Oct 29 2014

Crisis and Democracy – The Democracy in Crisis: Social Anthropological Perspectives on the Fragility of the Social Contract

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Dr Elisabeth Kirtsoglou

A number of authors and commentators on the Greek crisis have pointed out that the Greek financial predicament is a byproduct of a deep and chronic political crisis. I propose that we view this political crisis as a crisis of the Social Contract, which generated multiple spheres of economic, civil and civic exclusion, engendering specific public concerns with sovereignty, democracy and asymmetrical relations of power (cf. Thodossopoulos 2014; Kirtsoglou and Theodossopoulos 2010). An anthropological approach to the analysis of crisis and democracy in Greece allows us to document local patterns of accountability, historical and political causality and to analyze them in context. The power of indigenous etiology – how people make sense of political affairs – provides us with unique insights into their preferred avenues of claiming and exercising political agency and participation.

The qualitative characteristics of Greek politics and governance – especially after 1974 – have been discussed in the literature under the inclusive terms ‘clientelism’, ‘populism’, ‘corruption’, ‘statism’, and they have been deemed responsible for the inefficiency of the Greek state, the lack of competitiveness of the country as a whole, and ultimately for the lack of fiscal discipline that led to the present financial meltdown. I propose that we approach the post-1974 party-led clientelism as the result of post-civil war political developments – or else, as a civil war legacy that later governments had to negotiate. My argument revolves around the idea that in order to appreciate the political circumstances that led to the financial deadlock, we need to contextualize them historically (cf. Knight 2012, 2014) and in geostrategic terms (cf. Kirtsoglou 2006), firmly placing Greece in the international political and economic map. The immediate consequence of examining local developments as part of global conditions is that we can expand our conceptualization of Greek governance beyond taxonomic and dichotomous models of a lag in modernization. A second outcome of such an approach is that it can offer us a plausible explanation of why a significant part of the Greek public resists (and have resisted even more ferociously in the past) various kinds of ‘reforming policies’.

Local politics – particularly so after WWII – cannot be understood separately from the cold war (cf. Kirtsoglou & Theodossopoulos 2010), which led to the systematic creation of spheres of exclusion out of which, the ‘politically dangerous subject[1]’ was born –to paraphrase Foucault- as a species.

At the very opposite end of these spheres of exclusion and by consequence of their existence, new elites were created, as inequalities and asymmetries between citizens proliferated, not only on the basis of differential economic development of groups, but as a consequence of ideological taxonomies. What is more, it is this particular era, and perhaps for the specific local/international political reasons, which solidified the strong routes of state-nepotism and state-driven development in Greece (compare with Featherstone 2008: 11).

The post-1974 political system had to deal with civil, economic and political inequalities that were an indispensable part of the Cold War climate, while the forms of capital accumulation were the same internationally both in their character and in their effects (cf. Varoufakis 2011; Mouzelis 1978). Clientelism-as-partitocrazia (cf. Lyrintzis 2011) became a form of dealing with various forms of political exclusion of the past. In the absence of a welfare system, this later form of clientelism became a simplistic spill-over mechanism of profits and power to wider sections of the population[2] (Laskos & Tsakalotos 2013: 24, 41), which resulted in the proliferation of spheres of exclusion and a Kafka-style bureaucracy that rendered party-patronage and the various micro-practices of corruption almost necessary for taking care of daily affairs. Both the state-nepotism of pre-1974, and partitocrazia of the last three to four decades created and sustained political and economic elites with privileged access to state resources, a condition which hindered economic development and damaged the citizens’ appreciation of democracy, transparency and equality as par excellence dimensions of the Social Contract.


Featherstone, K. 2008. Varieties of Capitalism and the Greek Case: explaining the constraints of domestic reform? GreeSE Paper 11. Hellenic Observatory Papers on Greece and Southeast Europe.

Iordanoglou. C. 2010. To Metapoliteutiko Koinoniologiko paradeigma: He apopsi enos Oikonomologou (The sociological paradigm of Metapoliteusi: An Economist’s View). Synchrona Themata 110: 31-43.

Kirtsoglou, E. 2006. Unspeakable Crimes: Athenian Greek perceptions of local and international terrorism. In Terror and Violence: Imagination and the Unimaginable. Strathern, A., Stewart, P. & Whitehead, N.L. London: Pluto Press. 61-88.

