Structure, Agents and Discourse in Managing Economic Crises: The Case of Greece, 2009-2017/Ekonomik Kriz Yonetiminde Yapi, Yapan ve Soylem: Yunanistan Ornegi, 2009-2017.

• Author: Tsarouhas, Dimitris
• Position: Report

Introduction

The drawing of the curtain regarding the Greek crisis occurred in the spring of 2010. The freshly elected government requested international financial assistance in a context characterized by market panic and political helplessness. In exchange, it agreed to a programme of budgetary consolidation jointly designed and executed by the Troika of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). The two sides signed a Memorandum of Understanding (MoU) aiming at a return to market borrowing by 2012 and a transformation of the country's regulatory environment. Seven years down the line and after two more agreements, the goals set out in that MoU have not been realized, the economy has plunged into the deepest recession the country saw in its post-war history and prospects of a sustainable recovery remain uncertain.

This article does not deal with the actual content of reforms as designed by the Troika and implemented by a series of Greek governments since, (1) but deals with the handling of the crisis by policy-makers. Concretely, it focuses on the discursive frames used by policy entrepreneurs in Greece as they attempted to deal with the crisis and analyses the role played by discourse in handling the crisis' consequences and repercussions. I adopt a historical institutional framework (2) and draw from the "critical junctures" literature, focusing on the role of policy actors. I argue that policy outcomes can be largely attributed to a path-dependent logic enshrined in the country's political economy structures and in line with the policy path it has followed since the 1980s. Moreover, the reaction of policy entrepreneurs to the crisis was reinforced by their discursive logic of action, itself embedded in the state's institutional matrix. Procrastination, a refusal to face an uncomfortable, ruthless reality and politics as usual colours the response of Greek actors to the country's biggest crisis since at least 1974. Action taken by the first crisis government (2009-11) was particularly important in this respect.

In what follows, I begin with an overview of path dependence, critical junctures and discursive institutionalism to locate the article in the ongoing debate regarding institutions, ideas, rationality and discourse in accounting for stability and/or change. The following two sections discuss structure and agency respectively, focusing in the period after 1981 regarding Greece's political economy and the role of successive governments since the outbreak of the crisis, including reactions by key political actors and their discursive attempts to engage in either blame-shifting or an outright denial of the crisis. The conclusion summarizes the article's main findings.

Path Dependence, Critical Junctures and Discursive Institutionalism

Following the rediscovery of institutions as central to explaining policy outcomes, path dependence (PD) has acquired a prominent place in the relevant literature. The concept is employed by political scientists, sociologists and economists, (3) but its treatment differs depending on the context it is used. While for some it is synonymous to a "dynamic pattern of continuity that evolves as a result of its own past" (4) for others it suggests that "what happened at an earlier point in time will affect the possible outcomes ... occurring at a later point in time". (5) Whatever the precise terminology, PD is closely related to the logic of "increasing returns", (6) that is, positive feedback processes that reinforce actors' tendency to stick with existing settlements so as not to jeopardise realized gains. (7)

A path-dependent logic exists among rationalist and constructivist institutionalist approaches as well. In rational choice thinking, institutions reflect compromises between utilitarian, rational and strategic actors who see in them the possibility of benefit maximisation through the resolution of collective dilemmas. (8) Increasing returns are pertinent here, since agents act on the basis of the logic of consequentiality that increases the costs associated with every step taken down a particular path. (9) When it comes to sociological institutionalism, homo economicus is replaced by a more social being who is mostly concerned with the reputational effects of her actions and who is loyal to the logic of appropriateness. (10) Choosing to continue down a trodden political path results from the conscious choices of actors regarding what is appropriate and legitimate. This choice is the result of actors' subjective beliefs, norms and values about the appropriate framework of action. (11)

Path dependence is often associated with a historical institutionalist approach. Institutions are here meant to reflect past historical processes and the legacy they carry, both of which are key in shaping individual as well as collective interests. (12) When it comes to path dependence, historical institutionalism underlines 'critical junctures', major crises and shocks that are/can be turning points in political life and which shape the parameters within which subsequent political action occurs. Critical junctures can be turning points also in the sense of upsetting the current equilibrium and leading to radical change, as they offer the possibility of 'thinking outside the box' and radically altering the existing institutional configuration. Which of the two options, or any other in between them, becomes real is subject to empirical research. (13) It is in that context that the following sections will compare Greece's policy trajectory taking into account not only the crisis but also the structural environment within which this occurred.

The latest addition to the new institutionalist literature, namely discursive institutionalism (DI), is very useful for the purposes of this study. It stresses the role of ideas in public policy-making, seeing discourse as "whatever policy actors say to one another and to the public more generally in their efforts to construct and legitimate their policy programs" (14) An interactive logic of communication is powerful, as actors generate and communicate and exchange ideas, (15) and discourse is divided to a communicative and coordinative part. The latter is about forming a common language on the part of policy groups to develop a common policy stance, whereas the communicative aspect relates to the "formulation, modification and elaboration of ideas to persuade the public. (16)

Below I suggest that the eruption of crisis in 2010 constitutes a critical juncture for Greece, reinforced by the institutional environment shaped over recent decades. Moreover, the discursive logic followed by policy entrepreneurs in the country, focusing on political elites in particular, is a key factor in accounting for the handling of the crisis. Concretely, both the communicative and coordinative aspects of discourse were problematic in the Greek case, making change difficult to introduce, reinforcing patterns of inertia and setting up barriers to meaningful reform. Crucially, and although the first crisis government (2009-11) is naturally at the heart of the analysis below, the underlying discursive logic of political action did not differ drastically in subsequent years under successive governments of various ideological persuasions.

The Role of Structure: Greece's Political Economy

Policy outcomes at critical junctures are not solely down to choices made at the time: they are underpinned by the institutional context in which they occur, and the path followed at earlier periods. That path itself is subject to contingent events and reflects the input offered by political agents.

Greece's democracy was restored in 1974, following a seven-year dictatorial regime, and started functioning properly for the first time ever since. Yet the consolidation of democracy was financed by way of expansionist economic policies, the nationalisation of economic enterprises and deficit-financed growth. This state-dependent economic...