Greece

I - Political context

***General observations:

For the completion of large parts of this questionnaire (TFEU amendment, ESM, Fiscal Compact) only the parliamentary debates in the Parliament Plenum were used as a source. The debates in the special parliamentary committees are only available in video.

Political change     
I.1
What is the political context of the Eurozone crisis period in Greece? Have there been changes in government, elections, referenda or other major political events during the period of 2008-present?

Since 2008, Greece has experienced major social and political developments that are exceptional, if not unique, for a western state. Since the end of the colonels’ dictatorship (1967-1974), two parties have traditionally been at the center of the political scene: PA.SO.K. (Pan-Hellenic Socialist Movement, center-left, socialist) and N.D. (New Democracy, center-right). The last decade before the economic crisis, Greece has experienced a period of outstanding economic growth. However, the Greek economy and the State mechanism have always been characterized by important structural deficiencies, mainly caused by the establishment of a clientelist system, corruption, and the constant failure of reforms.[1]

After five years of Government by the center-right N.D., political and social crisis in Greece was already obvious from the violent riots of December 2008, following the murder of a young anarchist by the police in Athens.[2] The center-left socialist party PA.SO.K. won the early elections of October 2009 with the slogan “there is money”, promising that it would not proceed to any austerity measures, even though N.D. warned that such measures were indispensible.[3] However, almost immediately after the elections, Eurostat revealed the real data on the Greek deficit, together with the statistics juggling committed by the N.D. Government.[4] Thus, the Government of PA.SO.K. was taken by surprise and finally decided to proceed to austerity measures in March 2010 (see section X). However, in the autumn of 2009, the credit rate of the Greek State was devaluated by the rating agencies. In April 2010, the Greek Government officially asked for financial assistance by the IMF and the EU. A loan agreement of 110bn. was concluded, accompanied by the so-called Memorandum of Understanding, which stipulated measures of unprecedented austerity as a condition for the financial assistance to Greece.[5] Violent protests and general strikes followed.[6] This important shift in the government program was considered approved by the Greek people via the local elections in November 2010, won by PA.SO.K.[7] According to the loan agreement, each disbursement of the loan to Greece would take place by a unanimous Eurogroup decision, depending on the evaluations of the reforms to which the Greek Government has proceeded by the so-called “troika”, composed by a representative of the ECB, the IMF and the European Commission. This new technocrat institution has thus acquired extraordinary powers, and Giannis Drosos, Professor of Constitutional Law, has talked about a new way of functioning of the Constitution.[8]

The reforms agreed between the Government and the “troika” proved to be difficult to implement in practice. The following months many general strikes were called, local crises and conflicts between citizens and the police took place, protests became more and more violent and incidents like political suicides repeatedly shocked the public opinion. In June 2011, after having obtained the vote of confidence by Parliament, the Government, while an enormous and violent protest was unfolding in the center of Athens, voted a new austerity package contained in the Medium term budgetary framework for the period 2012-2015.[9] In July a new bailout of 109 bn. for Greece was agreed.[10] Meanwhile, an important social movement that had started through the internet, following the example of mobilizations in Spain, was getting more and more important.[11] In October 2011, a “haircut” of 50% of the Greek debt was agreed between the Greek Government, the European leaders, the IMF and banks, with the voluntary participation of the private sector (PSI).[12] The Prime Minister announced a referendum because new austerity measures were demanded as a condition for the loaning agreement. This decision had been immediately translated by the press as posing to the Greek people the dilemma between Euro and drachma.[13] However, under pressure of European leaders and the criticism by a large part of the political world in Greece, Giorgos Papandreou retired the referendum proposal on the 3rd of November.[14] Some days later, he resigned in order for the President of the Republic to form a coalition government.[15]

Indeed, on the 11th of November a new Government was formed with the support of PA.SO.K., N.D., and the far right populist LA.O.S. (Popular Orthodox Rally). Loukas Papademos, a technocrat recognized by the European partners for his service as a vice-president of the ECB, was appointed Prime Minister. [16] The main task of the new Government was to make sure that Greece would fulfill its obligations vis-à-vis its European partners and then to lead the country to elections. In February 2012, and while another violent protest with a very high participation was unfolding outside the Greek Parliament, another austerity package was voted, in order to satisfy the conditions set by the Memorandum of Understanding for the second bail-out agreement. Many deputies of the Government coalition refused to vote further austerity measures and were suppressed from the parliamentary groups of their parties, thus weakening importantly the parliamentary majority supporting the Government.[17] Restructuring of the Greek debt was concluded in April 2012 and elections were announced for the 6th of May.

