Social policy and the welfare state constitute the greatest social and political achievements of Metapolitefushi and this democracy. After 1974, every government strengthened national social policies, some to a greater extent and others to a lesser extent. As you know, the basis of social policy is the redistribution of wealth, the invisible opportunities for improvement (social status, career prospects, upward mobility, institutional rights, etc.) with the aim of improving living standards. (e.g. citizen participation). Supporting the most vulnerable by reducing poverty and inequality.
From 1974 to the mid-1990s, and especially from 1982 to 1987, measures were implemented to address major social problems and balance widespread economic and social inequalities. This was followed by a gradual increase in the share of social spending in gross domestic product. This rose from about 21% in 1997 to 27.5% in the European Union, until the gap with the EU narrowed (24% to 28% in 2003 and 27% to 30% in 2021). Nevertheless, Greek social policy suffered from a number of significant inherent weaknesses that are not reflected in the figures above.
The first weakness has to do with the fact that the redistributive effects of social policy are counteracted by policies that reverse the process. Explicitly or implicitly, governments not only benefit the middle and upper classes by condoning encroachment on public land and unauthorized construction, such as by granting building rights in privileged areas (beaches and protected areas). , poured their income and wealth into vulnerable people. , and introducing regulations that force the public to purchase services, either by purchasing services from specific professions (civil engineers, lawyers, accountants, etc.) or by hiring redundant staff in the public sector. Masu. These characteristics also explain the major contradictions in the country’s social policy. Greece has a satisfactory level of social spending, but it also ranks among the highest in the region for income inequality. It also ranks third after Romania and Bulgaria in terms of the risk of poverty and social exclusion.
A second weakness relates to how social policies are financed, which determines whether income redistribution and inequality reduction goals are achieved. In the years leading up to Greece’s accession to the European Economic Community, there was a redistribution of income, primarily from the middle class downwards. The share of pensions in social spending also increased significantly, but everyone benefited, including low-, middle-, and high-income earners. From the late 1990s until the onset of the economic crisis, social policy relied primarily on the distribution of credit resources, which satisfied recipients of social spending but did not result in serious redistribution within society. .
Renting made everything possible. It blunted the sharp edges of inequality and injustice, encouraged investment, helped tackle things like unemployment and the external deficit, and postponed repayments into the future.
A third weakness is a culture that elevates every question to a social and political issue, and this comes at great social and political cost. Rescues of troubled companies cost $1.5 billion at the time, and bailouts of Olympic Air, the Larco mine, ailing shipyards, and a handful of defense industries that supported military industries instead of military industries also cost society. It became a problem. The materials ended up making commuter buses and trolleybuses. All big issues clearly have social and political (not clientele) implications, but the costs are high when moderation is lost and begins to affect social protection, growth and policy.
The fourth point relates to the 2009 crisis, the biggest economic collapse experienced by Greece during the Metapolitefushi era. The share of social spending in GDP did not decline during the crisis, but rather increased. However, GDP contracted by 27%, unemployment soared, many businesses went bankrupt, and social tensions rose. What happened during the crisis was more generally the result of a failure to effectively and realistically manage socio-economic relations in a way that prevented the crisis. Break out. The political and institutional structure survived, even though economic policy and the economy proved to be the weakest link in the chain. The economy also survived. But at what cost? The price has been an unprecedented downturn in institutional, political and social structures, relationships and balances, and a frightening destruction of social cohesion.
What does this mean? There are many answers. From 1974 to the present, politics has been unable and unwilling to pursue classical redistributive policies. To alleviate social pressures, it used the inherently difficult tools of budget deficits, monetary expansion (prior to monetary union with the EU), and external borrowing. Renting made everything possible. It softened the sharp edges of inequality and injustice, boosted investment, helped tackle things like unemployment and the external deficit, and postponed repayments into the future. The big question is therefore why this is not enough to effectively deal with important issues such as the social security system, the health and education sectors, population aging, tax evasion, the shadow economy, corruption in agriculture and the distribution of other EU subsidies. The question is, are you going to deny it? , an inefficient judicial system and state services? Why did the government allow itself to be swayed by short-term electoral concerns at the expense of the nation’s productive base? Why was politics unable to move beyond domestic power struggles? Indeed, Metapolitefushi may have been associated with the creation of the welfare state, one of the most glorious achievements in Greece’s recent history, but it was also one of the most painful economic collapses in Greece after World War II. It is also characteristic that there was one. The gulf between the hope and positive energy of 1974 and the events and aftermath of 2009 cannot be overlooked. This difficult chapter of metapolite fushi has had an impact not only on social protection, but also on politics, institutions, the economy as a whole and many other areas. And what matters now is how it will affect future development.
Tassos Giannitsis is Professor Emeritus at the University of Athens and former Minister of Social Security.