Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

From anti-social policy to generalised insecurity:

The Greek crisis meets the decline of the European Social Model

Theo Papadopoulos 1 and Antonios Roumpakis 2

1
Department of Social and Policy Sciences, University of Bath, UK (T.Papadopoulos@bath.ac.uk)
2
Department of Social Policy and Social Work, University of York, UK (@york.ac.uk)
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

1. Introduction
Our article examines key aspects of the Greek crisis and explores it under the light of the
ongoing decline of the European Social Model. It is argued that the austerity measures
implemented as conditions for receiving consecutive ‘bail-out’ loans have had, so far, a
very negative impact upon the Greek economy, politics and society. Further, it is argued
that labour market reforms underway in Greece and the rest of Southern Europe signal
some very worrying developments with respect to the social dimension of European
integration. Indeed, especially in the area of collective agreements, when we view these
reforms from a European perspective we can identify the rise of wage policy
interventionism by the EU; a new process that ‘combines European requirements for
national wage and labour market policies with the threat of economic sanctions’ (Busch et
al (2013:8). In turn this signals the intensification of the (neo) liberalisation of the European
Social Model and puts under severe doubt the prospects for a more social Europe that will
prioritize social objectives and rights over economic freedoms.

The article is structured as follows. The next section deals briefly with the causes of the
politico-economic crisis in Greece. It is followed by a discussion of the economic and
political effects of the crisis and the impact of austerity measures and reforms. The article
continues with a longer section that discusses the impact upon the Greek society and,
especially on the familistic model of social reproduction in Greece. In its last part, the
article explores the character of labour market reforms in Greece within the context of the
ongoing decline of the European Social Model and reflects upon the future prospects for a
more social Europe.

2. The causes of politico-economic crisis in Greece

Widespread media reports about a looming Greek economic crisis began in October 2009
when the, then, newly elected government of PASOK (traditionally, a centre-left party), led
by George Papandreou, was reportedly ‘surprised’ to discover that Greece’s public budget
deficit was much higher than previously calculated by the Greek statistical authorities. By
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

April 2010, Greece became the first Eurozone member state to formally seek financial
assistance from the so-called troika, comprising the International Monetary Fund, the
European Union and the European Central Bank. The austerity measures and neo-liberal
economic reforms that accompanied the IMF/EU/ECB so-called ‘bail out’ loans were
unprecedented, in their scope, severity, volume and speed. Severe cuts in pensions and
wages, extraordinary increases in taxation and dramatic decreases in public spending in
most welfare sectors (social security, education, health) accompanied the most extensive
de-regulation of industrial relations in Greek history and the abolition of many hard-won
socio-economic rights of numerous professions - both in the public and private sectors (see
Papadopoulos and Roumpakis 2012). These measures were taken in tandem with an
overambitious programme of far-reaching reforms in public administration that includes the
future dismissal of thousands of state employees, further privatisation of state enterprises
and the selling-off of public property.

Explanations of the causes of the Greek crisis oscillate between those that give emphasis to
domestic causes and those that emphasize systemic reasons. For the former, the crisis is
mainly attributable to the behaviour of a profligate society that 'consumed beyond its
means', and its corrupt governments that run large public debts and budget deficits. For the
latter approach, the crisis was the outcome of chronic economic inadequacies and lack of
policy options within the Euro, mostly outside the country's influence, with domestic
factors acting as triggers rather than as causes of the crisis. In an earlier work
(Papadopoulos and Roumpakis, 2012) we drew from both approaches to argue that the
eruption of the crisis was the combined result of ‘perfect storm’ conditions, both domestic
and external and placed it in a historical context of repeated state bankruptcies. We also
argued that the continuation and deepening of the crisis is a product of the very measures
that were taken, supposedly, to alleviate it.

