Mark Mazower: Greece’s History is Defined by Foreign Meddling

[The writer teaches history at Columbia University.]

Sympathy for the Greeks is in short supply. But their European partners need to come up with a better response and this will require getting to grips with the deeper roots of Greece’s predicament. I do not refer to the widely touted claim that Greece is a serial defaulter; the research paper (by Harvard’s Kenneth Rogoff) that introduced the idea suggests that Greece’s record over the past 100 years is not exceptional. (Its only default in the 20th century came in 1931-32, a time when it was scarcely the only one to run into difficulties.)

The real constant in modern Greek history is the extraordinary degree of foreign interference in its domestic life. Greece’s first king (a Bavarian) was imposed upon it, and its first political parties were named simply for the three powers most involved in its affairs. The severity of the Nazi occupation – with tens of thousands dying of famine in a single winter, and hundreds of villages burned – was a wartime extreme. More routine but less well known is the extent to which first the British and then the Americans sought to control Greece’s government ministries, intelligence agencies, military and royal court through diplomats, missions and advisers. The touch of what Greeks call the “foreign finger” was felt right up to the dictatorship of 1967. One way of understanding the democratic consolidation that has taken place since that regime collapsed in 1974 is as an effort to restore autonomy to a country that had known little of it.

This process has worked better than anyone could have expected. For more than 20 years, a sort of two-party system has operated smoothly and the army has been marginalised as a political factor: alarmist talk during the past few weeks of a return of the tanks cannot be taken seriously. The irony, however, is that membership of the European Union has both helped and hindered. It raised the standard of living and smoothed the restoration of democracy. But the inflow of funds allowed Greeks to ignore structural economic problems. Foreign aid in itself was not the problem: in the late 1940s Greece got more Marshall Plan funds per capita than anyone else in Europe, its productivity soared, manufacturing expanded and growth was high. But in the early 1980s labour costs and foreign indebtedness started to rise sharply – between 1979-85, total indebtedness rose from 8 to 42 per cent of gross national product. The real debt problem for Greece is of comparatively recent vintage and connected to its integration into Europe.

The establishment of democracy after 1974 served to highlight the Achilles heel of the Greek state – its chronic lack of fiscal reach. As far back as independence in 1830, the public finances have relied upon high indirect taxation, elusive invisible earnings and recourse to loans. One might blame mountains for this or the experience of Ottoman rule. But with a few honourable exceptions, the politicians have continued deploying public sector employment as a surrogate welfare net and instrument of patronage. Lavish EU funds have enabled a stop-go debt cycle that has seen Greek governments flee cap in hand to Europe for emergency aid, enact draconian stabilisation measures in return and then loosen the reins when electoral pressures built up.

This time one hears the chickens coming home to roost...

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