A challenging meeting on two centuries of Greek economic history – and much more

by Antonis D. Papagiannidis

A challenging three-day meeting was organized – at the seat of the first Greek Parliament («Βουλευτικόν») in Greece’s original capital city, picturesque but also heavy with memories Nauplion – by the Historical Archives of, jointly, Alpha Bank and the Bank of Greece.

The meeting was termed scientific, to cover “200 years of Greek economy, wavering between state and market”, as one of the multitude of events organized to celebrate the Bicentennial of Greek Independence. In fact, it proved far more than that: with little exaggeration, one could say that packed in a dozen of sessions one could experience much of the country’s successes and misadventures spanning successive waves of boom and bust – both economic and sociopolitical.

Were one to touch at some of the high points of this venture, one would start from the originality of opening the event with a Turkish contribution: Sevket Pamuk, of Bosporus University, presented two centuries of his own country’s economic course – which, he explained, followed quite similar a track compared to the one of Greece, usually lagging in GDP per capita but shadowing very much the same track: significantly better than (say) Egypt or Iran but lagging Italy or Spain, to stay in a somehow comparable setting.

This in not exactly the perception Greeks have of two centuries of close – albeit not problem-free – co-existence with their erstwhile sovereigns they broke free from in the years after 1821.

Much of the main body of the three-day meeting was devoted to successive approaches to Greek economic history. How did institutions, evolving social structures and geopolitical shifts influence the fate of the (initially fledgling) free Greek State? what of its public finances borrowing ventures and  (unpleasantly frequent) bouts of insolvency? how market-friendly or market-averse have been successive phases of Greek economic policy throughout two centuries of public life? which were the experiences of Greece with industry, especially so insofar attracting investment/FDI to the Greek economy was concerned? which was the comparative role of State intervention and of the budding private sector to that respect?

While such – and much more – aspects modern Greek of economic history were broached upon, there were a number of issues of more sociological interest that were also dealt with. How far does the Οttoman past of Greece, often enough invoked as a cause of the country’s own lagging behind the West (comparative to more resolutely modernised countries), explain development handicaps? Is there a special version of Orthodox morality that could serve as an explanation for economic choises, in a way reminiscent of the influence of Protestant ethics on the birth and maturation of capitalism? (Going back to the S. Pamuk paper, it would seem that also in the situation of Turkey, the impact of Islam is often involved and used by his country’s political class for their own benefit).

Also: how far does the shrinking demography of present-day Greece threaten to set the future in a negative context? which will the consequences be of a less-than-satisfactory participation of women in economic activities, given that the quest for gender equality has not borne fruit to the extent needed? Plus, to what respect dispensing political patronage – along with ensuring access to the public purse and/or public procurement and contracts – may cause apparent growth opportunities finally result in under-development?

In closing the event, co-host Vassilis Rapanos – chairman of the Board of Alpha Bank – dwelt on the lagging institutional capacity that still characterizes Greece in matters such as statistics, justice, tax administration, spending control. To successfully impose law and order, to collect taxes and to provide public goods remains something that the Greek State still lags in. The Adjustment Programmes strennuously  applied in the last decade in Greece at the instigation of the country’s creditors did little to amend this situation; calls for structural change should focus on such problem areas.

In a more technical vein, the Bank of Greece Governor Yannis Stournaras – equally co-host of the three-day Nauplion event – presented aspects of post-Covid monetary policy-making and banking supervision at a European level, with the future of European fiscal rules thrown in for good measure. All of which constitute a major challenge ahead for the Greek economy. He ended his presentation on a guardedly positive tone.