The Collapse and Transformation of the Greek Party System

Jannis Kompsopoulos and Jannis


Greece has for more than four years been the focus of discussion about the causes of the Eurozone crisis. It has also been a real-life social laboratory where new policy tools for fighting the crisis have been implemented. These are supposed to save the European banking system, to guarantee that investors will get what states and other debtors owe them, and to ensure that the EU (European Union) will remain a powerful global actor. All this has been done at the expense of the overwhelming majority of the people of Greece, as well as of numerous other countries. These proceedings of course have led to massive rejection of this policy and of the actors who pursue it – domestic parties and politicians as well as the Troika (a supranational body consisting of the IMF, the European Commission, and the European Central Bank).

Greece is a peripheral state incorporated into the capitalist world economy through the framework of the EU. Restructurings inside EU member states have to be understood as part of the transnationalization of their state models. The speed, depth and direction of this transformation are determined by political struggles whose outcomes are tightly linked to the balance of forces between different social groups. The transformation of the Greek economy into this mode of regulation from an earlier “Keynesian mode with paternalistic features” (Rapti 2007) was facilitated by domestic bourgeois classes acting as intermediaries between the interests of big foreign (mostly European) capital and the internal structures of accumulation and regulation.

The starting point of this analysis is the concept of the Dollar-Wall-Street-Regime, which describes the contemporary stage of development of world capitalism. Its two main pillars are the role of the Dollar as a world reserve currency, and the ability of financial actors to unrestrictedly move and gain access to financial assets whenever their plans of profit-maximization demand it (Gowan 1999). This in turn fortifies the dominant position of the USA in the world economy and geopolitics. The political and economic elites of Europe accepted the leading position of the USA and began to incorporate their countries into this system in order to consolidate their subordinate position as a regional power (Cafruny/Ryner 2007). Every major step of economic policy taken since the Treaty of Maastricht (1992) serves this agenda.

The Greek crisis is a concrete expression of the global crisis of capitalism. In Europe, the crisis was channeled and deepened by the development of the EU and the common currency. The loss of monetary policy sovereignty magnified the asymmetries between stronger and weaker economies inside the European Monetary Union (EMU), which gave an additional drive to the de-industrialization processes in countries like Greece, Italy, Spain and even France. This contributed to a fragile situation, where state expenditure became an important stimulus for (financialized) growth and where the Southern European economies were unable to restore accumulation and thus plunged into depression.1 Contrary to the hopes of some alternative economists, the crisis led only briefly to a return to Keynesian economic policies. State regulation in all its forms remains a tool in the repertory of bourgeois crisis governance, but making it the dominant paradigm for economic policy is simply not an option for decision-makers. It is now increasingly clear that the ruling elites' reaction to the crisis is not a renunciation of previous neoliberal policies but rather their radicalization.

A New Phase of European Integration

European integration evolved through two distinct phases before the Great Recession. These can be termed the Keynesian-anticommunist phase and the neoliberal phase. The first phase, primarily pursuing economic integration for political reasons, began in 1951 with the European Coal and Steel Community. This “European community” served well the myriad interests of the major national actors: Western Germany needed it to reclaim its sovereignty after World War II, France wanted it to better exercise control over German heavy industry and to prevent any future threats from Germany, and the US supported it as a pillar of its containment and rollback strategy against socialism. Although economic integration was based on free-trade guidelines, the capacity of member states to control and regulate economic development in the broad sense was maintained at that time. This began to change in the 1980s, with significant milestones being the Single European Act (1986) and the Maastricht Treaty (1992). Since then, political competencies have increasingly been shifted from the member states to the European governance level, especially the Council of the European Union (Council of Ministers) and the European Commission. Annual public deficits of more than 3% and public debt of more than 60% were forbidden by the Stability and Growth Pact of 1997. The construction of the Eurozone was based on German policy preferences: substantial transfers between countries were excluded and common monetary policy was based on the “independence” of the European Central Bank (ECB) – “independence” entailing its exclusive commitment to the target of price stability.

These institutionalized governance mechanisms were viewed in the late ‘90s as elements of a “disciplinary neoliberalism” and “new constitutionalism” (Gill 1998). Already then, a tendency toward more authoritarian forms of governance – bypassing parliaments and the power of nationally based unions – was visible. However, the main focus at that time was “negative integration”: removing nation-states’ regulation of the free movement of capital, people, commodities and services (Scharpf 2008). This has also been called a “Ricardian” form of integration because economic interaction between member states was based on “comparative institutional advantages” of European “varieties of capitalism” (Höpner/Schäfer 2010; see also Hall/Soskice 2001). Strong economies with a broad industrial base and export-driven growth gained further advantages while weaker economies like Greece had to find other ways to accommodate themselves to the new institutional pattern.

The concept of uneven development here takes on an added dimension, as Greece, following the fall of the right-wing military junta in 1974, embarked on a specific kind of Keynesian politics including construction of a welfare state – a class compromise which promised broad legitimation. Previous right-wing policies of repression at home and NATO-alignment in foreign policy had undermined the government’s legitimacy. The new approach responded to demands for political freedom, social justice, and higher living standards. The tension resulting from decades of authoritarian rule could thus be reduced, thereby warding off demands for further change from a significant portion of the Greek population (Pagoulatos 2003: 88). These developments occurred at the same time that the more advanced countries started to unravel their own welfare states and Keynesian policies in the aftermath of the 1973 crisis and the breakup of the Bretton Woods system. In Greece, neoliberal policies did not gain significant momentum until the second half of the 1990s, in the wake of its Eurozone entry. The EU’s institutional framework proved its effectiveness in Greece as well by making it all the more difficult to pursue policies other than neoliberal ones (McGiffen 2011).