Kirtsoglou, E. & Theodossopoulos, D 2010. The Poetics of Anti-Americanism in Greece: Rhetoric, Agency, and Local Meaning. Social Analysis 54(1): 106-124.

Knight, D. M. 2012. Cultural Proximity: Crisis, Time and Social Memory in Central Greece. History and Anthropology 23(3): 349-374.

Knight, D. 2014. Mushrooms, Knowledge Exchange and Polytemporality in Kalloni, Greek Macedonia. Food, Culture and Society 17(2): 183-201.

Laskos, C. & Tsakalotos, E. 2013. Crucible of Resistance: Greece, the Eurozone and World Economic Crisis. London: Pluto.

Lyrintzis, C. 2011. Greek Politics in the Era of Economic Crisis: Reassessing Causes and Effects. GreeSE Paper 45, Hellenic Observatory Papers on Greece and Southeast Europe.

Mouzelis, N. P. 1978. Modern Greece: Facets of Underdevelopment. London:Mackmillan.

Panourgia, N. 2008. Dangerous Citizens: The Greek Left and the Terror of the State (Fordham University Press.

Theodossopoulos, D. 2014.The Ambivalence of Anti-Austerity Indignation in Greece: Resistance, Hegemony and Complicity. Special Issue: Rethinking Resistance in the 21st Century. History and Anthropology 25(4):488-506.

Varoufakis, Y. 2011. The Global Minotaur: America, Europe and the Future of the Global Economy. London: Zed.

[1] See also Panourgia 2008, Dangerous Citizens.

[2] Some scholars argue that clientelism cannot be held accountable for the crisis, because “in terms of government expenditure Greece is well below other economies” (Laskos and Tsakalotos 2013: 42), while the Greek state was never disproportionally bigger than its European counterparts (cf. Lyrintzis 2011; Iordanogloou 2010).

Dr Elisabeth Kirtsoglou is a lecturer at the Department of Anthropology, University of Durham. Her research interests focus on Gender and Politics in Greece. She has published a monograph on Gender and Identity in Greece and since 2006 has been working on themes like terrorism, globalisation and power assymetries and the fragility of social contract. She is currently involved in research concerning the Greek crisis and South European politics.

Dr Elisabeth Kirtsoglou gave a seminar on the topic on October 28. Visit the event’s page to find out more.

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Oct 21 2014

Greece: Taking Stock

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Eleni Louri-DendrinouEconomic and financial changes since the onset of the global and euro area crises

By Eleni Louri-Dendrinou

With the introduction of the euro and the mispricing of sovereign (Greek) risk, a flux of funding inundated Greece and helped fuel an impressive growth rate (averaging 4%) in 2000-2008. Growth, combined with low inflation since monetary policy was managed by the European Central Bank (ECB), produced a flattering picture of an economy suffering from serious reform resistance. Growing fiscal and external imbalances were thus left unaddressed. In 2009 the fiscal deficit reached 15%, while Greece’s competitiveness loss against its trading partners in 2000-2008 was 30%, leading to a current account deficit exceeding 15%. The government sector was crowding-out the tradeables sector.

The increase in sovereign risk that followed the outbreak of the global financial crisis and the realization of the flawed fundamentals led to Greece being cut off from the markets. Hence the need of an adjustment programme combined with a loan from IMF and European partners in 2010, subject to strict conditionality. The programme consisted of four pillars: fiscal adjustment, structural reforms of labour and product markets, measures to combat tax evasion and privatization. With the emphasis placed on the first pillar and a preference for tax increases instead of spending cuts, the recession took unprecedented dimensions, indicating a much higher multiplier than initially estimated.

The cumulative reduction in GDP in 2008-2013 reached 25%, while unemployment surpassed 27%. On the side of the fundamentals though, fiscal consolidation was striking, since a primary surplus (close to 2%, excluding? banks) was achieved in 2013 and the current account showed a surplus for the first time since WWII. Fiscal and structural reforms led to a re-balancing of the economy with the non-tradeables sector shrinking and leaving space for the tradeables sector to develop. Positive growth is expected in 2014 based on: the decline in fiscal drag, competitiveness gains affecting export performance, loosening liquidity constraints and supply-side effects of structural reforms.