The elections of the 6th of May marked a new era in Greek political life. For the first time, a total of seven parties were elected in Parliament, of which three for the first time (AN.EL. – Independent Greeks, a right wing patriotic party, DIM.AR. – Democratic Left, a left party formed by deputies who had seceded from SY.RIZ.A. and which held a more moderate position than the latter, and Chrysi Avgi – Golden Dawn, the ultra-nationalist party. The rest of the parties in Parliament were N.D., SY.RIZ.A., PA.SO.K., and the Communist Party, K.K.E.). The two traditional big parties, N.D. and PA.SO.K., obtained a very low percentage (32,03% in total combined, instead of 77,39% in the elections of 2009), whereas the third party of the Papademos Government coalition, LA.O.S., did not obtain seats in Parliament. On the other hand, the parties opposed to the governmental austerity policies obtained an important increase of their percentage. It is remarkable that SY.RIZ.A., a left party composed by components ranged from center left to extreme left, quadrupled its 2009 percentage by obtaining the 16,78% of the votes. Chrysi Avgi obtained a 6,68% of the votes, whereas, in the previous elections it had obtained only a percentage that did not exceed the 0,25%.[18]

The results of the elections were interpreted as showing the anger of the Greek people against corruption and the policies of austerity pursued by previous Governments. The social dimension of the crisis was a key factor. Indeed, the political world was literally divided between the Memorandum and the anti-Memorandum forces and so was society.[19] After the shocking results of the May elections, PA.SO.K. and N.D. also integrated in their political programs the renegotiation of the terms of the Memorandum and the adoption of social policy measures.[20]

The great dispersion of votes in the 2012 elections made it impossible to form a government that would enjoy social legitimacy, as SY.RIZ.A. refused to participate in a government that would not renounce the commitment of the country to the Memoranda. The leaders of the two big parties had provided personal letters to the Eurozone partners, where they expressed their personal commitment to the obligations of the Greek state contained in the bailout agreements.[21] Therefore, in the lack of agreement between the two first parties, an interim Government under the Prime Minister Panagiotis Pikrammenos, former president of the Council of State, led the country to new elections on the 17th of June. During the pre-election period, European leaders and the media constantly stressed the danger of a “Grexit”. According to the President of the Republic, the German Chancellor Angela Merkel, in a personal conversation, went as far as to propose to him the holding of a referendum about the remaining of the country in the Euro.[22] In the June elections, a polarization of the electoral body was observed and N.D. and SY.RIZ.A. obtained higher percentages (29,66% and 26,89% respectively).[23] Hence, a coalition government was formed with the participation of the three pro-European parties, N.D., PA.SO.K., and DIM.AR, under the chief of the N.D. party, Antonis Samaras. The mandate of the Greek people was interpreted as imposing the remaining of the country in the Eurozone, thus enhancing the necessary structural reforms, while renegotiating the harsh austerity conditions set by the European partners.[24]

From June 2012 until the summer of 2013, the political situation in Greece seemed relatively appeased. Of course, general strikes, protests, and local conflicts between citizens and the police did not cease to exist. Moreover, racist attacks against immigrants became more and more recurrent. Nevertheless, the Greek people seemed to be used to the functioning of the Government, a delicate combination of decisions between the Government coalition and the “troika”. However, a general degradation of the rule of law has been observed and the executive is systematically infringing constitutional rights, such as the freedom of expression.[25] Furthermore, the excessive use of “administrative acts of legislative content”[26] and other emergency legislation procedures have caused a degeneration of the functioning of the Parliament which is unprecedented since the fall of the military junta in 1974. On the 12th of June 2013, the closure of the public radio and television by the Government authorized with such an act, and despite the disagreement of the Government parties, caused the reaction of the press and the political world in Greece and abroad.[27] On the 21st of June 2013, DIM.AR. (Democratic Left, the left party) announced that it does not any more support the Government coalition, which is now only supported by N.D. and PA.SO.K.. The public television issue was the main cause of disagreement between left and the government.[28]

It is important to note that Greece in 2013 was passing its sixth consecutive year of economic recession. Greek employees have suffered a harsh reduction of their income,[29] while unemployment has reached 27,4% of the population[30] (while it was at 8,3% in 2007)[31] and 62,5% for under 25 years old.[32] According to the statistics of NGOs, Greece was the country in Europe with the highest percentage of increase in suicides.[33]

The socio-economic situation did not change much in the following years, despite the fact that the statistics of the Greek economy slightly ameliorated. In May 2014 the local, regional and European elections took place and were perceived as a victory for SY.RIZ.A., but also for extreme right parties like Chrysi Avgi. This result was confirmed in the elections of January 2015 that took place after an unsuccessful voting for the President of the Republic. SY.RIZ.A. collected 36.3% of the votes, against 27.8% for N.D. Chrysi Avgi was the third party, with 6.3% of the votes. After its victory, SY.RIZ.A. formed a government coalition with the patriot and populist party AN.EL. Shortly after its nomination, the SY.RIZ.A.-AN.EL. Government announced that it will not apply the Economic Adjustment Programme agreed by the previous Government and that it does not recognize the “troika” as an institutional interlocutor. Since, the Government is negotiating with the country’s creditors (the “institutions”) for a new agreement on the Greek debt and a “Grexit” seems possible.