Currently, a new phase of European capitalist integration is beginning. It has been termed “Post-Ricardian” because European governance tends to eliminate institutional differences of national capitalism in favor of a single, neoliberal mode of governance for all EU members (Höpner/Schäfer 2010). We, however, want to focus on a different aspect of the current shift and therefore have termed it “authoritarian positive integration” (Kompsopoulos/Chasoglou 2013a). In contrast to the practice of recent decades, “negative” measures such as deregulation and trade-liberalization are now no longer at the center of the integration project. Instead, we witness a strong centralization of power and decision-making in the executive organs of the EU – hence, “positive integration,” because new common institutions are formed (without removing old, nationally based ones). But above all, it is a strong shift toward authoritarian governance.

The shift of governance from a national to a supranational level entails a strong class bias. Whereas working people in many European countries still have some organizational and bargaining power at the nation-state level, they lack such power at the European level. Every shift of decision-making to supranational bodies thus reduces the capacity of working people to influence or resist policies that affect their lives. The developments in this direction are numerous and can only be named here:2

* the shift of elite decision-making from formal channels to informal groupings; * the turn toward “European Economic Governance” and mechanisms including the EU’s constitutional commitment to permanent austerity, the “European Semester,” the “Euro-Plus-Pact,” the “Sixpack” and others;3 * the “fiscal pact” which generally outlaws public deficits, opening the door to further liberalizations, cutting of wages and pensions, etc.; * discussion of a “banking union” which will in reality be a union to bail out banks by European rather than national institutions (see Zeise 2012); * ouster of the elected governments of Greece (Papandreou) and Italy (Berlusconi) and their replacement by “technocratic” problem-solvers (the former bankers Papadimos and Monti) who are more reliable in the eyes of European elites; and * the shift of public discourse toward more open propagandizing of authoritarian solutions.

German chancellor Merkel, one of the staunchest proponents of austerity, has openly called for a “democracy that conforms to markets” (Löwenstein 2011) while mainstream newspapers demand increasingly regressive economic policies. In European core countries like Germany, politicians like Merkel and the mass media have fostered nationalism and chauvinism by launching a broad campaign against “lazy Greeks and Portuguese” – with alleged “luxury pensions” and abundant holidays – who are then contrasted with the hard-working Germans who allegedly had to pay with their tax money for the Southerners' failure to make a “sound” financial policy. Although most of these claims were outright lies which would have been easy to refute with official statistics,4 only few media outlets – almost none of them belonging to the mainstream – dared to contradict them.

The most radical expression of “authoritarian positive integration” is the “Troika,” a supranational body consisting of the IMF, the European Commission and the ECB. Most of the countries that have been unable to meet their financial commitments and needed European assistance in order to prevent state bankruptcies and major impacts on the European financial systems, including possible chain reactions, had to subject themselves to the Troika's directives. Since then, credits are only provided under strict conditions. While Spain has been exempt from this procedure due to its size and importance, Greece, Portugal and Ireland have since been governed in accordance with Troika orders. It is, however, too simplistic to declare this just a sign of Southern European elites selling “national interests” to some sort of foreign (above all German) “neo-colonialism,” as is frequently claimed by critical authors. In fact, large parts of the elites have made European integration their strategic choice in order to enhance their own position in international competition and the domestic balance of forces. This entails a willingness from the Greek elites’ side to subordinate themselves to the strategic interests and investment decisions of the elites in the European core who in turn, as already highlighted, have relatively subordinated themselves to the US elites.

This subordination of Greek elites, however, is a relative one, in which they are attempting to improve their position in relation to other fractions of capital. Greece occupies an intermediate position in the global and European power hierarchies and is therefore not in a state of absolute dependence. Until the outbreak of the crisis, Greece enjoyed a financialized debt-driven growth with relatively high rates and positive employment effects. The interests of the Greek elites are compatible if not identical with the interests of the other EU elites above all regarding the financialized character of the European integration project. This of course does not mean that these interests are for the “common good of the nation” i.e. the other social strata of Greek society and the overwhelming majority of the Greek people. In Greece, the entrepreneurs' association SEV has supported austerity and the downsizing of the public sector right from the beginning in order to enhance the competitiveness of Greek businesses (Rizospastis 2011). Moreover, most measures agreed on in the memoranda with the Troika have to be confirmed by national parliaments and can count on the votes of the majority of deputies – even if this is achieved by a state of permanent blackmail à la “either memorandum, or disaster”.

The transformation and demolition of a “Southern” welfare state

The task of the Troika in Greece (as elsewhere) is a radical restructuring of society along neoliberal and authoritarian lines. It aims at radically reversing the correlation of forces in Greek society and forcing through a series of reforms that have not been possible in the past due to massive popular resistance. Austerity in Greece at the same time aims at generating new income for the state and cutting its expenditure, with the focus clearly on the latter. Greece’s “reforms” so far have led to a decline of real GDP from 2008 to 2012 by over 20%. While the current account deficit was reduced from 15.6% in 2010 to 6.2% in 2012, the ensuing fall in domestic demand was more than 6%. At the same time unemployment reached in rapid succession one record level after the other and stood in the first nine months of 2013 between 27 and 28% and at about 66% for people under 25 according to official statistics, which are widely known to be fraudulent. Between 2009 and 2012, real wages annually decreased by about 5%. This is the so-called “internal devaluation” which is the improvement of competitiveness by wage reduction. As a result the at-risk-of-poverty rate stood at over 30% in 2012, and with an S80/S20 inequality ratio of 6.0 in 2011, Greece belonged to the “top five” of the most unequal countries within the EU (Benchmarking Working Europe 2013). It has become the third poorest EU member state (Ta Nea 2013). Public healthcare is in a disastrous state as most hospitals are basically bankrupt and social security funds are severely endangered, threatening hundreds of thousands of people in need with the total collapse of social benefits (Rizospastis 2013; Alderman 2012).

Crushing the strong unions, especially the militant and class-oriented ones, is another important aim. Unions were able to stop several attempts at neoliberal restructuring in the past, and the presence of a powerful anti-capitalist wing inside the union movement might be the only real threat to current policies and to the system as a whole. This is why freedom of association is being gradually undermined: the majority of strikes are declared illegal by the courts and now on several occasions, the threat of imprisonment has been employed to get striking workers back to work. Industry-wide collective bargaining has been ended, thus weakening unions' bargaining power and in the long run also their political power.

