Spiegel: Who’s Responsible for the Greek crisis?

The online Spiegel publication support that the financial downturn is affecting mostly the middle class in Greece. This publication is connected to research made by Fragiska Megaloudi and Stelios Papardelas who are referring to problems that the economic crisis created in people’s daily life.

According to this research, the economic recession is in its sixth year and the crisis mainly affects Greek middle class. Since 2009, income has been reduced by 30 percent. From 2009 to 2011 the number of unemployed has been increased by 200,000 touching 2.3 million, in a population of ten million. A big majority are jobless.

The research underlines that if someone in Greece wants to understand the causes of the current crisis they should remember 1970’s. The end of the seven-year dictatorship in July 1974 is listed as the most important date in Modern Greek history. Since then, new political elites were created and had a stable electoral base. Meanwhile, clientelism and populism were inevitable.

Professor Efstratios Tsotsoros who teaches economic development and social reform at the political department of Panteion University declared “Concurrently existing since the seventies and eighties, were many problems like inflation, oil crises, and deindustrialization. The economic elite of the country created a problematic system.” He added “they acted in this way at the expense of competitiveness to ensure just their personal benefit.

All this happened long before entering in Eurozone. When introduced in single currency, public and private debt skyrocketed. Borrowing in the nineties grew by an average of 4% of GDP which is now reaching 10%. The euro has brought the illusion of prosperity, but high growth rates were in the ineffective policies pursued by politicians during the seventies.

However, growth in Greece was considered as positive. “The economic situation in Greece seems to be better” wrote Times newspaper in 2007.

Economists and analysts were optimistic that Greece will maintain its high growth rates. The crisis began near the end of the decade, when criticism began for the supposedly luxurious lifestyle of Greeks.