Skip to content Communist Party of Greece

Personal tools
You are here: Home » Documents » 18th Congress » CHAPTER 4: ECONOMIC DEVELOPMENTS IN GREECE



A. Its position in the imperialist system


26. In the period from the 17th Congress until now, the export of capital from Greece to the world market, especially SE Europe was reinforced, as well as its active participation in imperialist interventions for the control of markets.


Within the framework of the uneven development, Greek capitalism maintains its upgraded position in the Balkans, which was accomplished after their becoming capitalist, while its intermediate position in the world imperialist system does not change.


The Greek economy maintained a significantly higher rate of annual increase of the GDP (almost double) than the average of the Euro zone for the last four years. In general, the mean annual rate of increase of the GDP for the twelve-year period 1996-2007 reached 3.9%, resulting in closing of the gap with the most developed economies of the EU. The per capita GDP of Greece is equal to 88% of the average of the EU-15 (the 15 member states before the expansion of 2004) and 98% of the EU-27 (the current 27 members).


According to the data of Eurostat, after 2004 both the trend of efflux of domestic capital towards the international capitalist market and the trend of influx of foreign capital in Greece have intensified.


The absolute cumulative magnitude of the effluxes of Foreign Direct Investment (FDI) from Greece is currently above 20 billion Euros, while in 2004 it was only 10 billion Euros. The deposits of Greeks to foreign countries (in savings and overnight rates) reached 15.8 billion Euros in 2007 compared to 5.5 billion Euros in 2006. Similarly the portfolio investments to foreign countries (bonds, notes, etc.) were increased and reached 16 billion Euros in 2007 compared to 7 billion Euros in the previous year.


27. The utilisation by the Greek bourgeoisie of the Balkan market and in general of the needs of expansion of the European capitalist market to SE Europe, which resulted to the expanded EU of the "27", contributed to the upward course of the Greek capitalism.


The total Greek capital invested in the Balkans and in general in SE Europe is now more than 14 billion Euros. Greece holds the third position of foreign investors in Romania and Bulgaria. It is also the largest foreign investor in Albania. The companies of Greek or mixed capital that are settled in the Balkans are now 4,000 and they employ 200,000 employees.


Greece now holds the 2nd position of foreign banking investments in Romania and Bulgaria.


The deregulation of the energy market, by the application of the Energy Community South East Europe Treaty, is utilised through investment proposals by the DEI Inc. (Public Company of Electricity, now privatised) and through investments of the Greek Petroleum group in Bulgaria, Serbia, Cyprus, Montenegro, Albania, FYROM.


The exports of commodities towards SE Europe had also a strong increase; the exports towards SE Europe in 2007 were 22% of the total Greek exports compared to 7.5% in 1997.


28. The concentration and centralisation of capital, the strengthening of Greek monopoly groups in the international capitalist market, mainly in the sectors of shipping and banking, and the upgrading of exports of certain sectors of manufacturing (electric appliances, plastics, paints, industrial equipment, medical products, food) also contributed to the upwards course of Greek capitalism.


In general the acceleration of the concentration of capital was ensured by a series of structural reforms, favorable legislation that reduced its taxation, cheaper labor, multiform support of the monopolies with state funding.


The Greek ship-owning capital controls more than 16% of the shipping capacity of the world's fleet, 21% of the shipping of oil and 22.3% of the shipping of dry freight.


The Greek-owned fleet manages around 25% of the sea transport of oil towards the US and 25% of the exports of commodities by the US (2007).


The ship-owning capital is the only sector of the domestic capital that can negotiate from a powerful position within the EU and has preferential economic ties with the EU and Britain.


The expansion and increase of the shipping capacity of the Greek-owned fleet, the increase of the degree of exploitation of the seamen and the unprecedented increase of the freightage of dry freight ships contributed to the increase of the revenues of maritime shipping as part of the trade balance of 2007. The freightage increased with an annual rate of 45% in the last 4 years, while during the same period the revenue from shipping was in average more than 4% of the GDP of Greece.