Huge parts of public property are being privatized and are supposed to generate additional income for the state so that it can pay its debts. This encompasses airports and ports, roads, land, airlines, the last remaining manufacturing sectors e.g. in the defense industries, etc. As a result of the crisis and these policies, poverty has strongly increased, as have homelessness, prostitution, suicide and emigration rates, and even malnutrition.

To summarize, the core element of current policies in Greece is a frontal attack on the welfare state. What has often been regarded as a typical example of a “Mediterranean” or “southern” welfare state (Rapti 2007) is now being transformed into a competition-oriented workfare state, which will be characterized by at least three features. First, its financial volume will be considerably smaller. Second, the relationship between its commodifying and its de-commodifying functions (Lessenich 1999, 424) will be redefined in favor of the former, as the commodity character of labor power is reinforced through the weakening of collective bargaining, a turn towards reduced workplace protection, the raising of the retirement age, and other similar measures (Schoemann/Clauwaert 2012). Third, the market efficiency of state apparatuses is to be improved by lowering their costs and superseding their institutional fragmentation through a series of reforms in administration, healthcare, justice, etc.

As this transformation of the state imposes enormous costs on the majority of the Greek population, it obviously has a profound political impact. It not only reduces living standards, but destroys the very foundations of the class compromise of the post-dictatorship period – which is what has tied the electorate to the two major parties for three-and-a-half decades. The party system has thus been plunged into chaos.

Changing patterns of regulation in the wake of EU integration

Following the fall of the junta in 1974, the conservative prime minister Constantinos Karamanlis founded a new center-right party, Nea Dimokratia (New Democracy), which, in the traditional manner of the old dignitary-style parties of Greece, was mainly centered on his person. He began rebuilding bourgeois democracy without embracing the center-left and communist parties’ positions. He monopolized the transition process partly by excluding PASOK (the Pan Hellenic Socialist Movement) and the KKE (Communist Party of Greece) from the drafting of the new bourgeois-democratic constitution. At the same time, by legalizing KKE, he split and thereby weakened the left (Sassoon 1996: 632f). Nonetheless, he understood that the demand for a return to democracy pertained not only to upholding elections and civil rights, but also to guaranteeing social rights, which had been ignored by governments following the defeat and marginalization of the left after the 1946-49 Civil War. He nationalized strategic sectors like utilities and companies like Olympic Airways. The construction of a welfare state with health insurance and pension plans together with the tax system were thus important aspects of this class compromise between a government of the right and the rehabilitated left.

His successor in 1981, Andreas Papandreou, went much further in his efforts to establish universal health insurance and pensions, as well as in his endeavors to heal the rifts of the past by recognizing the struggles of the left as legitimate. Papandreou, a former Harvard economics professor and follower of dependency theory, had built another party – PASOK – based on strong personal leadership. Characteristically, he did not call it a party but a “movement.” Its structure, nevertheless, was modernized by establishing regional and local party offices all around the country, forming a far-reaching political machine. Papandreou, displaying rhetorical radicalism, demanded Greece’s exit from both NATO and the EEC. He proclaimed a “Third Way” between socialism and capitalism, invoking elements of dependency theory and declaring Greece an underdeveloped country under pressure from imperialist interests. This radicalism subsided very quickly after his 1981 electoral victory (Sassoon 1996: 634-39). PASOK became the pillar of the “Third Republic,” ruling for 21 years between 1981 and 2011. Papandreou's legacy was continued, although quite modified, by the “anti-populist” policies of his successor Kostas Simitis, who replaced him in 1996 and started the first phase of neoliberalism (after the brief intermezzo of the ND government from 1990-93) in preparation of the country's Eurozone entry which he described as a “one-way street.”

The US-born son of Andreas Papandreou, Georgios Papandreou, won the 2009 elections with the promise of more social-democratic policies and an improvement of the worn-out welfare state. To his misfortune, his administration began at the moment that the Eurozone crisis broke out, following the revelation that Greek public debt was much higher than previously reported. After pushing through the first harsh austerity measures without any involvement of the EU or IMF, he later sought help from the Troika. Realizing that their agenda was anything but what the Greek people demanded, he called for a referendum on whether the austerity policies should continue or not. So much “democratic” procedure (designed, of course, only to keep him in office) cost Papandreou dearly, and after interventions of his European colleagues from Brussels, Paris and above all Berlin, he resigned. For the next months, a “technocratic” (unelected) government led by former central banker Lukas Papadimos headed the country and the negotiations with the Troika.

The growing prominence of clientelism and corruption after the mid-1990s was linked to a transformation of the Greek state, which due to the EU's intermediation became ever more internationalized. This transformation led to a specific interconnection between certain capitalist class fractions and the Greek state. Those fractions acted as go-betweens for foreign companies in domestic and foreign trade as well as in money markets (Fouskas/Dimoulas 2012). Additionally, these new class fractions facilitated the inflow of international, mainly European, capital. This helped the banking sector flourish by attracting foreign capital, which was then invested profitably in offshore activities.

At the same time the impositions of the EU – e.g. via the “race to the bottom” of national tax regimes to attract foreign investment (Ganghof/Genschel 2008) – began to constrain the Greek state from engaging in redistributive policies. Corporate tax rates in Greece were reduced from 45% in 1995 to 21% in 2004 (Ioannidis 2013). Dependence on foreign capital thus grew constantly, as the Greek state made bids for big infrastructure projects like the 2004 Olympic Games in Athens. Furthermore, Greece remained the European country with the highest per-capita expenditure on armaments, bought mainly from Germany and France. The policies of privatization and re-commodification created new liquid assets which engendered a first bubble in 1999. More than 100 companies were privatized between 1994 and 1999. When the bubble burst, many small asset holders lost their savings through speculation, which had been explicitly encouraged by the Greek government. Speculators on a bigger scale, though, gained huge profits.