Before the crisis, the Greek banking system was sound (capital adequacy ratio 12% and loans/deposits 104%) with a large presence in South Eastern Europe and no toxic assets related to the US subprime crisis. In 2008 private debt/GDP was 97% (vs 220% in Ireland, 202% in Spain and 173% in Portugal). With the outbreak of the sovereign crisis Greek banks were hit by a series of downgrades (following the sovereign), experienced substantial deposit withdrawals (lost €88bn, or one third of deposits, between June 2009-June 2012) and were cut off from money and capital markets (while having to pay back maturing debt).

The Bank of Greece (BoG) had to intervene in order to provide Greek banks with access to eurosystem funding and even extend (expensive) emergency liquidity assistance since August 2011. Greek banks experienced serious losses as a result of the deep restructuring of sovereign debt (PSI losses of €38bn), the fast rise in Non-Performing Loans (5% in 2008 vs 25% in 2012) and the deterioration in interest expense. Banks responded with deleveraging (until September 2014 cumulative bank credit was reduced by 14% vs 31% deposit reduction) which contributed to economic contraction creating a vicious circle. In this fragile environment the stability of the banking system could have been at risk, with possible implications extending beyond Greece. But careful cash management, continuous liquidity provision and tight supervision exercised by the BoG avoided an immediate problem, while a long-term strategy was implemented to create a viable and well capitalised banking system post crisis. Capital needs and viability assessment exercises were performed twice: in 2011-2012 with the help of Blackrock and Bain, and in 2013-2014 with Blackrock and Rothchild.

Four (core) banks were deemed eligible for public support while the rest had either to be privately recapitalised or be resolved. A financial envelope of €50bn was secured for bank recapitalisation and resolution. A new legal framework was introduced to guide the resolution process. A serious restructuring of the banking system followed leaving 39 financial institutions (10 commercial, 19 foreign and 10 coop banks, ) in 2013 out of 65 (19 commercial, 30 foreign and 16 coop banks in 2009). The four core banks control 92% of total bank assets today. The cost (due to private capital injections) reached €42bn with the rest of the financial envelope being kept as a backup.

The political stabilisation post June 2012 and the implementation of the banking strategy led to a return of private sector deposits and a decline of dependence on eurosystem funding (€14bn and over €100bn respectively until August 2014). Also, the four core banks regained access to the international unsecured debt markets. At the same time the creation of the Banking Union with the undertaking of the supervision of the core Greek banks by the Single Supervisory Mechanism of the ECB (starting November 2014) will help to improve transparency and credibility. The comprehensive assessment carried out by the ECB (results publicised on 26 October 2014) will identify capital shortfalls. Corrective actions submitted by the supervised banks will be assessed and monitored.

The resulting strengthening of the banks’ balance sheets and the effective NPL management will help restore positive financing flows to the real economy. Furthermore, alternative non-bank funding sources are activated including corporate bond markets, EIB funding initiatives, foreign direct investment (gross inflow of €7.1bn in 2009-2014) and efficient absorption of EU structural funds.

In a nutshell, the Greek banking system, as well as the Greek economy, have undergone profound (and long overdue) structural changes. Reform of the euro area financial architecture is also building confidence. Growth can resume, provided that major local or international political, geopolitical and economic risks are evaded.

Professor Eleni Louri-Dendrinou is a Visiting Professor at the Hellenic Observatory. She is Professor at the Department of Economics, Athens University of Economics and Business. She completed a B.Sc. in Economics at the Athens University of Economics and Business, an MSc. in Economics at the London School of Economics and Political Science and a PhD in Economics at the University of Oxford. From June 2008 to June 2014 she served as  Deputy Governor, Bank of Greece and President of the Hellenic Deposit and Investment Guarantee Fund.Her current research project is: “Is a credit-less recovery possible? Firm and Credit Growth in Euro area: 2005-2012 Implications for monetary and industrial policies”. 

Professor Louri-Dendrinou gave a seminar on the topic on October 14. To listen to the podcast, please visit the event’s page.

