Greece: Tension between the pressure for reform and the state structure and institutions

My journey to Greece started at the London Heathrow Terminal 2. It was in the very late October last year. It was a three hour and a half flight by Aegean Airlines. My travel time to Greece was a far cry from warrior Odysseus' 10-year journey home to Ithaca (Ithaki), a Greek island located in the Ionian sea, from Troy, a place just across the Aegean sea now in Turkey. The story is told to us in Homer's epic poem The Odyssey.

Now-a-days, very short  travelling time is causing a boom in tourism all over the world. Since the second half of the twentieth century, Greece has become a major destination for tourists, mostly from Europe and a subject for travel writers in search of a European holiday paradise. The country is situated at the far south of  the south-eastern Europe, also known as the Balkans. The country combines the towering mountains on the mainland and over 1400 islands surrounded by azure waters. Tourism now is the shining light in Greece's otherwise dimmed economy. An estimated 32 million (including myself) visited Greece in 2018, up from 6.2 million in 1998 and 15 million in 2010. Tourism now contributes close to 23 per cent to gross domestic product (GDP) and employs 12 per cent of employed labour force. About a quarter of people directly or indirectly depend on the industry to make a living. Now there is growing fear that the country is likely to face the problem of "over-tourism'' causing serious strains on the existing infrastructure.

As soon as I boarded the plane, I felt like being in Greece already. The airline I was flying with is the flag carrier of Greece. The ambience inside the aircraft was very Greek including the food and beverage. I arrived in Athens in very late in the afternoon and I had the quickest exit through the immigration anywhere in the world that I have travelled, not more than 2-3 minutes. The city is in fair distance from the airport, I took a taxi to my hotel in Plaka, the very centre of Athens, also very close to the Monastaraki square and Syntagma square. As I entered my hotel room and opened the curtains, I could  see directly ahead the Acropolis, all lighted up. It was a magnificent sight to see. I even got a much better view of it when I went up to the hotel's rooftop restaurant. The following day the first thing I did was to go to see the Acropolis and the Museum. The Acropolis with its towering buttress walls that project itself dramatically skyward is the everlasting symbol of classical Athens and its golden age and its magnificence.

I also took a trip to Delphi, known  as  the navel of the earth or the centre of the world in ancient times, Zeus decided the  place to be centre of the earth. It was a three hour drive from Athens to see the Sanctuary of Apollo, also the  home to the famous Oracle and the Delphi Museum. The Oracle of Delphi, Pythia,  the high priestess of Temple of Apollo, used to give cryptic predictions. Alexander the Great visited Delphi to consult the Oracle before he undertook his military expedition to the East. The Oracle was practising her craft until the middle of the 4th century AD. I also took a day-long trip to visit three islands, Hydra, Poros and Aegina, a must do for anyone visiting Greece for the first time.

Whoever visits Greece for whatever might be the purpose, holidays or business, can not escape its magnificent past, because it is everywhere and where ever one goes. The historical and cultural heritage of Greece continue to resonate throughout the modern Western world - in its literature, art, architecture, philosophy and politics. Greece's significant contribution also extends to mathematics, astronomy, physics, geography, medicine and a whole lot more areas. Greece represents in many ways the very root and the very essence not only of the Western civilisation but also of modern human civilisation.

The post WW II history of Greece is rather very problematic and chaotic. The German occupation of Greece during the WW II and the civil war that followed the German defeat caused massive economic and social  crises and a long period of  political instability. The country also endured a period of military dictatorship. Eventually, in 1975 Greece emerged as a democratic parliamentary republic, now officially known as the Hellenic Republic. Greece joined the European Union (EU) in 1981. It has been a member of the US-led military alliance North Atlantic Treaty Organisation (NATO) since 1952.