This whole system worked through the acceptance of tax evasion on the part of finance capital. More than 6,000 individuals were known to owe more than €150,000 to the state, amounting to a total of over €30 billion, while Greece’s total budget was about €23 billion (Fouskas/Dimoulas 2012). After 2000, this model gained momentum again and provided Greece with the second-highest growth rates in the Eurozone (around 3.7%) until 2008. Its main driver apart from domestic demand was the rising profitability of corporations. Their increased profit margins accounted for more than two thirds of Greek inflation, which was considerably higher than in the Eurozone as a whole, thus eroding Greek competitiveness (Karamessini 2012: 156-58). Greek investments went to the Balkans and the Middle East, into small and medium companies in the textile sector or brewing. Greek banking capital spread through the Balkans, buying stakes in banks and telecommunications. Greek exports went mainly to EU member states, reaching 65% in 2009 and still 58.5% in 2011 with the biggest partners being Germany, Italy and France (Elstat 2011). The problem of unevenness is expressed here again: While the absolute value of Greek exports to Germany in 2012 amounted to €2.6 million, the value of German exports to Greece, after three years of constant fall of Greek imports, still reached a total sum of €5.18 million (Destatis 2013). This contributed to the doubling of public debt between 2001 and 2009.

All this accounts for the budget deficit of the Greek state. Public expenditure, although growing immensely after 1974, did not exceed the OECD average. Nor did the percentage of public sector employees in relation to the whole labor force (Markantonatou 2012: 191). It was the complex system of legal tax exemptions and easy tax evasion, combined with its structural peripheral position in the European single market and Eurozone, that led to the indebtedness of the Greek state. There are 500 exemptions regarding corporate taxation, leaving crucial revenue sources like shipping (Greece has the biggest Gross Registered Tons capacity in the world), landholdings of the Orthodox Church, and banking almost completely outside the tax system. This system, although it leaves most profits to the above mentioned groups, was extended to a whole range of professions (lawyers, engineers, etc.), farmers, and self-employed who together comprise 30% of the labor force. Greece’s peculiar iteration of embedded neoliberalism thus meant that many groups of the society benefited, if only on a small scale, from possibilities of tax evasion and exemption. It left salary earners and pensioners as the main pillars of the state's tax revenue, together with VAT. The new tax reforms implemented since the outbreak of the crisis have intensified that tendency, making taxation even more regressive (Ioannidis 2013).

Integration into the European economy transformed the Greek economy into one with a financialized and extraverted orientation. This means that economic growth was mainly driven by finance. Since the Greek currency was now the Euro, Greece was perceived as an investment site as safe as Frankfurt or Paris. The state could therefore pile up high amounts of debt more easily. It thus became a debt-driven model dependent on credit inflows from abroad and hence subject to strategic investment decisions made outside of Greece.

2012 and after: Turmoil in the Greek party system

We may now analyze in more detail the elections of 2012, to show how the unilateral termination of the 1974 class compromise led to an end of the old two-party system that was its clearest expression. Since this system can no longer gain legitimation through tax exemption, job appointments as political favors, or other corrupt clientelistic practices, people turned against it. They did so also because every austerity measure was passed without serious deliberation in parliament or negotiation with the trade unions. The government's effort to blame the unelected foreign functionaries of the Troika for these decisions only served to damage the reputation of both. Consequently, the old class compromise was shattered.

The sacking of public servants is one of the key demands of the Troika. With a diminished public servant corpus, the two dominant parties of the post-dictatorship era lose their most important electoral pillar and main constituency. Thus, the two-party system based upon the old forms of clientelism has been demolished on a long-term basis.

The first 2012 elections (in May) took place under quite exceptional circumstances. The degree of pressure from abroad (expressing itself in bizarre open letters from German newspapers explicitly calling on Greek voters to vote “reasonably,” i.e. for pro-Euro parties) and the pressure exerted by the two big parties and the domestic mass media evoked an atmosphere of immediate catastrophe in case of “wrong” results. Many observers described the public mood of voters hating themselves for the very vote they just had cast based on fear of possible consequences of an alternative vote. It was the continuation and intensification of a pronounced state of emergency. The state of emergency, once proclaimed, justifies all means intended to overcome it, since “the nation” has to be “saved” from supposedly imminent catastrophe (Markantonatou 2012).

The elections brought to an end the two-party system which had dominated the post-dictatorship era. The main characteristic of the elections was anger after three years of austerity policy and six months of an “unelected” government. Both hitherto dominant parties had to take steep losses. The (by name) social-democratic PASOK, the winner of the 2009 elections with 43.9%, fell to 13.2%, and the conservative ND, with 33.5% in 2009, got 18.9% (all figures from the Greek Ministry of Interior), which made it the winner of this vote but unable to build a one-party government (as had been the case almost always since 1974). It could not achieve a majority, even though the Greek electoral system grants to the first party 50 extra seats in the 300-seat parliament. In 2009, the two biggest parties together received 77.4% of the vote, whereas in May 2012 those two parties together obtained only 31.1%, less than half the votes of only three years before. Participation rates stood at 65.1% in May and 62.5% in June which marked new all-time lows. The supposedly “left-wing radical” SYRIZA (“Coalition of the Radical Left”) with its anti-Memorandum rhetoric skyrocketed from 4.6% in 2009 to 16.8%, thus becoming the second strongest party. Another party with an anti-Memorandum program, the “Independent Greeks” (ANEL), split from ND and positioned itself at the center-right, albeit with strong populist elements. It reached 10.6% with its main political focus on abolishing the Memoranda with the Troika. A new center-left, pro-Euro party called Democratic Left (DIMAR), a “moderate” split-off from SYRIZA, won 6%. The communist party KKE, against the Memoranda as well the Euro and the EU, because for them they constitute the newest and furthest developed means of capitalist exploitation, gained 1 percentage point and stood at 8.5%. The most alarming new aspect of the elections was the entry of the openly fascist party Golden Dawn (Chrysi Avgi) into parliament with almost 7% of the vote and 21 representatives.

