economic crisis

In the bleak years of the memorandum under the weight of the painful economic and social effects of bankruptcy and commitments to creditors, some “reminisced” about the years of the seven years and the supposed “economic miracle” of the regime.

This myth was cultivated not only by the imaginative colonels and their propaganda apparatus, but also by the later nostalgics of the junta and all sorts of “outraged”, without of course corresponding to reality. The paradox is that the scientific research did not delve into the study of the economic policy of the period 1967-1974 and the real “achievements of the National Government in the Economic Sector”.

Fifty years after the collapse of the dictatorship, its economic affairs were under the microscope of the conference organized by the Athens University of Economics and Business, under the auspices of the Hellenic Parliament, on the initiative of the Foundation’s professor and former minister Nikos Christodoulakis and the participation of a number of prestigious academics from the scientific fields of Economics, History, Political Sciences and International Relations.

Imbalances

What was the economic policy that was implemented in the seven-year period 1967-1974 and what type of macroeconomic imbalances did it cause in the Greek economy? How much was the income inequality really and what was the policy followed in the energy sector and what were the consequences? But how was the country’s participation in the international economic system affected by the dictatorship and what were the effects of the international isolation on the domestic economy? These were just some of the questions that preoccupied the distinguished professors who participated in the conference, the proceedings of which were opened by the President of the Parliament Kostas Tassoulas pointing out that “Indeed, there is a myth creeping around, that they may have done well financially, while this is not the case.”

According to him, the research gap regarding the issues of the junta economy is explained because the main weight fell on the issues of the violation of democratic rights and freedoms, the Cyprus tragedy, the role of the USA, etc., issues that monopolized historical research with as a result, the economic dimension of the dictatorship’s actions moved to the background.

The ambition of the University of Economics is to have a multi-year research project on the economic policy of the junta “which remain either controversial or obscure away from the spotlight and analysis”as Mr. Christodoulakis said.

Implications

Summarizing some, it emerges that the economic policy of the regime proved to be reckless, short-sighted and opportunistic, with serious macroeconomic consequences.

Too many of the investments that were made went awry or were jerky and wrong (from anarchic tourism development with unprecedented environmental and architectural impacts, to large investments favored by the dictatorship such as Onassis’ grandiose “plan O” that provided for the installation of a refinery in Pachi Megaron and investments of $600 million canceled in 1971, etc.).

The beginning of the end

The junta did not attempt to change the character of the economic policy of the previous decades. However, it led to excesses and distortions regarding the policy of influencing aggregate demand as well as the development and exchange rate policy, which, combined with international disturbances such as the collapse of the Bretton Woods system and the first oil crisis, highlighted the weaknesses of the post-war model for the development of the Greek economy and were the beginning of the end of the Greek economic “miracle”, as emphasized by the professor emeritus of the University of Economics George Alogoskoufispointing out that in order to maintain the tolerance of the population, the regime sought by all means to accelerate economic growth by increasing aggregate demand (Five-Year Plan 1968-1972).

Also, the low quality of the investment plans implemented in relation to the past and the most strongly decreasing returns on the accumulation of capital, the increase in inflation with the adverse consequences for the evolution of the average real wages of employees, the increase in the external deficit balance, etc., were indicators of critical imbalances in the Greek economy.

The derailment

As pointed out by the assistant professor of Economic History at Panteion University Andreas Kakridisthe regime systematically sought to derive political legitimacy through its economic performance.

According to him there is a dimension which “calls into question the image of a regime that was at the exclusive service of a narrow circle of interests of big businessmen and shipowners, not that the economic oligarchy was not favored, but it was not the only one that was favored” as he said, explaining that “credit and rapid economic growth helped and created the scope for corporatization or even the appeasement of large sections of the population.”

However, the instrumentalization of the economy and growth rates leads to the derailment of ’73-’74. In terms of corruption, which the junta has accused civilian governments of arresting, the regime has shown a remarkable record.