Greek Politics and the current financial crisis.

1. Greek Politics and the current financial crisis. Manos Meletakos Lumsa University Department of Law 2013

3. Introduction • The current financial crisis in Greece has its roots in the political system of the last 30 years • It encouraged policies that promoted corruption in most fields of social life. • The public sector grew into an unsustainable level that contributed to the country’s debt and budget deficit.

4. Introduction (cont’d) • Consecutive Greek governments failed to promote infrastructures in the sectors of Tourism and Agriculture were Greece has a comparative advantage. • EU funding allocation was often miss-managed and funds absorbance was incomplete due to lack of sustainable and documented proposals. • The current reform program under the supervision of the Troika is lacking the correct politics composition mixture.

5. Introduction (cont’d) • It exposed the Greek population into great austerity measures that led to record levels of unemployment and great recession. • These measures, however, were unavoidable and will hopefully assist Greece to return into budgetary surpluses and GDP growth.

7. The Political deficit • Greece enjoyed economic growth and prosperity after joining the European Economic Community-EEC (at the time) in 1981. • Following the 2004 Olympic Games in Greece and up to the year of 2008 the country enjoyed an increase in the GDP(Gross Domestic Product) per capita rate that brought her to be the 30th wealthiest country in the world. • The recession that followed due to the International financial crisis exposed the systemic short-comings of the Greek economy and political system.

8. The Political deficit (cont’d) • Greece GDP per capita • Source: www.tradingeconomics.com

9. The Political deficit (cont’d) • The political shortcomings in Greece were defined as follows: • Few “political families” governing the country over the last 30 years. • Supporting the re-election of these political families resulted to an oversized public sector. • EU funding programs provided initially the grounds for “social policies” that led to an increase of the public debt and budget deficit.

10. The Political deficit (cont’d) • These political shortcomings together with uncontrolled public spending led to a total debt of 350 billion euros forcing the country to a rescue scheme run by the ECB (European Central Bank), the EU and the IMF (International Monetary Fund)

12. The Political system changes • Economic calamities often result to the re-establishment of the political system. • In Greece the socialist party (headed by the Papandreou family) reached record low levels during the 2012 elections. (33 seats) • Extremist parties (anti-troika policies) gained substantial ground ranging from the extreme left to the extreme (fascist) right.

13. The Political system change (cont’d) • The Greek Parliament after 2012 elections (see picture in the following slide) • Source: wiki/Greek Legislative election

14. New Democracy (ND) 129 • Syriza Unionist Social Front (SYRIZA) 71 • PanHellenic Socialist Movement (PASOK) 33 • Independent Greeks (ANEL) 20 • Communist Party of Greece (KKE) 12 • (Black Colour) Golden Dawn (XA) 18 • Democratic Left (DIMAR) 17

15. The Political system change (cont’d) • The new political parties composition in the parliament reflects the support of the Greek electoral in counter austerity measures and also demonstrates a protest vote. • Therefore, the political system has to balance between a pro-European statue to secure the position of Greece within the EU and the Eurozone and a counter European position supporting the exit of Greece from the Eurozone.

17. The electoral System of Greece • The parliament composition illustrated previously, is the result of an electoral system that contributes to the firstly elected party an extra 50 seats. • This is to facilitate the formation of a government which otherwise on a fully proportional scheme would have required the formation of coalition governments, a non familiar attitude to the Greek mentality.

18. The electoral System of Greece (cont’d) • Further, voters select the ballot paper of the political party of their choice, then tick the names of those candidates they support (between 1 and 4, depending on the size of the constituency). • Blank and spoilt ballot papers are not counted. • Parties must earn at least 3% of valid votes to enter parliament. For those who pass the 3% threshold, 250 of the 300 seats are allocated on a strictly proportional basis. The remaining 50 seats are allocated as a "bonus" to the party that obtains the highest number of votes nationwide.

19. The electoral System of Greece (cont’d) • A party or coalition needs 151 seats to secure a majority in parliament and be able to form a government which is the case of the current coalition government between New Democracy (Christian-Democrats), PASOK (Socialist) and Democratic Left (DIMAR).

21. Conclusion • Political parties reflect the society needs and often the prevailing economic conditions. • The current financial crisis brought about changes in the institutions of the EU that shaken the political foundations of many member states among which is Greece. • The EU political leadership must implement policies that will allow countries emerging from an economic crisis to meet healthy budgetary and fiscal boundaries.

22. Conclusion (cont’d) • It should not be the position or the attitude of European Union policies to punish or for this matter obliterate countries through austerity measures, leading its citizens to single road solutions that involve crime or worse...

24. Thank you very much! -  Mercibeaucoup! - Grazie mille! - Ευχαριστώ πολύ!