Austerity policies were introduced when the economy was already in recession, and made it deeper still. In political terms, the distinctive feature of the “Greek Programme” is its high degree of conditionality. The implicit loss in national sovereignty has contributed to a widespread sense of loss of control, discrediting parliamentary politics and fuelling populism and extremism on Left and Right. Also, the Greek welfare has fared poorly under pressure. Traditionally geared towards retirement pensions it has failed to support the incomes of those suffering job loss and/or earnings loss.
The paper focuses on how the failure of Greek welfare to soften the blow of the recession risks turning an economic crisis into a social emergency and a political catastrophe. By critically examining the evidence, it argues that this was not inevitable. A more effective response to the crisis, strengthening the social safety net and averting dire political consequences was (and, to some extent, still is) possible. But that required path-breaking reaction on the part of political and social actors that was hard to achieve, and has so far failed to materialise.