Also, during the last 5 years the profitability and the self-owned capital of the domestic banking groups were increased. The average rate of return of the self-owned capital reached 25.82% in 2006 and increased to 27% in 2007 (increase of profits in the Stock Market of Athens of 47% in 2006 and 70% in 2007, reaching 5.7 billion Euros). In the period 2006-2007 there were significant investments in the banking sector of SE Europe and the Balkans (e.g. acquisition of the Finans Bank, Turkey and the Vojvodjanska Bank, Serbia by the National Bank, Greece, of the Mind Bank, Romania and the Agroindustigke Komercijalne, Serbia by the Agricultural Bank, Greece, the Tekfenbank, Turkey by the Eurobank, Greece).


29. The results of the bourgeoisie's effort to manage the re-sorting trend of the market's shares between the most powerful imperialist forces, seeking to upgrade its geostrategic role, became more obvious the last four years.


The bourgeois planning takes into account the importance that the EU gives to its oil supplying by Russia, as well as Russia's pursuit to reinforce its position in the energy sector of EU's market. In this framework, the contradictions between the US, Russia and the EU for the transport of energy and commodities between Asia and Europe are intensified. At the same time, the ruling class attempts to actively participate in the potential restructuring of imperialist alliances and rivaling poles, characterised by the gradual approach of Russia with Germany and Italy and the self-contained moves of France in the Mediterranean region.


30. The bourgeois planning focused on two mutually dependent axes and has achieved some initial successes:


a) The emergence of the country as an important route of the energy and commodity transport networks, combined with the ensuring of its secure energy supply.


b) The improvement of the competitiveness of the domestic monopoly groups in the energy market of SE Europe. This choice is combined with the goal of the upgrade of Greece to a finance, trade and tourist center of the region.


The Greek bourgeoisie participates actively in the struggle for the prevail of antagonistic plans for oil and natural gas transport in the region, which are supported on the one hand by the US and on the other by Russia.


The Greek government moved to sign agreements for the implementation of both the Russian Burgas-Alexandroupoli oil pipeline and a branch of the South Stream natural gas pipeline towards Italy.


At the same time Greece participates in the construction and operation of a pipeline of Azeri natural gas from Turkey to Italy, which is supported by the US.


However, the participation of Greece in the Russian plans, on the one hand weakens the implementation of some antagonistic plans of the US (Nabuko natural gas pipeline, AMBO oil pipeline), and on the other hand objectively contributes to the upgrade of the Russian influence on states that have joined NATO (Bulgaria, Italy).


The bourgeois planning attempts to utilise both the geographic region of Greece as the closest European maritime destination from Asian countries (China, India, etc.) and the expansion of the EU, which guarantees an uninterrupted land transport of commodities from Greece to the European market, to the region around the Danube and to the markets of the former Soviet Union. Therefore it emphasises to developing some strategic transit seaports (Piraeus, Thessalonica, Patras, Igoumenitsa, and Heraklion). Their management is claimed by international monopoly groups that dominate the respective deregulated European market (e.g. Arabic groups, European groups). The seaport of Piraeus has been already obtained by the Chinese group of COSCO.


31. In general, an upgrade of the collaboration with the ruling class of Russia in the sectors of military equipment, trade transactions, tourism, investment in the Balkans and the Black Sea, construction for the winter Olympics of 2014 is marked.


In the framework of the participation of the bourgeoisie to the restructuring of the imperialist alliances, the promoted agreements with German groups as strategic investors both in telecommunications (with Deutsche Telecom) and to a lesser degree in electricity (collaboration memorandum with RWE) should be examined. These investments are concerned both with the domestic market and with the SE European market.


32. It appears that in the mid-term (next four years) more likely there won't be a noteworthy change of the position of Greek capitalism, taking into account the rate and the magnitude of concentration and centralisation of capital, the relative magnitude of the GDP compared to the neighboring countries, the magnitude of the EU subsidisation of the domestic capital [the EU resources of the National Strategic Reference Framework (NSRF) 2007-2013 reach 24.4 billion Euros], the contribution of the penetration to SE Europe to the development of Greek capitalism, the increase of the degree of exploitation of the working class and especially the immigrants.


In a longer term the position of Greece may change, as a result of both the antagonisms and contradictions of the uneven capitalist development and the evolution of the capitalist crisis cycle in the domestic and Balkan market.