In terms of the domestic causes, the politico-economic regime established after the collapse
of dictatorship in 1974 used state resources and public borrowing (see Figure 1) not only as
a means to legitimize the young democracy but also to maintain the political reproduction
of ruling elites (see Kouvelakis, 2011; Katsimi and Moutos, 2010; Karamesini, 2008) and
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

facilitate their enrichment in the context of the semi-peripheral Greek political economy
(see Fotopoulos, 1993). Thus, the current crisis in Greece is not purely economic in nature
but deeply politico-economic. It marks, among other things, the exhaustion of the politico-
economic regime that emerged in Greece in the last 35 years characterized by state
patronage and clientilism, extensive tax evasion practices (especially of higher earners,
businesses and powerful individuals) while privileging specific socio-professional groups
via a fragmented and highly unequal social security system (Petmesidou, 1991 and 2011;
Venieris, 1997). Further, its corresponding semi-peripheral political economy was
'benefiting' from the functioning of a substantial underground economy, that utilized
uninsured and precarious labour, keeping production costs low, while continuing with
familistic welfare arrangements that 'externalised' the costs of social reproduction to Greek
families (see Papadopoulos and Roumpakis, 2013). These costs continued to remain low,
especially since the mid 1990s, due to the extensive use of migrant workers, most of whom
where undocumented, especially in the agriculture, construction and domestic/care sectors.

Regarding the systemic factors, one of the key economic consequences of Greece’s entry in
the Eurozone in 2001 was the dramatic amplification of the already widening asymmetries
in productivity and competitiveness between Greece’s semi-peripheral economy and those
of core EU countries, asymmetries that followed Greece’s entry in the EEC in 1981 (see
Fotopoulos, 1993). Following the adoption of the Euro, economic growth in the Greek
economy was maintained primarily by boosting domestic demand through consumption
and to a lesser extent investment in construction and real estate. While the supply of cheap
credit from the European Central Bank (ECB) allowed the banking sector to expand
rapidly, at the same time the real economy did not yield enough streams of revenue to
prevent the accumulation of a high domestic debt while trade deficit worsened (see also
Lapavitsas et al, 2010).
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

Figure 1 Historical evolution of Public Debt as % of GDP in Greece,

1960-2012
180

160

140

120

100
% of GDP

80

60

40

20
Greece joins Greece joins Beginning of
the EEC the Euro financial crisis
0

Source: IMF (2011)

Note: Estimated data for 2012

The combination of these systemic factors contributed towards the ‘twin deficits’ of
Greece, on government budget and on the current account balance, which deteriorated
dramatically during the period 1999-2008 (IMF, 2011). The end result was that the negative
tendencies prior to the entry into Euro (trade deficits, dismantling of the structure of
production etc.) were further amplified. The lack of the policy option to issue its own
currency meant that, within Euro, Greece’s semi-peripheral capitalism stood little chance of
balanced endogenous growth (Lapavitsas, 2011; Polychroniou, 2011) similar to other semi-
peripheral EU economies like Portugal and Ireland (Mansori, 2011).

3. The politico-economic impact of the crisis and austerity

measures
The combined impact of the crisis and the austerity measures does not allow any room for
optimism, economically, socially or politically. Economically, the rapid decline in domestic
demand and industrial output was combined with the collapse of bank savings and the
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

closure of hundreds of thousands of small-medium (mostly family-owned) businesses. In

addition, unemployment has soared and private indebtedness has increased dramatically.
The real economy is in a dire state, with GDP continuing to contract year after year with
little or no prospect for growth in the short and medium term future. Socially, there is
ample evidence of negative developments in respect to social cohesion, poverty and social
exclusion, all of which are combined with a dramatic rise in suicides, social unrest and
social violence more generally, as well as continuous rise in xenophobia and racism.
Politically, nearly 3 years after the eruption of the sovereign debt crisis, the collapse of the
two-party system is evident. This collapse was followed by a substantial increase in
political uncertainty and political polarisation, marked especially by the spectacular rise of
the extreme right. Indeed, this crisis is deeply politico-economic in nature. It signals the end
of the politico-economic model adopted since metapolitefsi (the end of military dictatorship
in 1974) and the violent restructuring of the Greek social formation and especially its
familistic model of social reproduction.

Impact on Greek economy and employment

The austerity measures adopted under the agreements made with the IMF/EC/ECB
included, among other things, relentless taxation and substantial reductions in pensions and
wages. In effect, the Greek state has taken billions of Euros out of the (real) Greek
economy in order to reduce the budget deficit (and serve the debt) and the results, though
predictable, surprised negatively even the most pessimist analysts. By the end of 2011, the
Greek GDP had contracted by almost 15% while the Greek government estimated that by
the end of 2012 the Greek GDP would have contracted by a further 7% (WSJ, 2012). On
the other hand, according to a confidential report on the sustainability of Greece’s debt
(IMF/EC/ECB, 2011; see also Eurobank Research, 2011) the debt was estimated to reach
173% of GDP in 2012, approximately €373 billion, from 120% in 2009, the year prior to
the IMF/EC/ECB ‘bailout’ loan. In short, while the Greek economy continues to contract,
the Greek public debt as % of GDP continues to rise.