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Jul 29 2014

On the Housing Market in Greece

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By Theodore Panagiotidis & Panagiotis Printzis

Housing is considered to be the most valuable asset of a household and of fundamental importance for its portfolio. Economics considers housing differently as expenditure on new housing is regarded as investment. There is an extensive literature that focuses on the interaction between the housing market and macroeconomic factors.[1] The recent US subprime crisis, the subsequent collapse of the housing market, the financial crisis and its spill-over effects renewed the focus on the importance of the housing market. The scientific literature focuses on both homeownership and the housing wealth. Homeownership varies across countries and its benefits and costs are under examination. Figure 1 presents homeownership rates for the US, Australia, Mexico, Canada and various EU countries. A degree of differentiation can be observed. Spain, Ireland and Greece are characterized by a relatively higher degree of home ownership. On the other side, housing wealth is defined as the market value of all the assets or capital stock of the residential sector in a country (rented or owned). A number of studies have shown that a positive effect of housing wealth on consumption exists, termed the “housing wealth effect”. Others argue that the latter is overestimated.


Figure 1



The relevant literature focuses on the macroeconomic determinants of the housing market. It has been argued that a strong short term relationship exists between housing market and GDP. However in the long term this nexus becomes weak.  Taxation policy often emerges as an important factor since it is favourable to homeowners. The latter can lead to social welfare loss and crowding-out for investments in other sectors.  Mortgage loans are of crucial importance. Higher (lower) value of LTV ratio (loans to collaterals) strengthens (loosens) the connection between house prices and bank lending. When the bank requirements in collaterals decrease, the housing market is getting deregulated and the prices are increasing. The linkage between house prices and loans has been showed to be a bi-directional one. The interest rate is often employed as a dependent variable in the empirical models. Many researchers conclude that its effect is relatively small while others argue that it is one of the most crucial macroeconomic factors of the housing market. Moreover, turning to inflation, there is evidence of a money illusion phenomenon in the housing market although the actual effect of inflation on the housing market, depends on the empirical data selection or method. Finally, several studies have shown that a bi-directional relationship exists between the unemployment rate and changes of the housing prices, and a positive correlation between the changes of prices and population changes.


Figure 2: Housing Price Index in Greece



We performed an empirical analysis of the Greek Housing Market based on monthly data for the period 1994:Μ1 to 2012:Μ9. Housing price index (Fig. 2), the interest rate, the CPI, the industrial production index and the mortgages are treated as endogenous. On the other hand, we employ the money supply M1, the unemployment rate and a structural break (impulse dummy variable) as exogenous. An error correction model with a deterministic part was employed, capturing both the short-run and the long-run dynamics of the model. Methodologically we used a two stage estimation procedure discussed in Lütkepohl and Krätzig (2004) which allows us to account for the exogenous variables. The basic conclusion of our analysis can be summarized as follows: first, we find that an equilibrium relationship exists. The following variables affect positively the housing market in the long run. Mortgage loans emerge as the most important variable in the long run, followed by interest rates. Dynamic analysis reveals that the housing price index responds to mortgage and interest rate shocks, while shocks to the other variables of the model do not affect HPI in a significant way. In the long run the causal relationship direction is from the mortgages and interest rates to housing prices. In the short run, mortgages and industrial production  Granger-cause HPI. Overall, mortgage loans is the variable to watch if you want to forecast house prices in Greece. [1]Leung, C. (2004), “Macroeconomics and housing: a review of the literature”, Journal of Housing Economics, 13(4): 249-267.

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Jun 16 2014

The Paradox of Reform

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By Nikolaos Zahariadis

Crises are both risks and opportunities. They create uncertainty and ambiguity not only because they tend to bring about change but also because they simultaneously point to different directions of policy. Politicians are torn between two opposing forces. They face the challenge of urgently needing to respond to the exigencies of the moment while being tempted by the opportunity to implement long awaited reforms. Response is defined as the short-term effort – e.g., tax increases and spending reductions – to return things back to “normal.” Reform makes deep, structural changes in policies – e.g., tax collection and public employment – to bring about a new “normal.” There are incentives to move in both directions at once which are periodically updated by elections. However, quite often politicians end up using crisis rhetoric to undermine reforms and return back to the same policies that caused the crisis in the first place. Following the Euro-elections, the Greek government of Antonis Samaras appears to be heading in precisely this direction.

The Prime Minister emphatically proclaimed he received the electoral message: things must change and remain the same. By this he meant policies would remain largely the same whereas the people crafting and implementing the policies, i.e., the cabinet, would change substantially. But this is the surest recipe for failure.