[1] Xenophon Contiades and Ioannis Tassopoulos, “ The Impact of the Financial Crisis on the Greek Constitution”, in Xenophon Contiades (ed.), Constitutions in the Global Financial Crisis (Ashgate 2013),  chapter 7, 195.

[2] Vaios Papanagnou, “December 2008: the hate”, To Vima, 6 December 2011, http://www.tovima.gr/vimagazino/views/article/?aid=433521.

[3] Giannis Pretenteris, “There is money!” [in Greek], To Vima, 27 May 2012, http://www.tovima.gr/opinions/article/?aid=459615.

[4] See Xenophon Contiades and Ioannis Tassopoulos, op. cit., 195. N.D. had estimated the deficit of 2009 to be at 5.4% GDP, whereas Eurostat at 15.4% GDP! However, the chairman of the Greek Statistics’ Authority, the authority that provided the relevant data to Eurostat, is suspected by the Greek justice for artificially inflating the deficit numbers. Cf. Evangelos Vallianatos, “The Greek Lesson”, The Huffington Post, 12 December 2012, http://www.huffingtonpost.com/evaggelos-vallianatos/the-greek-lesson_b_2279413.html.

[5] See the questions in the section “Member States receiving financial assistance”.

[6] During one protest three employees of a private bank who could not participate in the general strike died because of a fire in the building where they were working. The fire was put during the protests. This incident shocked the public opinion. Cf. http://tvxs.gr/news/%CE%B5%CE%BB%CE%BB%CE%AC%CE%B4%CE%B1/%CF%84%CF%81%CE%B5%CE%B9%CF%82-%CE%BD%CE%B5%CE%BA%CF%81%CE%BF%CE%AF-%CE%B1%CF%80%CF%8C-%CE%B1%CF%83%CF%86%CF%85%CE%BE%CE%AF%CE%B1-%CF%83%CE%B5-%CF%84%CF%81%CE%AC%CF%80%CE%B5%CE%B6%CE%B1-%CF%83%CF%84%CE%BF-%CF%83%CF%8D%CE%BD%CF%84%CE%B1%CE%B3%CE%BC%CE%B1

[7] See the interview of the Prime Minister Giorgos Papandreou to the journal To Vima on the 14th of April 2010, http://archive.pasok.gr/portal/resource/contentObject/id/c6d1bb17-ee7b-4a54-a152-2b46216c249f. In this interview, the Prime Minister conferred clear political character to the local elections.

[8] Giannis Drosos, «ΤοΜνημόνιοως σημείο στροφής του πολιτεύματος [The ‘Memorandum’ as a turning point of the regime]», www.constitutionalism.gr, published in The Book’s Journal, Vol. 6, April 2011, 42.

[9] “Greece austerity vote and demonstrations”, The Guardian, 29 June 2011, http://www.guardian.co.uk/world/blog/2011/jun/29/greece-austerity-vote-demonstrations.

[10] “EU leaders agree €109bn Greek bail-out”, The Financial Times, 21 July 2011, http://www.ft.com/cms/s/0/952e0326-b3af-11e0-855b-00144feabdc0.html#axzz2Wbu1s9TY. The bail-out was extended to 130 bn. with the Eurogroup decision of the 21st of February 2012.

[11] The Greek Indignant was a movement without a specific political identity, protesting against austerity and corruption. In this movement people from all the spectrum of the political world participated and thus was accused of increasing the influence of populist parties, and especially the Golden Dawn. See the article Antonis Liakos, “’Indignants’ and Golden Dawn”, I Avgi, 16 September 2012, http://archive.avgi.gr/ArticleActionshow.action?articleID=713898.

[12] See section “Member States receiving financial assistance”.

[13] “Papandréou nous impose de choisir entre lui et la drachme”, Le Monde, 3 November 2012, http://www.lemonde.fr/crise-financiere/article/2011/11/03/un-referendum-pour-choisir-entre-papandreou-et-le-drachme_1597547_1581613.html.

[14] “Referendum: “Yes” or “No” to the new loan agreement”, Ta Nea, 31 October 2011,  http://www.tovima.gr/politics/article/?aid=427794. For the reactions of European leaders and especially Merkel and Sarkozy, cf. http://www.tovima.gr/finance/article/?aid=427899. The referendum was considered by the pro-European parties and certain members of PA.SO.K. as an indication of untrustworthiness of the Government towards the European partners. The left winged parties and other important personalities, on the other side, criticized the choice of the referendum because it would be presented as raising the dilemma of the remaining of the country inside Europe or no, a dilemma which, according to them, was artificial. For the reactions of the Greek political world to the referendum proposal cf. http://www.cosmo.gr/Epikairotita/Ellada/Politiki/epithesh-twn-kommatwn-sthn-apofash-toy-papandreoy-gia-dhmopshfisma.1433995.html.

