Showcase Greece - What Can Be Learnt from the Current Debacle for a Social Europe? (Schaufenster Griechenland - Was kann aus dem aktuellen Debakel fuer das Soziale Europa gelernt werden?)

Abstract

The nationwide violent riots by youths and the general strike in December 2008 in Greece happened in a country, which according to the financial expenses paid by Brussels should be a real showcase of the European model. A quick glance at the statistics of the net recipient countries of the EU budget teaches us that not the poor new member states in the east of the continent, but Greece is one of the prime recipients all financial transfers from Brussels over the last decades. From 2003 to 2006 paid Brussels paid net to Greece 16.5 billion Euros (net), and Greece should be a real model of social coherence, and Lisbon-strategy progress towards a dynamic, knowledge-based society, etc. The apocalyptic pictures of the unrests in this key country in the EU are all the more alarming, because Greece is a member of the Union already since 1981.

The current experience of Greece has a disturbing lesson for the further convergence and integration process of the neighbouring states. Even more alarming than the standstill of the convergence process are unmistakable signs that this EU core member state is confronted with corruption out of control. According to Transparency International Greece only holds rank 57 in global corruption control, and the worst EU 27 Country Bulgaria is even ranked 72nd. Numerous international studies, surveyed in the article, show that Greece is far more controlled by the shadow economy and the underground economy (= organized crime) than Italy.

Our analysis with aggregate data from Eurostat provides further information about the full extent of the current socio-political disaster confronting Greece. On the one hand youth unemployment is a sad record in Europe: 22.9% of young people in the country were without work even before the onset of the current economic crisis, and this value will explode in 2009. The target group accuracy of the social system is one of the worst in Europe. In a regional perspective, Athens is an island of prosperity in a sea of poverty.

In:

East Macedonia, Thraki Sterea Ellada Voreio Aigaio Ipeiros Makedonia Dytiki

youth unemployment was over 30%.

Also our other indicators

* age-and gender-specific and regional employment rates * age-and gender-specific and regional employment rates * Proportion of adult population with only lower education * Research and development expenditure at the regional level * Regional Purchasing Power * Regional Productivity * Regional Lisbon indicator * Regional economic growth

show that Greece, after receiving all these funds from the Brussels structural convergence programmes is having a very deficient regional development. We also show on the basis of our multivariate re-analysis of the data of 2007 UNICEF child poverty study that the Netherlands, Sweden and Denmark had the best performance in Europe in eliminating child poverty. Our closer look at the 40 sub-components of the UNICEF study shows the deep crisis, which Greek youth is facing today. Particularly in the area of the acquisition of cognitive skills, Greece is very poorly placed. Our analysis thus shows that the crisis of the Greek social system unfortunately, has a deeper, even European dimension - the crisis of a heavily subsidized EU member country that has dismally failed.

Note: Downloadable document is in German.

Keywords: Economic Integration, Economywide Country Studies Europe

JEL Classification: F15, O52