Axel Sotiris Walldén_ the Build-Up to the Greek Crisis and Its Impact - Chronos | Economics

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This text is part of a Keynote speech delivered at the 7th Annual International Conference of “Humanity in Action”, Athens 23 June 2016. The last part has been added in January 2017.

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  1/28/2017 Axel Sotiris Walldén: The Build-Up to the Greek Crisis and its Impact - chronoshttps://chronos.fairead.net/walden-built-up-crisis 1/25 What is the state of this country, six years after the crisisbroke out and after six years of forced therapy? The Build-Up to the GreekCrisis an   From 2008 to 2015, Greece lost 26% of its GDP. This is oneof the greatest recessions ever recorded worldwide inpeacetime, comparable to the 1929 Great Depression. Other south European countries hit by crises registered cumulativeGDP drops ranging from 3 to 8%. And while these latter countries have been recovering in the past few years,Greece’s GDP remains largely flat since 2013. Today,Greece ranks 22 among the 28 EU member states interms of per capita GDP (in purchasing power parities),down seven positions from 2008.In terms of unemployment, Greece is the champion amongEU nations, with an impressive 25% in 2015, as against9.4% for the EU average and 4.6% for Germany. In 2008  nd ΧΡΟΝΟΣ #45, 25 Ιανουαρίου 2016 This text is part of a Keynotespeech delivered at the 7th Annual International Conference of “Humanity in Action”, Athens 23 June2016. The last part hasbeen added in January 2017. Axel Sotiris Walldén  wasborn in Athens in 1949. Hestudied economics inSweden and France and      ΧΡΟΝΟΣ #45 ΧΡΟΝΟΣ #44 ENGLISH ΑΡΧΕΙΟ DONATION/ΔΩΡΕΑ  1/28/2017 Axel Sotiris Walldén: The Build-Up to the Greek Crisis and its Impact - chronoshttps://chronos.fairead.net/walden-built-up-crisis 2/25 , level of 7-8%. Greece tops the EU list also with respect tounemployment among youth, which is 50%, as against 20%for the EU average. In 2008 youth unemployment was lessthan half as high in Greece (22%). And these figures do nottake into account the massive emigration, especially of educated young people, that is taking place since the crisisbroke out.The fall in incomes and living standards is even moredramatic than GDP figures would suggest. Wages andpensions have sometimes been cut by 50% or more, whileprices have hardly followed. Taxes have been raised. Publicservices, notably in the health sector and in education havedeteriorated sharply. Small enterprises and shops have beenclosing by the thousands. Poverty has risen sharply and anincreasing number of citizens have to rely on charity for their daily food. We have cases of pupils fainting in schoolbecause of malnutrition. The number of suicides has risen.Predictably, the most strongly affected have been theunemployed, but also middle strata. But inequalities havealso increased, meaning that there are also winners fromthis catastrophe. This is not the picture of a European country. And, surely,such a landscape of devastation cannot have been theobjective of policies intended to help the country! Yet, this iswhat they undeniably brought.Of equal importance is the prevailing mood in the country.Polls show that Greeks top the European list of pessimismfor the future. People can see no light at the end of thetunnel; they feel their children have no future in this countryand encourage them to emigrate. Such a climate is hardlycompatible with the necessary major national effort to  the University of Athens.From 1996 to 2014 he heldvarious posts in theEuropean Commissionrelated to enlargement andneighbourhood policies. In2000-2003 he served asCounsellor to the GreekForeign Minister on Balkanaffairs. Previously, he hadserved, inter alia , assecretary-general at theHellenic Ministry of NationalEconomy and as a visitingprofessor at the PanteionUniversity, Athens. Walldén has been teachinga post-graduate course atthe Institut d’Etudeseuropéennes of theUniversité Libre deBruxelles. He is the author of 15 books and a largenumber of articles inscientific reviews and journals mostly on Balkan,EU enlargement and Greekforeign and domestic policyissues. His latest books are Europe, the Greek crisis and the democratic left   (2014)and From Lapland to the Acropolis: the EuropeanItinerary of a Swede in the20th Century (2016).     