Greece, Financialization and the EU by V. Fouskas

Author:V. Fouskas [Fouskas, V.]
Language: eng
Format: epub
ISBN: 9781137273468
Publisher: PalgraveMacmillan
Published: 0101-01-01T00:00:00+00:00

5.2 The Right against the Right

As the USA and Britain began drifting away from Keynesian policy-making in the 1970s and 1980s in order to arrest outsourcing and the fall of profitability in manufacturing, other states in the core had to adjust their policies to this twin programme. Greece, which formally qualified as a member of the core in 1981, also had to start adopting a neo-liberal agenda, i.e., liberalization of the banking and financial system, welfare state retrenchment, wage cuts, deregulation of labour market and wide ranging privatizations of public utilities and business. None of this happened – in fact, quite the opposite – and Greece, after all, never really had a welfare state.12

Karamanlis, amid the Cyprus crisis, regrouped the right-wing elements of the regime forming a new party, the New Democracy (ND), and later won the election held in mid-November 1974 with a spectacular 54 per cent of the vote (see Table 6.2 in the next chapter for a comprehensive breakdown of all electoral results from 1974 to 2012). On 4 September 1974 Andreas Papandreou founded PASOK. In December Karamanlis called a referendum on the future of the monarchy, which saw only a mere 30 per cent of the Greeks being loyal to the Crown (most votes in favour came from traditional conservative areas in Peloponnese). Karamanlis solved once and for all the old dilemma dominant in Greek politics since the Venizelos era, namely the dilemma ‘Monarchy or Democracy’ – hence the name rendered to the period stretching from 1974 onwards as ‘Third Hellenic Republic’.13 A new republican Constitution was formed and the two Communist parties, the result of a split in 1968 over the Soviet invasion of Czechoslovakia, KKE and KKEes, were legitimized.14 Karamanlis withdrew Greece from the military structure of NATO, a tactical move to appease popular discontent over the Cyprus issue and the wide-spread popular belief that the junta was engineered by the Americans and Henry Kissinger, at the time both National Security Adviser and Secretary of State. One of Karamanlis’s greatest successes in foreign policy was the gradual abandonment of the doctrine that ‘the war danger comes from the North’, imposed by the USA’s global ideational policy of the ‘war on Communism’. Instead, Karamanlis, after the Turkish invasion of Cyprus, considered Turkey to be the principal rival of Greece in the Eastern Mediterranean, thus changing the country’s security priorities and responding by re-militarizing all East Aegean islands in defiance of the Treaty of Lausanne (1923). Defence spending increased massively under Karamanlis, a fact that contributed to the country’s deficit (by the late 1970s Greece was spending as much as 5.75 per cent of its GDP on defence).15 It seems that the Right understood the simulacrum of the ‘war on Communism’, thus adopting post-Cold War security policies before the end of the Cold War itself. At the same time, Karamanlis began negotiating Greece’s entry into the EEC. Skilfully separating Greece from the increasingly complex Iberian negotiations, Karamanlis successfully reached an accession agreement with the Community in April 1979.

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