Since the May results did not give a majority to any party, a second election was called in June and took place under the same circumstances as described above, but on an intensified scale. Furthermore, for many voters, the prospect of a SYRIZA-led government dominated their voting decisions. This climate brought a further decline of PASOK’s votes down to 12.3% and for the KKE the loss of almost half of their electorate, which was reduced to 4.5%. The KKE’s decline was due to its firmly maintained strategic line of refusal to co-operate with pro-system parties, including those of the “left.” The communists’ position was that any management of the crisis without the overthrow of bourgeois rule and private property in means of production would only do more harm to the majority of the people. This staunch revolutionary line, however, did not attract a significant share of the indignant voters. The only parties that gained votes were ND with 29.7% and SYRIZA with 26.9%. DIMAR improved slightly by 0.14%. ANEL lost more than 3 percentage points and Golden Dawn held steady, although losing three parliamentary representatives. Now, under heavy pressure from other EU member states and the Troika, the old adversaries of the pre-crisis era, ND and PASOK, had to form a grand coalition, extended by DIMAR as a small third partner. The new prime minister was the leader of ND, Antonios Samaras, a former university roommate of Giorgos Papandreou, who, until the Troika demanded otherwise, had categorically rejected the Memoranda. DIMAR left the government after the unprecedented closure of the national broadcasting station ERT in June 2013, leaving the two remaining coalition partners with a margin of now three seats above the 151-seat minimum for a majority.

The main electoral base of the ND since 1974 has been a coalition of the business and employer classes, farmers and retirees. The two former groups also formed an electoral stronghold for Golden Dawn in 2012. SYRIZA, serving as a pole of attraction for disappointed former PASOK voters, transformed its character profoundly from a party dominated by academics to one supported by young people, wage earners in both public and private sectors, the unemployed, and small and medium artisans. KKE’s main constituency groups since 1974 are the recently unemployed, private-sector middle management, private-sector wage earners, and students, forming an alliance of middle- and working-class wage earners (Vernardakis 2012).

Resistance and opposition parties

Numerous movements and resistance groups, as diverse in their composition as in their political goals, showed up in the course of the crisis. Popular protests were enacted such as the the “Den plirono” (I don’t pay) movement which lifted the bars of toll stations on the national motorways to let drivers pass for free. Another form of protest was adopted by local farmers who went to the next town center and gave vegetables for free to passers-by. Many exchange spots arose in the larger cities, based upon the barter system. The most prominent one was the movement of the “Aganaktismeni” (the Outraged) inspired by the movement of the Indignados in Spain. They intentionally rejected any specific political ideology or organizational structure, which made their movement quite short-lived. It was an expression of anger on the streets, politicizing mainly younger people who up to then had never engaged in political actions. Because of this political inexperience, it never went beyond the level of an open discussion forum and a platform for the symbolism of dissatisfaction rather than for the elaboration of alternatives.

It remains to be seen whether all this marked the end of the post-dictatorship (“metapolitefsi”) era. If so, the beginning of this end would likely have been the violent riots that erupted after a 15-year-old youth had been shot dead by the police in December 2008. It was the first violent political experience of the so-called “700-Euro-Generation” – highly skilled university graduates who could not find jobs except in fields like food-service or delivery, with low wages and insecure labor.

Scores of general strikes have been waged by the unions since the imposition of the first austerity packages. Tens of thousands of people came out on the streets in some of the larger strikes. A break between union members and their PASOK-affiliated leaders, and afterwards a break of union cadre with PASOK, were the first results. Innumerable wildcat strikes took place, as did occupations of plants that were threatened by closure. Several of these became self-governing, whereas in others like the Steelworks in Elevsína, strikes continued for many months to stop layoffs or plant-closure.

The state apparatuses responded with unprecedented levels of violence and brutality. Furthermore, the government increasingly used compulsory mobilization from the times of the military junta to force workers back to work, under the threat of prison terms. Anarchists and other young demonstrators were arrested and subject to brutality and torture on a scale that led to an outcry even in the foreign press.5

The main formation of the extra-parliamentary left, called ANTARSYA (an acronym which also means “uprising”), consists mainly of Trotskyist and Maoist fractions as well as splits from the KKE. Its electoral results have been very low, but its militants have been visible in demonstrations and at “aganaktismeni” gatherings. Although they reject austerity policies and the EU, and call for a cancelation of all debt, in practice they are closer to SYRIZA than to KKE, their main critique of SYRIZA being only about its strong parliamentary focus.

SYRIZA, first founded as an alliance of a number of socialist, Trotskyist, Maoist and ecological parties and movements in 2004, only recently transformed itself into a party proper, adopting the name SYRIZA (United Social Front). The by far dominant structure inside SYRIZA is Synaspismos, again a former alliance of various socialist and ex-Eurocommunist forces whose origins lay in the split from the KKE in 1968, after the intervention of Warsaw Pact troops in Czechoslovakia and during the military junta in Greece. It then established itself as KKE-Interior, thereby alleging an “external” orientation of the KKE toward Moscow. It has been from the very beginning the main pillar of pro-EU-stances inside the Greek left. In 1989 those forces, then called “Greek Left,” closed ranks with the KKE again to build an alliance with the name Synaspismos (“alliance”). This experiment lasted only three years and in 1991 the two parties split again, since the “renewing” Left demanded that the KKE give up Marxism-Leninism as well as its structure as an autonomous communist party. KKE resolutely rejected both demands. Since then, there has been bitter hostility between the Synaspismos and the KKE, reinforced by the KKE’s insistence on maintaining its revolutionary Leninist and anti-revisionist profile. By contrast, the Synaspismos, as well as SYRIZA as a whole, has retained its pro-EU-position (culminating in its approval of the Maastricht Treaty of 1992). Since 2007 it is led by the youthful and media-savvy Alexandros Tsipras, who gives the party the pronounced populist profile that contributed to its success in the highly person-centered Greek political system.

