ABSTRACT
This chapter explores the implications for the cohesion of the party in government and the terms of interparty competition. The Mitsotakis government was Greece's first encounter with an agenda of privatization and market liberalization. Its ambitious reform program came as a shock to many segments of Greek society, whose interests had been settled under the old model of political economy, and triggered a general rebellion by trade unions, the opposition and within-party factions. Structural reforms, privatizations and fiscal constraint marked a departure from the clientelist equilibrium, which moved New Democracy to a politically suboptimal position, triggering the dynamic reaction of organized groups in the public sector and the main opposition party. For PASOK, the privatization of the major public-sector enterprises, if it had succeeded, could have reduced PASOKs main turf for clientelism. Understandably, the privatization program became the prime target of PASOKs fierce campaign against the government.