Given that the government shares such pessimistic estimations for the state of the economy
in 2012 (WSJ, 2012) one can only question whether there will be any return to positive
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

rates of GDP growth in the coming years. So far, the rapid decline in domestic demand,
industrial output and bank savings and the collapse of consumer confidence coincide with
dramatic increases in unemployment. Indeed, for most Greek citizens of working age,
reality in the labour market under the austerity measures marked ‘the end of the world’ as
they knew it. Official unemployment rate more than trippled - from 7.4% in May 2008 to
nearly 25% in September 2012 (Elstat data reported in FT, 2012) - with women and
especially young people hit particularly hard. For the Greek youth, migration emerges as
the main exit route to find employment. By the end of 2012, youth unemployment was
around 55% and female youth unemployment stood more than 60% (Elstat data reported in
FT, 2012). In fact, by 2012 Greece was the country with the highest unemployment rate for
women (see also Figure 2) and second highest for men and youth, after Spain; both in
Southern Europe and the whole of the EU.

Figure 2 Unemployment rates in the GIPS states, 2008 and 2012 (%)

Source: Busch et al (2013)

 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

Impact on domestic politics

The economic crisis was accompanied by a political crisis which saw the Papandreou
government replaced in early November 2011 by a tri-party ‘administrative’ government –
of dubious constitutionality - comprising PASOK, the (conservative) ‘New Democracy’
party and the far right LAOS party. This government was led by the unelected Lukas
Papademos, who was former vice president of the European Central Bank and ex-advisor to
G. Papandreou. Papademos’ government lasted from November 2011 to May 2012 and,
following two general elections in rapid succession (May and June 2012), Papademos was
replaced by Antonios Samaras, leader of the New Democracy (ND) party, who managed to
form a coalition government comprising his party, the substantially reduced in electoral
influence PASOK, and DEMAR, a moderate left-of-centre party. The May 2012 elections
saw a major change in the political scene in Greece, with more notable developments, the
electoral collapse of PASOK (from 43.92% of the vote in October 2009 to 12.2% in June
2012); the catapulting of SYRIZA, the self-described radical left-wing coalition, from
4.6% of the vote in 2009 to nearly 27% in June 2012 – narrowly missing becoming the first
party in votes - and the unprecedented rise of Golden Dawn, an ultra-right racist party with
neo-Nazi tendencies, which from 0.46% in the May 2009 European elections rose to 6.92%
in June 2012 general elections. In short, the traditional two-party system that dominated
Greek politics since the collapse of military dictatorship in 1974 is now confined to history.
New political formations are emerging in what is clearly a more polarised political
environment, where not only the effectiveness but the very legitimacy of austerity measures
is highly contested

4. Impact of the crisis and austerity measures on society and the model of
social reproduction
Times of crisis are often the best periods to observe key characteristics of social formations
and their degree of strength or tenacity. During periods of relative stability, such
characteristics can stay obscure or be rendered invisible by political discourses emphasising
progress, modernisation or, in the case of Southern Europe, discourses emphasising
processes of ‘catching-up’ with core European economies and welfare regimes. What the
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

crisis revealed - and not only for Greece but for the rest of Southern Europe - was the
existing (and now widening) fault lines between Southern and Northern/Western European
political economies and social formations. We have argued in a previous study
(Papadopoulos and Roumpakis, 2012) that the characteristics of South European welfare
states were not just endogenous by-products of ‘rudimentary’ development but, primarily,
the results of how their national political economies were integrated in the global and
European transnational economies. That is, as semi-peripheral economies that relied on
‘external growth strategies’ where competitiveness was based on the pursuit of low labour-
costs. In turn, this was translated in continuous attempts, on behalf of both employers and
the state, to minimize their responsibility for social reproduction. As Bakker and Silvey
(2008:3) argue, “the family and the state become important sites where the needs of social
reproduction are linked to the need of accumulation and where the state intervenes to offset
or offload the high costs of social reproduction onto or away from the family at different
moments in different locales”. Against this background, the political choice by both the main
parties that governed post-dictatorship Greece to avoid introducing a universal system of
social protection can be adequately understood. It served well the interests of both
employers and the state in minimizing their responsibility for social reproduction in a semi-
peripheral political economy. The result was the institutionalization of segmented and
residual social programmes and welfare policies and reliance on the traditional role that
family played in Greek society to provide social protection to its members.