SYRIZA is attempting to replace PASOK as the dominant force within the mainstream trade union organization. When taking power became a realistic possibility in 2012, the continuous transformation of SYRIZA into a standard social-democratic force was greatly accelerated. In several meetings with ruling politicians of other coun tries, Tsipras repeatedly stressed his “responsible” stance towards the Euro, debt, and the country's economic order, hailing Obama’s and Hollande’s social and economic policies as role models for the policies he would pursue when elected into government; this has been termed the “realistic turn” of SYRIZA. Nothing could express this development better than the affirmative stance the Greek employers’ organization SEV has adopted towards the party under the Tsipras leadership (To Bima 2013a).

The two populist parties – the “Independent Greeks” and SYRIZA –, although with very different ideological origins, share many common views: Both view Greece as being subjected to external anti-social and anti-national forces; both put the Memoranda at the center of agitation; both want to overthrow the rule of the two traditional parties. This is why they formed a “strategic alliance” in parliament against the government.

Whereas the rise of populism could have been expected under the present conditions, two other phenomena beg for explanation: the simultaneous rise of old-style fascism and the failure of communism in both 2012 elections.

Decline of the KKE. The KKE, the oldest party of Greece and for a long time the only one not based upon clientelism, was founded in 1918, gave itself a clear communist profile in 1920, and renamed itself Communist Party of Greece (KKE) in 1924. From then on till today it declares itself as Marxist-Leninist and has kept and reinforced its organizational structure according to Lenin’s “party of a new type.” It has played a significant role in the political struggles of the country ever since. It gained its greatest prominence during the German occupation, when it led the resistance movement and was able to build, in the liberated mountainous regions, the nucleus of a socialist society. This all ended with the retreat of the Axis forces and the determination of Great Britain to restore monarchy in Greece, thus ensuring that the country remained firmly attached to the western bloc. The communists' armed revolutionary advances in 1944 and 1946 led to a bloody Civil War (1946-49), which was finally won by the ruling extreme right due to US intervention. The Greek Civil War was not only the first “hot” conflict of the Cold War, but also a testing ground for US counter-insurgency warfare, including the use of napalm against the rebels.

After the defeat of the communist-led Democratic Army of Greece, the KKE was outlawed and its members prosecuted and in many cases murdered. In the following decades, the KKE could only indirectly make its mark on the political scene, operating covertly and inside legal formations, above all inside the United Democratic Left (EDA) party. This remained unchanged until 1974 when the KKE was legalized by Karamanlis. The party’s influence is only partly expressed in electoral results, which have oscillated between 13% and 4.5%. These results contrast with its continuous ability to organize large-scale popular mobilizations on short notice. A peculiar aspect in Greece is the party's respect even in adversarial political camps due to its political history. Official anti-communism and the legitimation of anti-social policies thus must assume different forms than in other European countries: even outspoken economic liberals refrained from openly attacking the welfare state or unions' wage policies as in other countries.

The KKE’s main power-base is the anti-capitalist trade union organization PAME, which unites large parts of the country’s labor movement, assumes a staunch anti-government and anti-EU political line, and radically opposes the leaderships of the “official” unions. According to its own numbers, about 850,000 people are organized in its different branches. KKE has been from the very beginning against the entry into what was then the European Economic Community. It was against entering the Eurozone and against the Memoranda of the Troika. It regards all those developments as tools to enhance capitalist exploitation and imperialist domination. Although it favors abolition of the EU and the Euro, until now it has been cautious in not calling for an immediate retreat from the Eurozone under capitalist conditions, believing that this could also have negative effects for the people and foster illusions about the main contradictions of capitalism. Its exit strategy therefore combines dissociation from the EU with the overthrow of capitalism.

The hope that large parts of the population have placed in the prospect of an immediate and easy solution of their everyday problems by a left-wing government made it impossible for the KKE to gain greater resonance with their proposal of socialism and people's power, at least not at the elections. Most outraged citizens at this moment seem to long for a restoration and extension of the old way of living and the removal of corruption from the political system, rather than revolution. This is the reason for the KKEs losses in the June 2012 elections.

The rise of fascism. The neo-Nazi Golden Dawn movement was founded in the 1980s by supporters of the Greek military junta. Its ideology is a crude mix of extreme nationalism and adoration of Nazi Germany, the regime which invaded, occupied and devastated Greece for more than three years, leaving over 300,000 dead – one of the highest death-to-population ratios of all countries involved! Many observers from inside Greece, but also from abroad, have hinted at manifold connections between the party and certain interest groups, e.g. ship-owners who sent groups of Golden Dawn members to beat striking crew-members and break up their strikes ( More is known about the tight links to Greek police forces, who let GD members in certain quarters of Athens engage in violent practices including chasing foreigners, destroying their market stands, beating and stabbing them. In the June 2012 elections, up to 50% of the Athenian police force gave their vote to GD (To Bima 2013b).

State institutions and the media reacted initially with a policy of toleration, although later on critical voices in several talk shows and news programs grew louder. The government actually seemed to be happy to have this pressure valve which allowed the people's indignation to be channeled in a direction not dangerous for the governing parties. The parts of Athens with high proportions of migrants and high schools are hotbeds for GD recruitment. Playing the guardians of law and order, they accompanied elderly people to ATM machines or distributed foodstuff and blood exclusively to Greeks. GD’s fierce rhetoric focuses on the Greek ethnos, Greek orthodoxy, and the influx of migrants; it presents GD as the only un-corrupt party. Threats of violence have often come true, with thugs related to the party systematically intimidating media representatives, artists, homosexuals, and politicians from other parties. Recent expressions of its aggressiveness have included murders of immigrants, a massive assault on a group of communist militants who were distributing party posters, and finally the stabbing to death of well-known anti-fascist rap musician Pavlos Fyssas. However, only the latter – the murder of a Greek citizen – provoked a public outcry, with the party's poll results plummeting and the police arresting several Golden Dawn MPs due to their alleged involvement in heavy criminal activities such as murder, extortion, money laundering and bombings. At the moment the Greek judicial system has initiated the process of declaring GD a criminal syndicate. However, it has been shown that he Greek government only did so due to external pressures from Jewish- and Greek-American communities in the US as well as from the European Commission (Milakas 2013).

