time almost 50% of the working force.
This impressive extension of state apparatus did not coincide with the foundation of welfare state structures. The public sector has been reorganized according to a different sociopolitical goal: to build a social alliance between the ruling class and the new middle social strata of loyal public servants. The lack of a fully developed welfare state, together with the prevailing authoritarian and paternalistic policies, have shaped the symbolical collective image of the administration not to that of a benevolent father, as in the main European welfare states, but to one of a brutal gendarme.
The public deficit in the field of social protection coincides with a strong intrusion of the state in most sectors of social life. This prima facie paradox is the direct corollary of the predominance of patronage policies, which compel the state to intervene ad hoc and without any predefined strategy to every side of the socio-economic life, not in order to rationally regulate it, but for satisfying ephemeral clienteles. This leads to a highly fragmented income maintenance system, displaying an internal polarisation: peaks of generosity (especially regarding pensions) for privileged strata of the population, coexisting with huge gaps of protection. An important fraction of the population remained without effective social coverage, especially the ex-employed and unemployed, those in flexible forms of employment (temporary, part-time) and those working in the informal sector or having irregular jobs.
After the fall of dictatorship of colonels (1967-1974)  traditional clientelism, which was centered around local notables and MPs, has changed to a more bureaucratic, party-directed patronage, as the main political parties, the Socialist Party (PASOK) and the conservative party (New Democracy) have been gradually transformed to mass parties. With the ascension of PASOK to power in the 1980s the social expenditures have increased, at levels comparable –but still a bit lower- to these of the EU. However, the expansion of the welfare structures occurred in a period of general economic recession, contrary to the other European welfare states, which have flourished in the economic prosperity of the post-war “trente glorieuses”. By necessity, its funding has increased the public debt.
Moreover, the expansion of a highly fragmented pension system has once more been used for distributing differentiated entitlements to selected party clienteles, creating a highly collusive mix between public and non public actors and institutions. Public institutions continued to display a low degree of state power proper, as they are still highly vulnerable to partisan pressures and political manipulations.
A-2 Greek state and society
The majority of scholars see in the aforementioned institutional set-up a bipolar antithesis between a strong and “gigantic” state and a weak, "atrophied", "membranous" and "underdeveloped " society. This paradigm is currently under reconsideration, as oversimplistic and in many ways inaccurate. First of all, with regard to ideological hegemony, the Greek state is much weaker than the European average, because of its fragile, non organic legitimacy and the generalized lack of “trust” towards public and societal institutions.
Moreover, it is not “gigantic”, but irrationally organized, hydrocephalous in some areas and underdeveloped in others, especially in the welfare sector. As we are going to see in the next paragraph, both regarding the number of public servants and the total public expenditure, the Greek administration is, actually, below the European average. The distribution, however, of human and economic resources within it is highly problematic, due to the prevailing clientelistic policies, with basic predicament the underdevelopment of welfare structures besides the pensions and the health system.
More importantly, this theorization ignores the symbiotic character of political and economic elites. The image of a “dirigiste”, overwhelming “soviet” state, which suffocates a defenseless, weak but healthy entrepreneurial class, is completely ideological and misleading. As already exposed, historically the state has just filled up the vacuum left by the inability of the Greek bourgeois class to act as an autonomous economic agent and not as a parasite to the public purse. Even today, business collusion and dependence on the public budget define the rules of the economic game. The majority of Greek capitalists maintain privileged relationships with the power, regularly exchanging political influence with public money (e.g. mass media magnates who use their newspapers or television channels as leverage for gaining public contracts).
For the same reasons, the Greek society was never state-corporatist, at least not in the sense of the authoritarian state-corporatism of neo-fascist Spain or Portugal, where trade unions and other private associations have been organically integrated inside the State. The assimilation of the individual or societal institutions into an organic entity with the public power has remained alien to the dominant ideology, despite some efforts towards this direction by the short-lived dictatorship of Metaxas (1936-1940). It is an acute political incrementalism and not a hierarchical “organic” unity of private and public instances that prevails throughout the Greek history. Needless to say, this fragmented and rent-seeking character of interest mediation is also far away of the typical European social neo-corporatist pattern.
Last, but not least: the civil society has never been tamed in its totality and unconditionally surrendered to the bondages of patronage. There is a long history of social resistance and civil disobedience in Greece, politically expressed by a strong Left, with traditional links to wider social strata. At least once in the Greek history, during the resistance against the German occupation (1941-1944), this part of the society has become majoritarian. The National Liberation Movement (EAM) has developed in the liberated areas of the country genuine institutions of public representation and direct democracy. This historical project has been abruptly terminated by the subsequent civil war.