The Greek Crisis: a Tragedy in the Making - European Integration

Michalis Tremopoulos, the first Green MEP from Greece.

Greece,
as many other countries, has since 2009 faced the second phase of a
global-scale capitalist crisis, the sovereign debts crisis. The banks, after
being saved during the first phase of the financial crisis with government
money, then turned against their saviours by reducing lending for the
increasing sovereign debts, which ironically occurred for their sake.
Greece,
as the eurozone’s weakest link, was the first to experience the consequences of
this lending suffocation and was very rapidly led into a deep economic and
social crisis. There are two kinds of causes that are responsible for this
crisis: firstly, the problematic design and functioning of the euro as a common
currency, and secondly, the internal weaknesses and contradictions of the Greek
production model and political system. This article is mainly focusing on the
second kind of cause, that is, the internal element of the Greek crisis.

The
weaknesses of the economic model

The
global economic crisis of 2008 has found the Greek economy with several
fundamental weaknesses:

·
Reliance on ‘easy money’ (such as
from the stock market or property), as well as on over-inflated private
consumption, which has in turn relied on loans in recent years.

·
The disproportionately central role
of construction as the ‘driving force of the economy’ dating back to the 1960s.

·
Particularly high public debt, which
remains undiminished despite the widespread privatisations of the last 20
years.

·
Over-reliance on sectors directly
affected by the international crisis, such as tourism and shipping.

·
Excessive dependence on oil
consumption, an energy-wasting, pollution-generating energy model and the
prospect of high-cost ‘emissions rights’ from 2012 onwards.

·
Abandonment of mountainous and
disadvantaged regions, which represent two thirds of the country, and
overcrowding and overuse in the remaining third.

·
An absence of genuine protection of
natural resources in sectors such as water, forest land, fisheries resources
and the countryside and biodiversity.

Most of these weaknesses were tightly related to the economic model that
was designed after World War II and closely followed by all Greek governments
(socialist and conservative). The mainly socialist governments especially the
ones of the 1990s had envisioned a dynamic economy of services with a bright
future, initially the introduction into the euro area and then the 2004 Olympic
Games. The banks, the construction sector and retail based on imports would
form the foundation of this economy.   




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