There is no denying that progress has been made in meeting at last some of the targets specified in the bailout package. Revenues are up significantly, there is even a substantial primary budget surplus, something that Greek governments have not accomplished since the 1950s. Economic growth appears tenable in the near future, bringing to an end the country’s longest recession since the dark days of World War II. But the current trajectory is not sustainable. The reason is not reform fatigue, as most analysts claim, but the haphazard implementation of reforms.

The biggest enemy of economic growth is uncertainty. This is because investors need to know the rules of economic competition to estimate with some degree of confidence the likely returns to their investment. Structural reforms, such as improved collection measures, as opposed to short-term policies, such as tax increases, create even more uncertainty because they have long-term consequences. It is imperative that the government keep the same people who produce results at the helm. Instead the Prime Minister decided to change leadership in key ministries, most notably the ministries of Finance, Development, Health, and Education although he kept Mr. Mitsotakis in the ministry of Administrative Reform. If particular individuals meet targets and faithfully implement very difficult measures, such as those espoused by Mr. Stournaras in the Ministry of Finance, what is the point of changing leadership? It is extremely difficult under current conditions for Greek policy makers to build rapport with Greek voters and the country’s external creditors because of the terrible record most Greek politicians have in actually doing what they are supposed to be doing. As the old saying goes, “if it ain’t broke, why fix it?”

The Prime Minister proclaimed that the government needs to stay the course but correct “some injustices in implementation.” His statement has been interpreted as an attempt to recalibrate the balance between the adverse effects of reforms with the government’s political interests. Stournaras and the outgoing general secretary for revenues Haris Theoharis, who held an independent five-year civil service position, were blamed by many within New Democracy, the conservative party which is the senior coalition partner, for its lackluster performance at the European Parliament elections on May 25.

But the Prime Minister, and the deputy Prime Minister, went further. They brought in new faces augmenting the number of ministerial positions to 46, from 42 in 2013 and 39 in 2012, as if Greece’s problem is the small number of its leaders. Many of the newly appointed ministers are well known for their combative, partisan style. So why appoint them? It may be to reconnect, as Reuters reported, with their parties’ parliamentary groups and traditional members.

If the point is to stay the course, why change? If the point is to correct injustices, why the ministers who have produced results, and why wait until after the election? If finally the point is to reconnect with the partisan bases, isn’t this another way of going back to the old clientelist policies of the past?

The Prime Minister is keenly aware of the need to energize his partisan base but he must also remember the necessity to produce results. Energizing his partisan base may keep him in power for a short time but only reforms will produce the results needed to keep him in power for the long-term. This is especially true in light of the presidential election in February 2015. The government needs allies who will not come from partisan frenzy but from mollifying the opposition. The only way to gain the (even tacit) support of the opposition is to convince voters their sacrifices will bring better days, there is light in the end of the tunnel. Only consistently and honestly implemented reforms, and not the clientelist policies of the past, will convince voters to pressure policy makers to come to some form of consensus. Regardless of short-term electoral gains, undermining reforms will bring yet more failure.


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May 27 2014

Few Surprises from Cyprus in the European Parliament Elections

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By James Ker-Lindsay

Sunday’s European Parliament elections in Cyprus, the third set of elections since the island joined the EU in 2004, yielded few surprises. As expected, the governing right-wing DISY, which is aligned with the European People’s Party (EPP) topped the results and returned two MEPs. In second place was the Cyprus communist party, AKEL, which is aligned to the European United Left (GUE-NDL), also elected two MEPs. The last two of the island’s six seats were allocated to the centre-right DIKO and centre-left EDEK; both of which are, somewhat confusingly, aligned to the Socialists and Democrats (S&D). Therefore, despite the fact that four of the six MEPs are new faces, the overall party allocation of seats remains the same as the last parliament.  Continue reading

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May 23 2014

European Parliament elections: the national campaigns in South East Europe

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EU SEEEuropean Parliament elections are being held on 22-25 May 2014, with voting already under way in some countries across Europe. Our staff (teaming up with EUROPP Blog and South East Europe @ LSE) gives a final look at the national campaigns for each of the South Eastern European countries, highlighting the national polling and the key domestic issues.


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May 12 2014

EU Election: Austerity will make for Lively Contest in Greece


By Dr Spyros Economides

This article was originally published on The Conversation. Read the original article.