GD’s pre-crisis cadre consisted mainly of thugs, convicted criminals, and former doormen. With its rise in popularity, though, it started many initiatives at schools trying mainly to recruit young people, so far with great success (Papadopoulos 2013). Recurring polls showed a rise in the vote-share for GD, reaching around 15% before the murder of Pavlos Fyssas, thus making it the third-largest party in potential elections. Although the party seems (temporarily) to have lost some of its popularity, it is unlikely that the resurgence of fascism in Greece, a country that has often fallen victim to domestic and foreign fascist regimes, has come to an end. The rise of what is probably Europe's most extreme right-wing movement in a people with a supposedly deeply-rooted anti-fascist and democratic conscience marks a pronounced rupture with the hitherto hegemonic political culture. It shows that the ideological and political superstructure of post-dictatorship Greece was not merely a product of the traumatic historical memory of fascist occupation and brutal dictatorships, but rested on the foundations of a specific class compromise which, resting as it did on a rudimentary welfare state and the continuity of clientelism, proved much more fragile than anybody could have expected. Only for as long as this class compromise held, could the ND keep most still-existing extreme right-wing and fascist politicians inside its ranks.


Although the Greek political scene is currently in flux, our analysis leads to the conclusion that the old political system and class compromise no longer exist. This would remain true even if elections were to bring back to power both the traditional ruling parties and even if we regard SYRIZA as the actual PASOK successor. Even if SYRIZA wins the next elections, it will have to deal with its diminished abilities to fulfill the output expectations of its voters. Since it intends to govern within the institutional framework of the austerity-prone European Economic Governance, it is no daring prediction that a SYRIZA government will soon provoke widespread disappointment.

In this context, many have raised the question of whether Greece would not be better off leaving the Eurozone. Economist Costas Lapavitsas, for example, has long argued for a strategy of default and exit from the Eurozone (Lapavitsas 2012). This question and the answer given by Lapavitsas and others, however, are much too narrow. To be sure, the Economic and Monetary Union has tightened the neoliberal straitjacket considerably. But the European Union, whose principal aim is to enhance the “four freedoms” of capital, labor, commodities and services in its internal market in order to build and sustain the second biggest capitalist bloc within the international division of labor, also provides little advantage to the majority of people in Europe. The EU's character as a project of class rule and international competitiveness must be taken into account in envisioning real alternatives. Exit from the EU does not in itself constitute a viable strategy. Finally, the problem is not confined to a certain currency or economic policy. It is the very nature of capitalist relations of production that caused the crisis along with its consequences for Greeks and people elsewhere; thus a “solution” within the capitalist framework will only reproduce its tendencies towards crisis and pauperization.

The turning of Greece into a social laboratory – with unprecedented interventions into national practices of representation, participation and social policy – has shaken the foundations of the Third Republic. The post-Dictatorship class compromise was canceled unilaterally by the ruling elites. The enforcement of a harsh austerity policy on a scale unseen in peacetime by unelected “technocratic” delegates of the Troika and three subsequent governments of different composition (but always with the involvement of the two dominating parties of the last four decades) made a mockery of any remaining bourgeois-democratic procedures. The apocalyptic scenarios which according to the Greek and international press would immediately result from a “wrong party” winning the elections made the very notion of election – in the sense of a choice between at least two alternatives – a farce as well. The anti-crisis policy which declared the existing welfare regime dispensable and made the solvency of Greek and foreign banks the highest priority has been pushed through not only without consulting the former “social partners” but against their resolute resistance.

Up to now, the resistance has seemed utterly futile. Yet it is a clear sign that those policies completely lack legitimacy for the overwhelming majority of the Greek people. The sharp increase of unemployment and poverty make for an explosive mix which could erupt at any moment. It is still not clear what the outcome of those processes will be, but one thing is certain: it will depend on large-scale struggles that could challenge the very foundations of the existing social order.


Alderman, Liz (2012) “Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone,” New York Times, October 24.

Baboulias, Yannis (2013) “Selective zero-tolerance: is Greece really a democracy anymore?” New Statesman, May 2.

Cafruny, Alan and Ryner, Magnus (2007) Europe at Bay: In the Shadow of US Hegemony, Boulder, CO: Lynne Rienner.

Destatis (Federal Statistical Office of Germany) (2013) Table External Trade (in German).

Elstat (Hellenic Statistic Authority) (2012) Press Release: Commercial Transactions of Greece: December 2011, Athens.

ETUI (Europan Trade Union Institute) (2013) Benchmarking Working Europe, Brussels.

Fouskas, Vasilis K. and Dimoulas, Constantine (2012) “The Greek Workshop of Debt and the Failure of the European Project,” Journal of Balkan and Near Eastern Studies 14 (1), 1-31.

Ganghof, Steffen and Genschel, Philipp (2008) Deregulated tax policy: corporate tax competition and income tax in Europe (in German), in: Höpner, Martin and Schäfer, Armin (eds.), Political economy of European integration, Frankfurt/Main, Campus, 311-333.

Gill, Stephen (1998) “European Governance and New Constitutionalism: Economic and Monetary Union and alternatives to disciplinary neoliberalism in Europe,” New Political Economy 3 (1).

Gowan, Peter (1999) The Global Gamble: Washington's Faustian Bid for World Dominance, London, Verso.

Hall, Peter/ Soskice, David (2001) Introduction to their edited collection, Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, New York, Oxford University Press, 1-70.

Höpner, Martin and Schäfer, Armin (2010) “A New Phase of European Integration: Organised Capitalisms in Post-Ricardian Europe,” West European Politics 33 (2), 344-368.

