ABSTRACT
Most researchers in the field would argue that the welfare system of Greece is less developed than the north-west EU countries. Many of its characteristics are rooted in choices made in the social, economic and political field after the Second World War. Welfare policies were connected to economic growth and served certain macroeconomic objectives (Gravaris 2006). The interwar period was also crucial, because the process of industrialization and capital accumulation affected the class structure and the emerging social conflicts (see Petmesidou 2006, 26-29). In the early 1920s the ‘Asia Minor disaster’ necessitated state intervention in the resettlement and employment of 1.3 million refugees, and in public health (Petmesidou 2006). Later, during the great recession, demands were raised for intervention in jobs and social insurance. Existing social insurance funds covered only a small part of the working population. In 1937 the Social Insurance Organization (IKA) was established for workers in the private sector. Even then, only a small part of the population (33 per cent) was insured (Petmesidou 2006, also Katrougalos 1996). The Second World War and then the Civil War left Greece with a destroyed econ-
omy. However, during the first post-war decades, the average annual rate of growth of gross domestic product (GDP) became the highest in the world and the average annual increase in labour productivity one of the highest in Europe. One would assume that the living standards of the population improved; instead, inequality increased due to government policies for strengthening capital accumulation (Karageorgas and Pakos 1986). In 1950 the vast majority (60 per cent) of the labour force were employed in the low productivity agricultural sector (28.5 per cent of GDP), while the relevant figure for the industrial sector was only 20.2 per cent (see Vaitsos and Giannitsis 1987, 17). During the 1950s, emphasis was placed in reconstructing the economy and in devel-
oping the necessary infrastructure for further development. The average annual growth of GDP and per capita GDP were 5.7 per cent and 4.7 per cent respectively (Vaitsos and Giannitsis 1987, p. 17). Although governments were conservative, state intervention was growing, aiming to attract foreign capital and investments, and to increase the capital accumulation and industrialization (see Ioannidis and Mavroudeas 1999, Karageorgas and
financial system. (Petmesidou, 2006, p. 30) where the liberal ideology was promoted in the private sector but significant factors and sectors of the economy were controlled by the state. During the period 1960-73 the Greek economy showed even more rapid rates of growth.
The economy’s restructuring was completed and the country’s position in the world economy was upgraded (see Ioannidis and Mauroudeas 1999). The average annual growth of GDP and per capita GDP were 7.7 per cent and 7.1 per cent respectively, figures that are much higher than those found in other European and OECD countries, with the exception of Japan (OECD 1997a, p. 50). The country saw high rates on the average annual growth of investments, of industrial productivity and of the exports of goods and services (OECD 1997a, p. 61, Georgakopoulos 1995, p. 117). Evidently, the restructuring of the Greek economy was achieved in favour of the industrial sector. By the end of this period, the share of the agricultural sector in GDP decreased to 15.6 per cent, while the relevant figure for the industrial sector increased to 34.7 per cent (see Lianos and Lazaris 1995, p. 73). The share of services in GDP remained more or less constant (at around 50 per cent). On the other hand, unemployment rates remained well above the relevant average figures for EU and OECD countries (see Thomadakis 1997). This, and the surplus labour in the agricultural sector, contributed to massive emigration and a high urbanization In the political arena, conservative governments dominated, a result of the Left’s defeat
in the Civil War following the Second World War. Even with parliamentary democracy, civil liberties were most seriously restricted. The aid sent in the 1950s by the USA through the Marshal Plan increased the economic and political dependency. That period was also marked by two events: (i) the agreement of 1961, which opened the way for joining the European Community, and (ii) the military coup, which established dictatorship (1967-74). The development of the welfare state during the period 1950-73 did not follow the
trend of the other domestic macroeconomic indicators, as happened in most European countries (see Petmesidou 1991, 2006; Maloutas and Papatheodorou 2004). During that period
