Panayiotis Ioakimidis: The Europeanisation of Greece

Panayiotis Ioakimidis is a Greek academic focusing on European policy and European integration. He is professor at the International and European Studies Department at the Faculty of Political Science and Public Administration of the University of Athens. He formerly worked for the Greek Foreign Ministry, served as an alternate member of the European Convention on behalf of the Greek Government, and was an adviser on European issues to Greek Prime Minister Costas Simitis.

In his study “The Europeanisation of Greece” Panayiotis Ioakimidis provides a concise case study of the transformative powers of the European Union. Looking at Greece, he finds that Europeanisation changed the Greek state thoroughly, but only as of the mid-1990s, more than a decade after membership.

Greece acceded to the EU in 1981, less than seven years after the country’s dictatorship had come to an end. Greek politics and the economy functioned very differently from other EU countries. The state was the major employer and had a key role in the economy, in particular through ownership of most banks. As Ioakimidis puts it, “the state occupied a hegemonic position in practically every aspect of Greek society.”

Employment in the public sector, already extraordinarily high (351,028 people) in 1981, nearly doubled (to 615,956) in 1992. The state was used by political leaders as an employment machine to keep their constituencies happy. An opaque network of provisions regulating the allocation of state subsidies, grants and aids of every form allowed the government to cater to its networks of patron-client relations and “dependencies”. With the banking system in the hands of the state, the distribution of loans followed purely political and clientelist purposes.

The price, of course, was rapidly growing public debt – rising from 17.6 percent of GDP in 1970 to 28.3 percent in 1981 and to 112 per cent in 1986.

The state was huge, but not effective, described as “a colossus with feet of clay” by D.A. Sotiropoulos. Everything was centred in Athens. Ioakimidis describes the country as the “most centralised unitary state in Europe in the early 1980s.”

Against this background, Europeanisation has deeply penetrated the Greek political system, delivering change in a wide range of areas. Ioakimidis lists four of the most important levels at which change took place: the regulatory, functional, territorial, and institutional.

First, EU membership had a major impact on the Greek economy, bringing about a stark contraction of the state as an economic actor and radically changing the regulatory patterns of the Greek economy. But this did not come overnight. Until 1985 Greece pursued a reckless policy of uncontrollable public deficits. Then Athens needed EU assistance. Brussels agreed to help, but imposed a stabilisation and reform programme. The programme, however, was abandoned again by the government in 1987, due to social pressures.

The real turning point came in 1992 with the adoption of the Maastricht Treaty, which set out the “convergence criteria” for a common currency. Faced with a high price for non-compliance, namely exclusion from the single currency, Greece embarked on a new reform programme. Through radical cuts in expenditure, particularly in state employment and state subsidies, the deficit fell from 12.5 percent in 1993 to 0.9 in 1999. This meant “a radical reduction in the size of the Greek state and a thorough redefinition of the state’s economic role” proved necessary. The process led to the complete liberalisation of the banking system, greater transparency in relations between the state and public companies and – through European single market regulations – a competitive regulatory regime.

Second, Europeanisation meant a redefinition of the functions and competencies of the state.

“Because of EU membership, the Greek state, while forced to abandon a host of economic functions and activities, was at the same time led by the EU’s impact and dynamics to assume new functions and develop policies that otherwise it might not have developed at all.”

The Greek state administration had to start dealing with new policies in a consistent way, in particular with regard to structural policies, the environment, vocational training, research and technology, consumer protection and cross border co-operation – areas where virtually no policies had existed.

Third, Europeanisation also had a lasting effect on Greece’s territorial organisation. “EU membership”, writes Ioakimidis, “has been the factor that contributed to altering fundamentally the territorial distribution of political power, political activities, choices and resources.” The EU’s structural policies “generated the dynamics and conditions for introducing a systematic policy of regional decentralisation and reinforcing the powers and autonomy of the regions.” The initial reforms began in 1986, when 13 administrative regions were formed, and were further extended in 1994 when elections at the prefecture level were held for the first time.

As Ioakimidis maintains, most if not all of the reforms pertaining to local governance

“were introduced as a response to the requirements and impact of EU membership. The 1986 reforms came about after Greece had discovered that it was not in a position to implement the IMPs [Integrated Mediterranean Programmes] because it lacked the decentralised regional structures required by the EU as partners in the execution of the structural policy.”

Greek regions gained new financial resources, a greater say in national policy making, direct communication with EU bodies, and links to counterparts in other member states.

Fourth, notes Ioakimidis, the Greek example shows that the “Europeanisation process and EU membership in general can play a decisive role in strengthening democratic institutions and widening the scope of the democratic process by bringing into it new social and political actors.”

The Bank of Greece, for example, tightly controlled by the government until 1995, gained almost full institutional independence and operational autonomy, largely due to the need to implement the convergence programme for euro entry. Handling the EU agenda required skills and knowledge, resulting in more transparent recruitment of civil servants. Due to EU pressure the state was also forced to start involving civil society in policy making, particularly with regard to the development of developmental and structural policies. “It is (..) evident that EU membership operates as a very effective force supporting the process of building a civil society in Greece (…) by weakening the omnipotence of the state.”

Ioakimidis concludes that “Europeanisation has been a powerful force for redefining the role, functions and powers of the state and for altering the balance of power between the state on the one hand, and society and the regions on the other.”

Ioakimidis’ text is a convincing illustration of the transformative power of the EU. Unlike the new member states which had to change before they could enter the Union, Greece was admitted to the EU as a largely unreformed country and thereafter had little incentive to reform. This changed when Greece feared to be left out of a new important club, the Eurozone. The benefits of membership as a credible incentive, combined with strict criteria, triggered the biggest reform drive in modern Greece.

  • Panayiotis Ioakimidis, “The Europeanization of Greece: An Overall Assessment”, in: Kevin Featherstone and George Kazamias (eds.), in Europeanization and the Southern Periphery, Frank Cass, 2001, pp. 73-94. For an electronic version of this article without footnotes click here.
26 February 2009