[15] “Eurozone crisis: Greek PM George Papandreou to resign”, The Guardian, 6 November 2011, http://www.guardian.co.uk/world/2011/nov/06/greece-george-papandreou.

[16] Reuters, PROFILE-Greek Prime Minister Lucas Papademos, 23rd November 2011, www.reuters.com/.

[17] http://www.guardian.co.uk/business/2012/feb/13/eurozone-crisis-greece-austerity-package-vote.

[18]             For the results of the elections of May 2012, cf. the site of the Minister of Internal Affairs, http://ekloges.ypes.gr/v2012b/public/index.html#{%22cls%22:%22main%22,%22params%22:{}}. 

[19] Cf. also Xenophon Contiades and Ioannis Tassopoulos, op. cit., 212. The authors say that the pro and anti Memoranda cleavage has substituted the traditional division between Left and Right.

[20]            For the program of N.D., cf. “The 18 propositions of N.D. for the economy”, Ta Nea, 31 May 2012, http://www.tanea.gr/news/greece/article/4726301/?iid=2. For the program of PASOK, cf. http://www.pasok.gr/portal/theseis_index.jsf. It is indicative that Antonis Samaras, for example, has promised the restitution of the lowest pensions and of some allowances to the levels of 2009, the institution of an urgent unemployment allowance, the abstention from the further reduction of salaries in the private sector, the reduction of the taxes and other measures that would improve the economic situation of the middle and the lower class households.

[21] For the exigency of the personal commitment of the Greek political leaders, cf. “Ultimatum Juncker for the 6th tranche”, To Vima, 22 November 2011, http://www.tovima.gr/politics/article/?aid=431375.

[22] “The Presidency insists on the Merkel proposition for a referendum on the remaining in the Euro”, To Vima, 18 May 2012, http://www.tovima.gr/afieromata/elections2012/article/?aid=458414. This fact was denied by the German Chancellor but the Greek President of the Republic insisted on its truth.

[23] See the official site of the Minister of Internal Affairs http://ekloges.ypes.gr/v2012b/public/index.html#{%22cls%22:%22main%22,%22params%22:{}}.

[24] “Greece parties agree coalition government”, BBC News, 20 June 2012, http://www.bbc.co.uk/news/world-europe-18515185.

[25] See for example the press release of the Amnesty International on the 20th of June 2013, concerning the prosecution of the conscientious objectors in Greece, available at http://www.amnesty.org.gr/co-exioglou. See also the article on Reuters considering the arrest of a Greek journalist after having published the “Lagarde list”, “Greek editor stands trial over Swiss accounts list”, Reuters, 29 October 2012, http://www.reuters.com/article/2012/10/29/us-greece-corruption-list-idUSBRE89S0EP20121029. Finally, see the public statement of Amnesty International on the 22nd of March 2013, concerning the excessive use of police force against the protestants who object to the gold mining operations in the North of Greece, http://www.amnesty.org/en/library/asset/EUR25/004/2013/en/c81397ca-0895-4f7a-92b5-82370134de8f/eur250042013en.html. Some of these protestants are now considered by the police to have formed a “criminal organization” and thus their phone calls and their phone conversations with various journalists have been recorded. See http://tvxs.gr/news/ellada/mazikes-parakoloythiseis-dimosiografon-logo-xalkidikis.

[26] On this legal instrument and its normally exceptional character cf. question III.1.

[27] “Greek coalition in disarray after state broadcaster’s closure”, The Guardian, 12 June 2013, http://www.guardian.co.uk/world/2013/jun/12/greek-coalition-disarray-broadcaster-closure. Despite the decision of the Council of State, declaring the interruption of public radio and television illegal, ERT remains closed.

[28] Cf. http://www.reuters.com/article/2013/06/21/us-greece-idUSBRE95K0IJ20130621 , http://www.lemonde.fr/europe/article/2013/06/25/nouveau-gouvernement-de-coalition-en-grece-pour-garantir-la-stabilite_3436423_3214.html.

[29] See Eurostat,

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Living_standards_statistics.

[30] Source: Greek Statistics Authority, http://www.statistics.gr/portal/page/portal/ESYE.

[31] Source: Eurostat,

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Unemployment_rate,_2000-2011_(%25).png&filetimestamp=20120502100338.

[32] “Eurostat: 62,5% youth unemployment in Greece”, To Vima, 31 May 2013.

[33] To Vima, 8 December 2011, http://www.tovima.gr/society/article/?aid=433980. The research concerns the first five months of 2011 in relation to the first five months of 2010.