Many analysts point out that Greece's joining of the EU marked the beginning of the Europeanisation of the country. The term Europeanisation is to be viewed in the context of European integration under the auspices of the EU. The process of Europeanisation entailed weakening of the position of the Greek  central state institutions while strengthening decentralisation and civil society. That process further accelerated since Greece adopted the Euro in 2002. These analysts point out that Greece appears to have been rather following  an "intended'' process of Europeanisation rather than a "responsive'' process like other south European members.  Also contemporary Greek politics reflects the tension between the pressure for reform and the state structure and institutions which inhibit the reform agenda.

All these factors contributed to the fundamental issue of governance. There are systemic weaknesses in state institutions. The political culture of clientelism and rent seeking (something people in South Asian countries  are very familiar with) largely contribute to the systemic weaknesses in state institutions. This has resulted in the absence of accountability, transparency and meritocracy. As the say goes in Greece, one has to have an uncle or know someone to get somewhere. Once one gets there, he/she remains there as in the Greek public service. In effect the public service is quite dysfunctional but there is a huge pension scheme for the recipients of political patronage. Pension payments accounted for a little less than 20 per cent of GDP and the public pension system remains under-funded. Also politics in Greece has for almost a century  been a family affair (a phenomenon also  quite well understood in South Asian countries) and dominated by families such as Papandreou, Karamanlis and Mitsotakis. In fact, a Mitsotakis is now appearing as the major contender for power when the election is held this year or next year.

Meanwhile, the Greek financial crisis in the wake of the Global Financial Crisis (GFC) brought to the fore the whole saga of the long period of mismanagement of the economy by successive governments. They continually misreported economic performance of the country which masked the extent of rising unsustainable levels of public debt. The current financial crisis was the result of a series of debt crises whose origin could be traced to the poor public finance management as reflected in excessive public spending and a taxation system riddled with massive tax frauds. The lack of  public accountability further added to the problem. While Greece has a very long history debt default over the last 200 years, the 2009  crisis resulted in the most prolonged widespread crisis, lasting longer than the Great Depression.

The EU and the International Monetary Fund (IMF) intervened with three bailout packages totalling close to 300 billion Euros in return for austerity measures. The impact of the austerity measures exacerbated the recession and its resultant consequences. Such measures partially stabilised the situation but overall results are mixed: Greece recorded 1.4 per cent growth in 2017, even achieved a very modest budget surplus, but unemployment remains at 22 per cent and one-third of the population live below the poverty line. The country's debt-to-GDP ratio still remans very high at 182 per cent.

The Greek debt crisis almost verged on a national emergency. It also triggered unprecedented level of political crisis leading to the total realignment of the party system where the old established parties, such as PASOK disappeared. In this vacuum, SYRIZA, a radical left, emerged but turned into left populist party under its young and popular leader Alexis Tsipras who has turned into the major power broker in Greek politics now. He forged a parliamentary alliance with populist radical right party ANEL as junior partner. But the ANEL leader Panos Kammenos, who was also the Defence Minister, bolted the government over the name change issue with Macedonia.  But Mr Kammenos has become just an irritant for Mr Tsipras than a threat. Tsipras' real worries lie in the  current uncertain political and economic climate in Germany and  France in particular. That will likely to play out in the forthcoming European Parliament election and the national election to be held in Greece. Meanwhile,  Mr Tsipras  got  a morale boosting from one-day visit from German Chancellor Angela Merkel this January and she showered praise on him.

Last year, eight  years after the crisis began, Prime Minister declared  "Greece is once again a normal country regaining its political and financial independence''. But the crisis is not over yet and difficult time remain ahead. With youth unemployment at 50 per cent, young people are leaving the country in droves as they see not much future in the country. An estimated half a million Greeks, nearly 5.0 per cent of the population left the country since the crisis began in 2009.

Despite very harsh economic conditions over the past few years, Greeks have shown great generosity and kindness in receiving thousands of desperate and destitute refugees whom no one elsewhere in Europe wants. Greece has shown us how to be humane and behave in a civilised manner even when the country is faced with daunting challenges. 

Muhammad Mahmood is an independent economic and political analyst.

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