Webcast Recap

Since military dictatorship ended 36 years ago, most observers assumed that Greece was growing in prosperity and progress. However, the current crisis indicates that Greece's recent history is far more complex. In order to understand the current state of affairs, John Koumoulides surveyed the transformation of Greece from its founding, to dictatorship, to the restoration of democracy.
After two world wars and a civil war that abated in the mid-20th Century, Greece's recovery was aided immensely by the United States, through technical and financial assistance. By 1956, accumulated assistance to Greece grew to over US $1 billion, much of it used to increase economic productivity. By early 1956, Greece was producing 40 percent more agricultural crops than it had before World War II, and its industrial output had grown by 86 percent compared to the pre-war period. With so much economic energy and progress, by 1988, The Economist magazine characterized Greece as "prosperous and progressive." This development seemed to culminate with Greece's entry into the euro zone in 2001.

Based on these successes, Koumoulides argued, Greece's ambition for the 21st century was to become a business and transport hub, linking southeast Europe to the EU market. However, entry into the euro zone brought a number of responsibilities which in turn required economic reform to allow for accurate measurement of economic performance. Unfortunately, Greece was only able to meet the "Maastricht criteria" through what Koumoulides characterized as "accounting finesse," since corruption and inefficiency were not addressed, and public debt would continue to rise. Nevertheless, Greece's international prestige continued to grow. In 2004, Greece hosted the Olympic Games and solidified its image as a competent and confident nation.

Four years later, the forest fires, political riots and anarchy turned the country into chaos. After the elections of October 2009, the newly-elected Prime Minister George Papandreou admitted to his EU counterparts that Greece's public finances were in disarray. This launched the country into more chaos and caused the EU and the IMF to step in to bail it out.

Besides economic turmoil, Koumoulides touches on the societal changes that have transpired in the country through emigration and immigration. In the last decade, there has been a wave of immigrants; both legal and illegal estimated between 850,000 to one million, that have not only put a strain on the economy, but also on the health and social institutions. Koumoulides also noted that migrants are changing the political landscape. Those who have become acclimated to the society come with their own demands that also affect the religious identity of the country. Inter-marriages have created the idea of a new citizen for the country as well. As with its European neighbors, Greece needs to find a creative, cost-effective way to deal with a burgeoning migrant worker population.

The current crisis, Koumoulides argued, is an opportunity to achieve a true transformation of the country. Koumoulides emphasized the need for citizens to stop blaming foreign entities for the country's homegrown problems. To be sure, migration to the country, with its enormous social, economic and political implications, should also be taken into consideration during this pivotal period. Reforms are necessary in order for Greece to address the problem of fiscal responsibility and to tackle corruption.

by Andri Peros
Christian Ostermann, Director, European Studies