The Greek public will go to the polls on May 25 as a massively divided electorate. The obvious factor which shapes public opinion is the continuation of an economic crisis which has resulted in a six-year recession and ongoing austerity programme which has led to a massive contraction in the Greek economy and dramatic falls in levels of income and standards of living. Continue reading

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Apr 29 2014

Two tales of wage adjustment

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by Rebekka Christopoulou and Vassilis Monastiriotis *

It is well known that in the last five years Greek wages have collapsed both in the public and in the private sector. What is perhaps less known, owing in part to the attention of much of the policy debate on the cuts in the public sector, is that the wage adjustment in the two sectors has been equally deep. In fact, the private sector experienced if anything more radical changes in its pay-structure, with elements of increasing commodification, while the public sector continues to offer advantageous wages to privileged groups, despite the policy focus on the “rationalization” of pay in the sector.

During the crisis, the Greek government initiated three major waves of public wage reform. In 2010, all wages were cut horizontally (by 10%) and holiday bonuses were also reduced. In 2011, pay-scales for the so-called “narrow” public sector were unified – a process which involved a marginal increase in basic pay combined with the abolition of most non-basic benefits. At that time, the unified scales did not apply for civil servants paid under special pay-scales, or for public law contracts in utilities and entities. The unified pay-scales were extended to these categories of workers in 2012.

In the private sector, labour reforms came later – after 2011 – when the government prioritized the reduction in the current account deficit and the increase in wage competitiveness. Among others, the government degraded collective bargaining agreements, drastically cut the minimum wage (by 22%), and selectively opened some of the so-called ‘closed-professions’ (deregulation of occupational licensing).

Despite the extensive debates that these developments have spurred, there is a lack of detailed analysis regarding the speed, depth, and qualitative characteristics of the wage adjustment in the two sectors. We conducted such an analysis using data from the Greek Labour Force Survey (see Research Paper No. 9 published by the Crisis Observatory).

Our analysis shows that the average monthly wage (for regular pay, i.e., excluding bonuses) in the private sector fell equally and sooner than in the public sector. The overall reduction in the public sector over 2009-2013 was 22.5% and took place mostly after the enforcement of the unified pay-scales (post-2011). The corresponding wages in the private sector fell slightly more (by 23.2%) and with a stable speed for the duration of the crisis. That is, they started falling before the decrease in minimum wages and the deregulation of collective bargaining. The decline in hourly pay in the private sector was slightly smaller, but it was combined with a large decline in average weekly hours of work.

As a result, not only was the public wage premium sustained during the crisis, but also increased by a small margin. In 2009, public sector employees earned on average 8.8% higher pay than private sector employees with the same characteristics (education, experience, family status, region of residence, occupation and sector of employment, type of contract etc.). In 2011 this percentage increased to 14.6% and in 2013 it fell to 9.3%.

As our econometric analysis shows, the wage adjustment had different qualities in the two sectors. In the private sector, the fall in demand exerted a downward pressure on wages that was two to three times larger than the actual wage adjustment observed in the data. This is because the downward pressures were counterbalanced by drastic changes in the valuation of worker and job characteristics (education, sex, experience etc) in this sector, which caused skills like education to be rewarded much better today than before the crisis.  For example, one extra year of education affords today a 2.3% higher wage in the private sector, while in 2009 the corresponding reward was 1.5%. Likewise, the returns to an extra year of labour market experience increased from 1.5% to 2.4%.

This development brings forward a very positive message: the higher rewards to skills associated with higher productivity have the potential to stimulate a significant sectoral reallocation of labour as the country starts exiting the crisis and employment trends recover. If the ‘rationalisation’ and ‘commodification’ of pay in the private sector is to be maintained past the crisis, , this will mean that private-sector employment will become less and less a “solution of last resort”, thus attracting more – and rewarding better – skilled workers, helping in this way wane the long practice of “queuing” for a public sector job.

In contrast to the changes in the private sector, the public sector wage cuts were accompanied by very marginal adjustments in the valuation of worker and job characteristics.  The returns to characteristics such as education, experience, and occupation remained roughly unchanged throughout the crisis – and, as a result, the public sector continued to be, as it was before the crisis, more generous towards the unskilled and more frugal towards the skilled. In this sense, despite the policy changes and their intentions, public wage cuts were largely horizontal. This is perhaps a factor that explains the recent pressure from the troika for further wage reforms.