Traditionally, in the familistic model of welfare capitalism in Southern Europe, and

especially in Greece, the family played a double role as the main institution for social
protection and care of its members and, simultaneously, as a key institution in the
reproduction of the particular model of semi–peripheral political economy. The role of the
family was not confined to household members but involved utilizing an extensive network
of kin that ‘provides a mechanism for aggregating and redistributing resources among its
members’ (Allen et al 2004: 116, see also Ferrera, 1996). In a recent study (Papadopoulos
and Roumpakis, 2013a) we argued that this role was interlinked with the capacity of the
family to consolidate and mobilise resources as
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

• an owner of property (especially private but also commercial real-estate)

• an employer (usually via family business)
• a member of the clientelistic political system
• a claimant of social security rights (through members able to secure such rights
through their participation in the formal labour market and especially though public
sector employment).

Further, we distinguished two periods in the social reproduction of the Greek familistic
model. The first period, that lasted until the mid-1980s was characterised by strategies of
‘maximisation of resources’. Greek families employed strategies of low economic risk that
gave strong emphasis on the accumulation of assets and real estate as key resources for
their security while avoiding over-exposure to debt and minimising their exposure to the
‘money nexus’. The second period, roughly from late 1980s until the eruption of the crisis,
was characterised by strategies of high economic risk which utilised market means for the
investment and consumption of these resources, strategies that were heavily promoted by
the state and banks. The excessive borrowing of households in order to invest in the stock
exchange, in the housing market, or in order to improve their living standards via, what
proven to be, unsustainable levels of consumption fuelled by cheap credit, resulted in
remarkable increases in private debt (see Papadopoulos and Roumpakis, 2009, Lapavitsas,
2011). These practices placed the traditional mode of social reproduction already in a crisis
trajectory, years before the eruption of the Greek sovereign crisis.

This point can be supported by analysing the evolution of private debt. Despite the fact that
Greek private debt is significantly lower that other Eurozone countries and the UK, private
debt and in particular household borrowing boomed a few years before, and especially
after, the coming of Euro. In fact it increased faster than the public debt (Lapavitsas et al,
2010) following a trend already set in the 1990s. Since 1994 and up to 2006, the total
increase of consumer credit touched upon the astronomical figure of 2,106% (Papadopoulos
and Roumpakis 2009). Sanctioned by the Greek banks, and helped by lower interest rates,
this expansion of consumer credit was mainly concentrated on mortgages and on consumer
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

loans and left the Greek households exposed to unprecedented levels of debt when the crisis
erupted.

Further, even before the EU-IMF bailout, the period 1995-2010 was characterised by the
expansion of precarious jobs in the formal labour market, both in the public and private
sectors (Karantinos 2006; INE-GSEE 2008). As a precondition for the ‘bail-out’ loan the
government accepted further moves towards the ‘flexibilization’ of the labour market and
strengthening of the rights of employers to ‘hire and fire’. Moreover, trade unions would
lose their right to refer to the Conciliation and Arbitration Service following disputes with
employers over wage increases and collective agreements (on the European dimension of
changes in collective agreements see also below). Additionally, as a precondition for the
tranche of the 2nd IMF/EU/ECB ’bailout’ plan, the Greek government voted to abolish
tenure in the public sector. Cornerstones of the Greek labour law are removed fast
contributing to the intensification of ‘flexibilization’ of the Greek labour market.
Empirically, this is captured by the significant changes in the number of full and part-time
contracts signed in 2010 and 2011. New full-time contracts in 2009 represented 79% of all
contracts. By 2010 they dropped to 66,9% and by 2011 they were further reduced to 60,4%.
In a reverse fashion, new part-time jobs in 2009 represented 16,7% of all contracts. By
2010 they increased to 26,1 and by 2011 they reached 30,9%. New casual jobs also
increased from 4,3% in 2009 to 8,95% in 2011 (Chalaris, 2012).

