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Former Greek premier Andreas, father of the current Prime Minister George Papandreou, seen here in 1994. (Aris Saris/AP)
Former Greek premier Andreas, father of the current Prime Minister George Papandreou, seen here in 1994. (Aris Saris/AP)

Greece's legacy of 'deep Pasok' Add to ...

"Misfortune spread throughout the state. There were many cases of corruption. Our creditors asked for a settlement; and the ambassadors were very pressing."

Yannis Makriyannis, Greek military hero and memoirist (1797-1864)

Economic distress, bribery, debts and foreign pressure: it can sometimes seem as if not much has changed in Greece down the ages. The events to which Yannis Makriyannis referred took place soon after the war of independence against the Ottoman empire, a costly 11-year struggle that culminated in 1832 with the Greek state no sooner born than facing demands for loan repayments from European powers.

Today, Greece's debts are so large that the country is again a ward of the international financial system, obliged to swallow unpleasant economic medicine prescribed by foreigners so that they can get their money back.

True, certain differences stand out. Though Greece accounts for only 2.5 per cent of the 17-nation euro zone's economic output, its debt crisis has the potential to destabilise the public finances and banking sectors of other European countries on a scale unimaginable in the 1830s. However low an opinion Germans have of Greece's fiscal improvidence and blood-sucking of the state, it is unthinkable that they would emulate the Europeans of Makriyannis's era and impose a teenaged Bavarian prince as Greece's head of state.

External pressures on Greece are nevertheless rising. All week the nation's euro zone partners made clear that they wanted Greece's socialist government and its conservative opponents to unite behind a five-year program of tax increases, spending curbs, public sector job cuts and privatizations agreed with the European Union and International Monetary Fund. Euro zone finance ministers went so far as to term national unity a "prerequisite for success."

The appeal fell on deaf ears in Athens. Antonis Samaras, leader of the opposition New Democracy party, said he would vote against the austerity program in parliament. Evangelos Venizelos, the newly appointed finance minister, irritated his European colleagues with hints the government might seek to alter the program, even though the austerity measures hold the key to a €12-billion EU-IMF loan without which Greece will default next month.

For some EU policy makers, such behaviour comes across as obstinate, slippery and not untypical of a country that has often looked the odd man out since it joined the old European Economic Community in 1981. In the early years of membership, such defiance tended to arise mainly over foreign policy.

Notoriously, Andreas Papandreou, a former premier whose son George is the present Prime Minister, broke ranks with his allies and visited Poland in 1984, three years after the suppression of the free trade union Solidarity under martial law. In the 1990s Greece displayed ostentatious solidarity with the Serbia of Slobodan Milosevic, the deceased dictator, during the wars of the Yugoslav succession.

Since the euro's birth in 1999, foreign policy disputes have faded in comparison with European concerns about Greek economic mismanagement, corruption and inefficient public administration, which appear incompatible with long-term participation in Europe's monetary union. Greek reformers acknowledge the truth of these complaints and often sound as angry or despairing as their counterparts in Brussels or Berlin.

One reformer tells the story of the head of a government department in Athens who discovered that all but one of his staff was taking bribes. So low were his expectations that he did not ask himself how to clean up the corruption. All he wanted to know was why his staff had let one lone wolf get away with being honest.

The corruption and political patronage that infest Greece's public sector are sometimes attributed to the experience of centuries of Ottoman overlordship, a time when people needed highly placed patrons to protect them against arbitrary power. After Greece achieved independence, the under-developed economy meant that the public sector usually provided the most secure jobs. Government evolved into a beehive of clientelism.

Greece's pre-industrial history throws light on its modern troubles, but the patronage cancer metastasized after the elder Papandreou led his Pasok socialist party to election victory in 1981. The bloated state sector is to a considerable extent a legacy of his era, and the difficulties his son faces in downsizing it reflect the hostility of entrenched interests in the party, its public sector trade union allies and the bureaucracy at large.

These elements comprise what is known in Greece as "deep Pasok," a dense network of traditionalist forces which for the past year has sabotaged the reforms on which Greece's future in the euro zone - and perhaps the future of the euro zone itself - depends. Some Greek political sources say that a cabinet reshuffle announced on June 17 strengthened the influence of deep Pasok over the government, just when the EU and IMF are desperate for Greece to reinvigorate its fading reform effort.

If the outcome is a debt default, the consequences are likely to include not just economic anarchy but an outburst of national outrage at the political establishment for having betrayed Greece's modern European identity. For centuries Greeks did not feel truly part of Europe, in spite of all the praise that well-meaning foreigners heaped on them as the supposed descendants of the creators of European civilization.

It was only after entry to the EEC, and later the euro zone, that younger, more affluent, better-travelled Greeks grew up comfortable with the thought that they were as European as the Germans or Dutch. This self-confidence is one of Greece's most precious achievements since democracy replaced the military junta of 1967-74. It may soon have to survive its hardest test.

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