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The Greek Euro-Crisis: Between Government Failure and Failed Government
The Greek fiscal crisis of 2009 was soon transformed into a full-blown sovereign debt crisis that engulfed the whole of the Eurozone into a deep institutional, political and economic crisis. The bailout agreements that followed, and the pervasive austerity programmes that derived from them, led to an unprecedented economic and social crisis in Greece, with national income falling cumulatively by almost 25% in the space of four years and unemployment sky-rocketing to near 30%. With them, a number of social pathologies emerged ' or resurfaced ' including a worrying rise in xenophobia and racism, a deepening of poverty, joblessness and inequality, and record increases in suicide rates, depression, ill-health, etc. These developments led, almost unavoidably, to a polarisation also in the political arena, with a deep division between the pro- and anti-memorandum camps and a blame-game between the supporters of austerity and those arguing for a more democratic and more solidaristic Europe. This paper argues that the dilemmas and half-debates that have emerged in this context, in both Europe and Greece, are based on a largely questionable set of premises that, as a result, have led to a mis-informed framing of the debate concerning Greece's exit from the crisis. It does so by revisiting ' and in a way seeking to challenge ' three 'common perceptions' about the fundamentals of the crisis: the 'incomplete union' proposition, the 'lazy Greeks' hypothesis, and the 'austerity doesn't work' thesis. Although each of these hypotheses encapsulates some truth about the current predicament, it is argued that the roots of the crisis in Greece ' and, by implication, in the Eurozone ' are situated elsewhere: in the shallow appreciation of the challenges posed to Greece and the need for a structural transition in the country; and in the discrediting of industrial policy, as a primary responsibility of government, in the European policy doctrine.