The combination of exposure to high levels of private indebtedness and increasing

employment insecurity prior to the crisis meant that the familistic model of social
reproduction was already quite weak prior to the eruption of the sovereign crisis. The
adoption of the austerity measures accelerated what was already a looming crisis in the
familistic model of social reproduction and, in fact, resulted in a paradoxical, and very
disturbing, development: the social risks, hardships and, ultimately, the responsibility of
dealing with the impact of the sovereign debt crisis were transferred almost singlehandedly
to the working population, pensioners and their families, both in the public and private
sector. While the costs of the sovereign debt crisis are ‘familialized’, Greek families cannot
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

use traditional strategies to protect their members, given that they key pillars of their
security (relatively protected employment for at least one member of the family and small
ownership) are under attack.

According to statistics of the National Bank of Greece (NBG 2011), the distribution of
private debt among household and business debt reached 59.2% and 60,2% of the GDP
respectively. The same report highlighted serious delays in the payment of mortgages while
non-payment of consumer loans has reached 20%. More recent surveys in the Athens area
reported that 6 out of 10 households find it very hard to meet their tax obligations, loans
and utility bills while 52% reported difficulties in meeting even their basic everyday needs
(IME-GSEBEE, 2012). Further, according to the latest Eurostat statistics, 31% of the total
population were at risk of poverty or social exclusion at the end of 2011 with the respective
figure for children less than 18 at 30.4 %, while the children at risk of monetary poverty of
parents with low education climbed to 50.2% (Eurostat, 2013; see also Elstat, 2012).

Apart for a small minority, most Greek families experience a dramatic decrease in their
wellbeing and their socio-economic security, as repeated surveys in subjective economic
hardship reveal. In 2011 Gallup’s ongoing Global Wellbeing Survey reported 60% of
Greeks ‘struggling’ with their current life while ‘the percentage of Greeks who rate[d] their
lives so poorly that they are considered ’suffering’ more than tripled to 25% in 2011, from
7% in 2007’ (Gallup, 2011a). This was the highest percentage among the Eurozone
countries and is expected to increase further. Using questions measuring the Index of
Personal Economic Distress (IPED) an epidemiological study conducted by the Athens
University Research Institute for Psychiatric Health recorded a nearly 21% increase in
respondents reporting very high economic distress in comparison to 2009 (URIPH, 2011).
The same study recorded substantial increases in feelings of melancholy, symptoms of
clinical depression, suicidal thoughts and self-reported suicidal attempts. More recent
comparative studies on the impact of austerity cuts upon health recorded dramatic rises in
suicides as well as incidence of mental health disorders across Europe, especially in Greece
and Spain (Coghlan, 2013). According to Violatzis (2011) the total number of suicides
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

doubled in the years of the crisis; an unprecedented development for Greece, a country that
traditionally recorded one of the lowest suicide rates in the EU.

Change in gender dynamics and lack of public support for families

Despite the very high female unemployment in Greece many women tried to enter again the
labour market after the crisis. Reflecting on this observation Karamessini (2011)
mentioned ‘It’s an attempted defence against the crisis […] As joblessness rises among
men, a growing pool of women are seeking to offset losses in household income [but] most
aren’t finding work’. This tendency was confirmed by Paul Swaim, a principal OECD labor
economist. Although female employment rate in Greece dropped since 2008, female labor
force participation rate increased by 2.9 percent (almost 3 times E.U. average), which, as
Swaim argued ‘shows that Greek women ventured into the labor market in a bid to cushion
the impact of the recession on their family’s income but often failed to find a job, at least
one that is reported to the government’ (Swaim, 2011).

Further, those lucky who do find jobs, often find positions inferior to their qualifications
while salaries are so low that the prospect for young couples to have more than one child
has almost disappeared. At the same time any childbearing plans for childless couples are
pushed way back in time (see the extensive report of New York Times, 2011). And more,
under conditions of high and rising unemployment, with employment rights severely
curtailed and job insecurity rampant, employers can make the most audacious, and often
illegal, demands. It has become almost universal practice ‘in the private sector [that] if you
look for a job and you are of reproductive age the first thing you have to do is give your
word of honour that you will not get pregnant’ as Pantazi, chair of the Women's Union of
Greece, commented in an interview in the Guardian (2012). Against such developments it
is reasonable to assume that the already very low fertility rate in Greece (estimated at 1.39
in 2011) will fall even further.