Of course, the LFS data do not reflect all dimensions of the wage changes during the crisis. They do not capture, for example, the cuts in non-regular public wages or the informal wage cuts in the private sector. However, they allow two safe conclusions: first, that – considering the decline in private-sector wages and employment combined – the crisis impacted more the private sector workers relative to public sector workers; and, second, that despite the extensive – and painful – reforms, the rationalization of the public-sector pay system has not really materialized.

* A version of  this article (in Greek) appeared in newspaper Καθημερινή on 27/04/2014 (link)

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Oct 8 2013

Beyond the confusion, a decisive shift

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by Professor Kevin Featherstone

A week ago, Greece had some of its best headlines in the international media since before the crisis began.  The quick and decisive actions against Chrysi Avghi showed the strength of the democratic spirit.  This was a fight-back against a Neo-Nazi force at a time when the extreme right was making inroads into the stagnant politics of other European societies.  I felt proud of Greece when explaining these actions to my friends in London.

The previous week I’d witnessed a Chrysi Avghi street protest in Athens.  I came away with a deeply disturbing image of the intimidating swagger of a young man, his faced covered, walking ahead of the demonstration, inviting onlookers to challenge his command over the street, as the police stood back.  The closest parallel I’d witnessed previously was of English football hooligans or of the Protestant ‘Orange Order’ marches.  Far from being the worst episode of Chrysi Avghi protest, the young man was nevertheless mocking authority and ready to unleash the passion for violence evident in his party. The British friend alongside me had never been to Greece before and I despaired at what she was thinking as we watched.

Then, on Wednesday, it seemed that the most laudable of intentions risked being thwarted by state confusion, if not incompetence. The Court decided that three Chrysi Avghi members could be released.  Yet, the next day, Michaloliakos, Lagos and Patelis were remanded in custody.  Was there such a difference in the strength of the evidence or, rather, was it an acknowledgement by the Court of the public outcry after the first were released?  If the latter, this would be very worrying.  The preparation of the cases themselves seemed a little flaky.  The indictments had been trailed across the newspapers, breaking legal safeguards.  Then the contact details of a ‘protected’ witness had been given to the accused, putting them at great risk.  For the democratic spirit to triumph requires proper preparation and avoiding an ERT-like debacle.  The rest of the world will celebrate not only because the right people are standing trial, but also only if the right process and principles are followed.

The most worrying aspect of this episode, though, has been the admission that the authorities have had files and files of evidence against Chrysi Avghi and had sat on them, doing nothing.  We had a flashback to the Lambrakis Affair and the collusion of the police with the dark forces of pre-junta Greece.  The admission undermined the legitimacy of the state’s own institutions and fanned foreign exasperation of what kind of system exists in Greece.  Thankfully, the purge of senior police figures helped to signal a new resolve.

Indeed, beyond the immediate confusion, the events of the last week need to be put in larger perspective.  The decision to act against Chrysi Avghi may come to represent a decisive turn in Greece’s political class.  The will to confront fascist criminality was heard and not only in Greece.  A bridge has been crossed and it won’t be easy to retreat.

The electoral base of Chrysi Avghi is a fragile one – both in its sense of economic and social vulnerability, but also in it searching for almost any protest lead.  The Greek electorate is not turning fascist; instead, more may be coming rejectionist.  The Chrysi Avghi members arrested may have hidden Nazi memorabilia and swastikas in their homes for late night thrills, but ordinary ‘Kostas’ or ‘Maria’ does not.  Repeated action against the party can only expose how ‘un-Greek’ these people are.  TV reminders of the Athens famine and the Holocaust would also be timely.

This last week, mainstream Greek politics found a common purpose and showed a new willingness to face down opponents.  Greece’s friends have yearned for such a moment.  We can only hope that the shock of this discovery will embolden it to continue forward.

Kevin Featherstone is Professor of Contemporary Greek Studies at the London School of Economics, where he heads its Hellenic Observatory.

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Sep 27 2013

Until Angela Merkel forms a governing coalition, Greece will continue to be in limbo

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by Dr Theofanis Exadaktylos 

 “Triumph for the queen of austerity – Pressure to the South for reforms”*

Angela Merkel’s triumph in the German elections on Sunday and her re-election as Chancellor has made headlines across the world. But what does her third term in office mean for Greece, which has been struggling with implementing new measures, taking reforms forward and demonstrating primary surpluses in the budget? Continue reading

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