ΧΡΟΝΟΣ #45 ΧΡΟΝΟΣ #44 ENGLISH ΑΡΧΕΙΟ DONATION/ΔΩΡΕΑ CHRONOS needs your support.  → DONATION (bank, paypal)    CLOSE  1/28/2017 Axel Sotiris Walldén: The Build-Up to the Greek Crisis and its Impact - chronoshttps://chronos.fairead.net/walden-built-up-crisis 3/25  .  The build-up to the crisis How did we get here? Well, for decades the Greek economy and society has beensuffering from serious structural deficiencies. Gone longsince are the days when this country posed as a capitalisttiger, successfully competing with its neighbouringcommunist states, albeit with an ailing democracy or evenwith military rule. Already in the seventies, Greece’seconomic dynamism started abating. Growth rates dropped,external balances became precarious, competitivenesseroded. A clientelist political system became a major obstacle to modernisation, protecting privileges, tax evasion,a highly inefficient and corrupt state and nurturing reformaversion. Accession to the EU in 1981 brought someelements of modernisation, but also had substantialperverse effects. Massive transfers from European fundsand a psychology of security within the EU created acushion of complacency which hid underlying problems.There were of course ups and downs, good periods and lessgood ones. The coming to power for the first time of asocialist government under Andreas Papandreou in the earlyeighties, in addition to the political liberalisation it brought,allowed for much-needed social reforms and thestrengthening of the welfare state, even though theeconomics of the new government were sometimes flawed.The second half of the eighties witnessed a rapiddegeneration of the socialist government, with scandals andcorruption attaining record levels and eventually leading to      ΧΡΟΝΟΣ #45 ΧΡΟΝΟΣ #44 ENGLISH ΑΡΧΕΙΟ DONATION/ΔΩΡΕΑ CHRONOS needs your support.  → DONATION (bank, paypal)    CLOSE  1/28/2017 Axel Sotiris Walldén: The Build-Up to the Greek Crisis and its Impact - chronoshttps://chronos.fairead.net/walden-built-up-crisis 4/25 political instability. In the early nineties a short-lived attemptby the conservative government under KonstantinosMitsotakis to implement a neo-liberal agenda proved an utter failure.The period 1996-2003 under socialist Prime Minister Simitiswere arguably the best years in our recent history. Simitismanaged to stabilise the economy and thus bring thecountry into the euro area, while ensuring rising livingstandards and implementing a social-democratic agenda. Bythe way, it is not true, as some foreign critics claim, that thecountry was smuggled into the Eurozone by fudging thestatistics. Some ‘creative accounting’ did take place, but itwas minor and fully comparable to similar practices by other Eurozone countries. In our times of generalised bashing of Greece, one should recall that in the early millennium yearsthere was general consensus that Greece was nowperforming well, in terms of economy, foreign policy andgeneral governance. Greeks remember this period as one of increasing prosperity, symbolised by the inauguration of theexcellent Athens Metro and the Athens peripheral motorwayin the run up to the Olympic Games; Balkan neighboursrecall the important 2003 EU-Western Balkan Thessalonikisummit. I personally remember highly flattering commentson Greece and its government by partners in the EUinstitutions. I even recall internal debates within the Greekadministration on whether we should adopt a tough line vis-à-vis Germany and France who had violated the Maastrichtcriteria!Simitis did not succeed in healing all the deficiencies of thepolitical system, though. Corruption, in particular, remainedhigh and probably even increased. Also, the general feelingwe were on the right path, contributed to underestimating theurgency of certain reforms. An attempt to overhaul the     ΧΡΟΝΟΣ #45 ΧΡΟΝΟΣ #44 ENGLISH ΑΡΧΕΙΟ DONATION/ΔΩΡΕΑ CHRONOS needs your support.  → DONATION (bank, paypal)    CLOSE
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