Moreover, it is expected that severe cuts in the public sector, both in expenditures and in
terms of personnel, are already having a negative impact upon employment security and it
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

appears that this impact is far more severe upon women than men. Karamessini (2011)
mentioned that “the state used to represent a guaranteed source of employment for women
and had boosted gender equality” with almost 60% of female university graduates
traditionally finding employment in the wider public sector. Further, in a NYT report
(2011) it was also mentioned that ‘the prospects for female entrepreneurs are also slim as
small businesses, which constitute 96 percent of all enterprises in Greece, are closing at a
rate of one in four’.

At the same time, a large number of publicly provided services and sectors (e.g. hospitals,
schools, universities, welfare services) are facing a double challenge. On the one hand they
have to offer their services under serious economic constraints, reduced staff and budgetary
cuts - as the state withdraws its funding. On the other hand, it is reasonable to assume that
they are facing substantial rises in the demand for accessing their services given that large
parts of the middle classes begin withdrawing from private services as their incomes
diminish and, further, that the demand on the voluntary and non-governmental sector to fill
the gap will intensify (see Eleftherotypia, 2011 and the Guardian, 2012). Indeed market-
based solutions are no longer an option for many families. As Maria Stratigaki, head of the
government’s General Secretariat for Gender Equality, mentioned ‘paying for help with
child care’ is an expense that fewer and fewer women will be able to afford’ (NYT, 2011).

4. The Greek crisis as part of the crisis of the European Social Model
Against the evidence presented thus far, it is important to see not only the quantitative but
also the qualitative aspects of the austerity measures and reforms and place them in a wider
European context. It is evident that the austerity measures and reforms undertaken so far
(for a detailed discussion of reforms see Venieris, forthcoming) are firmly within a
neoliberal trajectory which not only affects negatively Greek citizens but contributes to the
intensification of the (neo)liberalisation of the European Social Model. This dimension was
recently explored in a comprehensive report by Busch et al (2013) who explored how
austerity measures in Southern Europe threaten the EU’s Social Dimension. Having
identified six policy objectives of the European Social Model (macroeconomic policy
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

aimed at full employment, real wage increase reflecting productivity, social security
offering high levels of protection, employee participation rights, strong public sector,
priority of social rights over market freedoms incorporated as clause in the EU Treaty)
Busch et al gathered ample evidence to demonstrate that, aside the causes of the crisis, the
type of austerity measures and their politico-economic effects in Southern Europe are
deleterious for the objectives of the European Social Model. They undermine the social
dimension of EU’s integration process, rendering progressive politics towards a more social
Europe increasingly impossible.

For these authors the ‘long march’ of the liberalization of the ESM began years before the
crisis of 2008/9 by means of continuous undermining of employment and social rights,
‘labour market reforms, decentralisation of collective bargaining systems, wage
moderation, a reduction in relative pension levels, cuts in public health services and
privatisation of services of general interest’ (p.6). Most of these have taken place in
Western and Eastern EU member states whereas in Southern Europe the failure of many
attempts of such reforms can be attributed to serious and sustained defence of hard-won
rights coming from trade unions and parties of the left. For Busch et al (2013) ‘since the
global economic crisis of 2008/2009 and austerity policy in the wake of the euro crisis, the
political and social balance of power has been changing in Southern Europe’ (p.6). This
marks a major setback in ‘the realisation of a normative concept of a European Social
Model – which could already be observed before the crisis’ (p.7).