Ioannidis, Yorgos (2013) “The peculiar distributional character of the Greek taxation system (1995-2008) and the reform that never happened,” Paper presented at the 19th Conference on Alternative Economic Policy in Europe of the EuroMemo Group, London, Sept. 20-22.

Karamessini, Maria (2012) “Sovereign Debt Crisis: an opportunity to complete the neoliberal project and dismantle the Greek employment model,” in: Lehndorf, Stefan (ed.) A Triumph of failed Ideas: European models of capitalism in the crisis, Brussels, European Trade Institute, 155-181.

Kompsopoulos, Jannis and Chasoglou, Jannis (2013a) Greece and the EU: Authoritarian positive integration and the Greek nation state (in German), Grundrisse 46, 29-38.

Kompsopoulos, Jannis and Chasoglou, Jannis (2013b) Competition state transformation in the EU context: The case of the Greek Regime of Production and Distribution (in German), Das Argument 301, 156-166

Lapavitsas, Costas (2012): Crisis in the Eurozone, London, Verso.

Lessenich, Stephan (1999) Forward – and don't forget. The new German debate on the social state and the dialectics of social policy intervention (in German), Prokla 29 (3), 411-430.

Löwenstein, Stephan (2011): Search for consensus about the euro rescue (in German), Frankfurter Allgemeine Zeitung, Sept. 1. Markantonatou, Maria (2012) “The Social Consequences of the Financial Crisis in Greece: Insecurity, Recession and Welfare Regulation,” International Journal of Anthropology 27 (3), 183-196.

Margaronis, Maria (2012) “Greek anti-fascist protesters ‘tortured by police’ after Golden Dawn clash,” The Guardian, Sept. 10.

McGiffen, Steve (2011) “Bloodless Coup d’État: The European Union’s Response to the Eurozone Crisis,” Socialism and Democracy 25 (2).

Milakas, Dimitris (2013) The Monster and the Incompetents (in Greek), To Pontiki, October 3.

Ministry of Interior (2013) Section on Elections (in Greek),

Neue Züricher Zeitung (NZZ) (2013) SME die-off in Greece (in German), August 28.

Pagoulatos, George (2003) Greece's New Political Economy: State, Finance and Growth. From Postwar to EMU, London, Palgrave.

Papadopoulos, Jannis (2013) Neo-Nazis in Greece (in German), Le Monde Diplomatique, June 14.

Rapti, Vasiliki (2007) “The Postwar Greek Welfare Model within the Context of Southern European Welfare,” in: Hagemann, Gro (ed.) Reciprocity and Redistribution: Work and Welfare Reconsidered, Pisa, Pisa University Press, 44-60.

Rizospastis (2011): Offensive against the people without hesitation (in Greek), May 25.

Rizospastis (2013): Pensions and Insurance funds: Sacrifices on the altar of capitalist profitability (in Greek), April 28.

Rosa-Luxemburg-Foundation (2012): “Cheating Greeks are destroying our Euro”: Popular errors on the debt crisis (in German), Berlin, Rosa Luxemburg Stiftung.

Sassoon, Donald (1996) One Hundred Years of Socialism. New York: New Press.

Scharpf, Fritz W. (2008): Negative and positive integration (in German), in: Höpner, Martin/ Schäfer, Armin (eds.) Political economy of European integration, Frankfurt/Main, Campus, 49-87.

Schoemann, Isabelle and Clauwaert, Stefan (2012) The crisis and national labour law reforms: A mapping exercise, Brussels, European Trade Union Institute. [website] (2013) Demands for the opening of bank accounts. Intermingling of ship owners, businessmen and … archbishops (in Greek), Sept. 25.

Ta Nea (2013) Greece is the third poorest country of the EU (in Greek), March 27.

To Bima (2013a) I. Dragasakis: From utopia to… realism (interview), (in Greek), August 4.

To Bima (2013b) Policemen again collectively vote for “Golden Dawn” (in Greek), June 19.

van Apeldoorn, Bastiaan (2001) The Struggle over European Order: Transnational Class Agency in the Making of “Embedded Neoliberalism,” in: Bieler, Andreas and Morton, Adam David (eds). Social Forces in the Making of the New Europe: The Restructuring of European Social Relations in the Global Economy. London, Palgrave, 70-89.

Vernardakis, Christoforos (2012) “The Greek Left in the 2012 Elections: The Return to the Class Vote,” Transform! European Journal for alternative Thinking and political dialogue, Issue 11.

Zeise, Lucas (2012) Euroland gets burned down: Profiteers, victims, alternatives, (in German), Cologne, Papy Rossa.


1. For a detailed account of the EMU's effect on the crisis, see Lapavitsas 2012.

2. For a more comprehensive account, see Kompsopoulos/Chasoglou 2013a.

3. The “European Semester” aims at securing national budget discipline: The European Commission and the European Council analyze the economic situation in the EU and its member states and then elaborate a bundle of recommendations for national austerity policies. The “Sixpack” consists of six legislative measures on the European level that create economic supervision and budget consolidation procedures. Non-compliance with the Stability and Growth Pact leads to compulsory adjustment programs in member states and possible financial sanctions for deficit countries. The “Euro-Plus-Pact” promotes voluntary economic policy coordination of member states with the aim of enhancing competitiveness and fiscal consolidation for member countries.

4. For example, the average age of retirement in Greece was 0.4 years above that in Germany, and holiday entitlement was considerably lower than in Germany even before the crisis (on average, 23 days a year in Greece and 30 in Germany). While it was often claimed that due to an alleged “Southern” mentality Greeks did not work much, Annual working hours in Greece were 2,119 hours on average compared to 1,390 in Germany (Rosa-Luxemburg-Foundation 2012).

5. The British magazine New Statesman asked its readers if Greece really still was a democracy (Baboulias 2013); the Guardian published photos of the victims and quoted their lawyer in describing these police actions as an “Abu-Ghraib-style” humiliation (Margaronis 2012).