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In the three years since the first edition of this ebook appeared, Greece has remained in economic and financial crisis and subject to the mechanisms of the international ‘troika’, as outlined in the final pages of the first edition. This was published in May 2012. The purpose of this Revised Edition is to give an account of the events of the following years, and outline some of the main choices that face the new Greek government led by Alexis Tsipras that was elected in February 2015. The election was caused by the failure of the Parliament to elect a new President of Greece, against a background of instability in the governing New Democracy led coalition. In the main I believe the analysis I put forward in the 2012 text has been borne out by events, particularly by the victory of SYRIZA with its independent Marxist orientation, arguably the first government of this kind to be democratically elected in mainland Europe since the time of the Popular Front governments in France and Spain in 1936.
I would like to thank all those who have been kind enough to discuss the first edition with me and correspond on particular issues. My editor at Penguin Eleo Gordon has been a source of reliable and perceptive advice over the many years since The Greeks: Land and People Since the War was first published, and she and other staff at Penguin were very supportive in the experimental new climate of digital publication three years ago. I am most grateful to them all. In Greece, it is likely that this crisis will continue in one form or another in the years ahead, and the fullest debate on the nature of it and the policy options available to governments and the European Union is desirable, and essential, to help secure a democratic and prosperous future for Greece.
James Pettifer
St Cross College, Oxford
April 2015
www.professorjamespettifer.com
About the Author
Preface to the Revised Edition
1. The Alchemist’s Years: 2000–2008
2. From Greek Crisis to European Crisis: 2009–2012
3. Years of Stagnation: 2012–2015
Some Background Reading
Some News and Political Websites
James Pettifer is a well-known author and academic. He teaches modern Balkan history at Oxford University and has published many internationally recognized works on the Balkans, including The Greeks: The Land and People since the War, The Turkish Labyrinth, The Albanian Question: Reshaping the Balkans (with Miranda Vickers) and The Kosova Liberation Army: Underground War to Balkan Insurgency 1948–2001.
The enterprise was then entrusted to two distinguished British officers, Lord Cochrane, who had seen service in South America, and Sir Richard Church, who had fought in Egypt, Italy and the Ionian Islands, where he had been wounded at Santa Maura and had made the acquaintance and gained the respect of Kolokotronis and other Greek chiefs. In the spring of 1827 these two foreigners were appointed respectively to command the naval and military forces of Greece
William Miller, The Ottoman Empire and its Successors, 1801–1927
The European Union and International Monetary Fund negotiators who sit in authority in Athens in 2012 have many antecedents. Men and women completely ignorant of the Greek language have played their parts in the making of modern Greece, with varying degrees of success. Their activities have taken place in historical time, with chronological dates. Some of these dates have been more important than others. Through the manner of his death at Missolonghi in 1824 during the War of Independence, Lord Byron ‘made’ modern Greece for many of his readers. He was following in the footsteps of many antiquarian explorers before him. They played an important part in building the philhellenic movement in support of the modern Greek state that emerged from the Ottoman Empire between 1821 and 1832. Yet for many visitors, and some scholars, the beauty and drama of the Greek landscape seems outside time, changeless. They follow the ancient philosopher Plato that in thinking that the Beauty is the Good. Greek material life glides by in seascapes, olive groves, rocks, honey cakes and white Orthodox churches. ‘Greece’ seems to have existed eternally (as the advertisements for vacations also say). But now Greece is in early twenty-first-century historical time of global capitalism in a financial, social and economic crisis that will affect the future of all of Europe. Why has this happened?
Greece is for many visitors the most Mediterranean nation of all, without the ambiguities of Italy, or the dominating concrete of much of the south of France. The pastoral way of life of the shepherds continues with goats and sheep plodding home in the evenings along tracks that have been used for thousands of years. But in the years since the Second World War Greece has experienced an urban revolution, accelerated by the effects of the European Common Agricultural Policy which after 1981 bankrupted tens of thousands of small farmers. The period of forced urbanization and tolerance of mass illegal building in the post-Civil War years after 1949 allowed the city to become a refuge for proletarian radicals who could survive and find work there when they would otherwise be persecuted by the police in the countryside. The city that grew had little or no public space, massive slums and overcrowding (central Athens has a population density to rival some African cities), and has continued to be dysfunctional. But from the point of view of political radicals, it is ideal, it preserves many of the conditions of a city like nineteenth century Paris. Many other displaced rural people moved into Greek towns and cities after European Union entry in 1981.
The Athens region has become a megalopolis with a very high proportion of the population of the entire country packed into it. But the later years of urbanization also seemed to be good years. Ever voluble Greeks crowded the cafés in the warm summer evening streets. It seemed a touch of an earthly Paradise had returned. The time after euro entry in 2001 seemed to confirm the view of optimists that the problems of Greek twentieth-century history had been ‘solved’. In philosophy, perhaps a marginal pursuit in EU nations like Latvia or Denmark but never in Greece, positivism had triumphed. The world of Germany where labour reforms enacted after 2003 produced a significant drop in the workers’ share of national income was very distant then from Greece.