Box 1 Changes in collective agreements systems in Southern Europe

(already made or planned for the near future)

- legal extension of opening clauses for enterprise level deviations from branch collective
agreements (Italy, Portugal, Spain);
- absolute priority of company agreements over all other collective agreements, with
simultaneous abolition of the favourability principle (Greece, Spain);
- the possibility for deviating company agreements with non-trade union workers’
representations (Greece, Portugal);
- limitation of the validity of collective agreements after expiry (Greece, Spain);
- formal restriction of the general validity of collective agreements (Portugal)

Source: Busch et al (2013:5)

 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

One of the most worrying developments is the rise of EU’s new wage policy
interventionism which ‘combines European requirements for national wage and labour
market policies with the threat of economic sanctions’ (Busch et al, 2013:8). It takes place
against the background of an explosive increase in unemployment in Southern Europe and
is used as a power resource for legitimising and implementing structural reforms against
collective agreement systems that traditionally offered high levels of coverage among the
working population (see Box 1). In particular, under the rhetorical guise of improving the
quality of economic coordination in the EU, and using the new Euro Plus Pact as a legal
framework, wage policy is now explicitly considered as part of European economic
governance and in fact ‘the most important adjustment variable for promoting
competitiveness’ (Busch et al, 2013:8). Not only this goes against the fundamental
principle of the ‘voluntary’ nature of the contract between labour and capital in a labour
market but violates the EU Treaty itself which explicitly rules out any EU competence in
respect to wage policies (Article 153, paragraph 5). If we combine this negative
development with the prioritisation of economic ‘freedoms’ over collective labour rights
that is being witnessed over the last decade in key rulings of the European Court of Justice
in cases pertaining cross-border industrial relations (see Papadopoulos and Roumpakis,
2013b), we can only conclude that the future of national collective agreements - probably
the most fundamental institutionalised power resource for European workers - is now
seriously under question across Europe. Calling it a new form of authoritarian
neoliberalism, Busch et al (2013) lament the developments in Southern Europe where ‘in a
short time historically developed institutions have been destroyed and reshaped in
accordance with a neoliberal master plan under the auspices of the Troika’ (p.13).

Conclusion: Anti-social policy in Greece amidst the rise of authoritarian

neoliberalism in Europe
If we adopt the classic normative view of social policy - originally developed by authors
like Otto von Zwiedineck-Siidenhorst to describe sets of policies that place the cohesion of
society at their core (Cahnman and Schmitt 1979: 51) - then the sum of the austerity
measures and reforms adopted by successive Greek governments can be indisputably
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

characterised as anti-social policy. With large numbers of households and family business
indebted, record high unemployment and poverty rates, and successive closure of hundreds
of thousands of small businesses, middle classes in Greece are facing a free fall in their
incomes and an unprecedented assault in their socio-economic security. The strategy of
internal devaluation promoted by the troika and adopted by the Greek governments, the
cuts in salaries, benefits and pension entitlements, and the imposition of a highly regressive
tax system, continues to place Greece in a downward spiral of a prolonged recession from
which no end is in sight. At the end 2012 the Debt to GDP ratio exceeded 172% of GDP,
from 120% in 2009, the year prior to the ‘bailout loan’ agreement. Moreover, at the end of
the year of writing this article (2013), Greek GDP is expected to shrink by a further 4.5%,
bringing the total contraction of GDP to 25%, since 2008 (Elstat, 2013).

Out of the ruins of the traditional familistic mode of social reproduction, undermined by
more than a decade of indebtedness and almost 3 years of relentless austerity, a political
economy of generalised insecurity emerges. Although nearly all social risks are
‘familialized’, access to resources for social protection is severely restricted for large
number of Greek families. The electoral collapse of the established political parties that
supported the austerity measures, the rise of political polarisation, xenophobia and racism,
the rise of poverty and social dislocation, the dissolution of social cohesion and the re-
affirmation of defensive nationalism against what is perceived as a massive attack on
national sovereignty are only a few of the socio-political outcomes of the crisis and the
anti-social policies currently implemented. Combined with massive unemployment and
underemployment, increases in employment insecurity, the removal of hard-won socio-
economic rights, and continuous attacks on incomes and assets, they create a nightmare
scenario for socio-political stability amidst continuing economic decline. Indeed, the Greek
social formation faces its biggest challenge since WWII. As long as the measures adopted
in Greece, and the rest of the Southern Europe, continue their catastrophic impact upon the
economy, politics and society there is little hope that the current trajectory of integration in
a market-driven federalist EU will change. Under such conditions, it is perhaps now, more
than ever in the post-war European history, that a new path is desperately needed to revive
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

not only the Southern European economies and societies but the European Social Model
itself, placing it firmly at the centre of European integration.
 Κοινωνική Πολιτική / Τεύχος 1 / Απρίλιος 2013 – Papadopoulos Th., Roumpakis A.

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