For anyone middle-aged or older, the difficult years of the colonels’ junta of the late 1960s and early 1970s were far away. A growing rhythm of stability and progress had come to daily life. Some streets in Athens once full of bad-tempered traffic were pedestrianized. Greece seemed to be catching up with the rest of Western Europe, a dream of Greek intellectuals since the eighteenth-century Enlightenment. It was an attractive picture. Roads improved out of all recognition, a basic welfare state was constructed, expensive bottled water was everywhere, and the Olympic Games was held without mishap in 2004. Immigrants thronged into Greece both from Balkan neighbours and as far afield as Iraq and Afghanistan to work in the growing economy. As the financial writer Jason Manolopoulos has written in his book Greece’s ‘Odious’ Debt, in those years Greece ‘got lucky’ and
an unreformed Greek economy was accepted into the fledgling European Single Currency. The reasons for this were overwhelmingly political, with economic data fudged, as the European Union’s leaders emphasized establishing as wide an area as possible for monetary union as part of the European movement’s drive for full integration. Greece’s annus mirabilis was 2004: three years into Euro membership, the founding country of the Olympics hosted that year’s games. Economic growth had continued since entry into the Eurozone.
Although Manolopoulos is writing from the perspective of a hedge fund manager and within the assumptions of high capitalism, his unsparing and unsentimental account of the crisis in the financial superstructure is a commentary that casts much light on the mechanisms that drove events between 2001 and 2005. It also illustrates why even after the 2012 ‘bailout’ the crisis is not over. Greece suffered from the ‘Grand Illusion’ of European federalism as much as it had suffered from the ‘Grand Illusions’ of nationalist expansionist policy in the period around the end of the First World War when the Greek army invaded and occupied a large part of Ottoman Asia Minor. They sought to ‘redeem’ Greeks living outside Greece and bring them within an enlarged Greek state but the military campaign ended in disaster. Modern Greek history has been punctuated by periods of overwhelming cosmic optimism followed by defeat and disillusion.
The Euro currency ‘project’ did not originate in Greece. As Victor Hugo observed in 1855, the notion of a single European currency, like all bad ideas, had been around for a very long time. Most of its genesis has always been French with Napoleon Bonaparte an early advocate. As Bloomberg writer Matthew Lynn has pointed out, there are plenty of examples of currency unions to avoid, like the Latin Monetary Union that was created in 1865 and included France, Italy, Belgium, Switzerland and even then, Greece. It finally collapsed eventually in 1927 after a shadowy existence for many years. But history is not taken very seriously in many financial circles. In Greece, Europe and the single currency has meant something very different. The European project, for Athens, depended on a view of the unique Greek cultural mission to spread Hellenism throughout the European Union. In more recent world history, perhaps only Mao’s ‘Great Leap Forward’ in Communist China between 1958 and 1961 has a comparable mixture of political voluntarism and indifference to basic cultural differences and economics. After all, even since antiquity, Greeks have never agreed exactly what ‘Hellenism’ is. The use of the Greek language? Orthodoxy in religion? Democracy in government? Yet beyond these apparently interesting if not immediately fruitful speculations, the dark shadow of catastrophe was emerging, like a cloud over the Aegean Sea.
Imagining catastrophe is difficult. Modern social-democratic European politics has little room for the imaginary, in any shape or form; it is a terrain of social control, flipcharts, number crunching, endless economic forecasting, and mass production of technocrats. The collapse of Lehman Brothers would have been hard to imagine even a couple of years before it took place in 2008. Financial regulatory authorities did not anticipate it at all. It was outside the bounds of possibility. In the Greek political tradition, almost anything political is possible; in the European Union little is possible if outside the limits of centrist technocracy. Yet the scale of the current disaster would have been hard to imagine even in Greece itself. If anyone sitting in Syntagma Square in central Athens in May 2005 had been able to see ahead to their national crisis five years later, and told their friends in the kafenion that over their ouzo glass they saw national bankruptcy and mass impoverishment of a sizeable proportion of the population, they would have been regarded as drunk, or mad, or both. Yet five years later the café chairs and tables might have been destroyed by out of control fires and the customers choking on tear gas. Or perhaps it no longer exists, gone bankrupt like thousands of other Greek businesses. Yet this crisis did not drop from the sky as an eagle in Epirus might drop a sick lamb. It was made within capitalism as the illusions of political élites in both Brussels and Athens fed on each other. A hopeless over-optimism about what the European Union was or could ever be dominated their judgements and a sweeping belief in their own propaganda overtook them.