The complex effect of the following factors to the course of Greek capitalism in the next years should not be underestimated:


The worsening course of the trade balance of the country


33. The annual expansion of the trade deficit is continuous in the last five years, with an unabated rate, as the annual value of imports is multiple times higher than the annual value of exports. The ability to substitute the imported industrial products is decreased after the withdrawal of the domestic production protection in the expanded EU of 27 members and the existing restructuring of the Greek capitalist economy. The trade deficit exceeded 40 billion Euros in 2007 compared to 22.6 billion Euros in 2003. The worsening of the trade balance is a reflection of the negetive impacts by the operation of the Greek economy within the Eurozone and in general within the deregulated EU market. The workers, especially in manufacture and agriculture, will be the ones to suffer by the negative impacts.


Regarding the geographic distribution of Greek exports, the realignment towards the Balkan and SE European countries, which started in the mid 1990s, is continued. During the five year period between 2002 and 2007 the percentage of the Greek exports towards the EU-15 (as a fraction of the total exports) decreased from 48.5% in 2002 to 44.2% in 2007.


The aforementioned also underscore the impact on the trade balance by a possible entry of SE Europe in a recession phase in the next period.


Of course, the ruling class is attempting a restructuring of the Greek exports aiming to increase the portion of the commodities from sectors with high organic composition of capital ("with intense technology and specialised labor"). The last twenty years the products of sectors with a low organic composition (with intense labor, e.g. textile, clothing, furniture) decreased as a fraction of the total exports from 36% to 20%, while the products of sectors with a high organic composition of capital (with intense technology, e.g. telecommunication equipment, medical tools) increased from 6% to 29.9%.


The impacts of the interweaving of domestic and foreign capital within the framework of the adaptation in the world imperialist system.


34. The Foreign Direct Investment (FDI) in Greece were doubled in the four year period 2003-2007 and reached cumulatively 35.8 billion Euros compared to 17.7 billion Euros in 2003. Similarly the influx of capital for portfolio investment (state bonds and placement in the Stock Market of Athens) reached 33.8 billion Euros in 2007 compared to 15.1 billion Euros in 2006.


The incoming FDIs are dominated by French, German and Arabic groups, which the one hand buy significant packages of stocks of companies in strategic sectors of the economy (energy, telecommunications, banks, constructions) and on the other hand contribute to the increase of their issued share capital. Particularly during the period 2005-2007 there were certain significant FDIs: In the banking sector by the French groups Societe Generale (obtained the General Bank) and Credit Agricole (obtained the Trade Bank), by the Arabic group Dubai Financial (obtained the banking group Marfin); in the telecommunication and informatics sector by the US company Texas Pacific (obtained the Q-Telecommunication Inc.), by the Russian group Sistema (obtained the Intracom Telecom), by the international group Rhone Capital (obtained Infote), by the Egyptian group Wind (obtained Wind Hellas); in the energy sector by Endessa Europe (obtained Mitilinaios' group); in the cement industry by the French Lafarge SA which obtained the stock capital of AGET-Hercules owned by the National Bank; in the food sector by the Marfin group which obtained Vivartia.


A new cycle of acquisitions and FDIs is evolving. It regards infrastructures of maritime transport (large seaports, Piraeus, Thessalonica), banks, constructions, the OTE Organisation of Telecommunications of Greece, the DEI (Public Company of Electricity (now privatised)), as well as the activities of other powerful alliances of foreign and domestic capital in the energy sector, e.g. Iberdrola - Motor Oil, Gazprom - ENEL - Kopelouzos group, Edf/Edison - Elliniki Technodomiki - Biochalko.


The increase of influx of foreign capital for Foreign Direct Investment in the domestic market, combined with the portfolio investments, gives a boost to capitalist development. It contributes to the formation of alliances and to the tightening of the connection/interweaving for the creation of larger, more competitive groups that will expand their activities to the emerging markets of SE Europe and the Mediterranean.


On the other hand, the antagonism of imperialist centers and international monopoly groups is intensified. They compete for the control of parts of the domestic market, particularly of strategic sectors of the economy due to their significance for the control of the wider region.


The consequences of the domestic economy developments must be assessed within the wider framework of the inter-imperialist contradiction and the inter-monopoly antagonism for the control of the region. The region is furthermore characterised by secessionist and nationalist tendencies (e.g. Kosovo, FYROM) and by the increased military presence of the US in the Balkans. These tendencies are utilised and instigated by the imperialist plans for the control of the region.


These contradictions will impact the mid-term movement of capital and commodities in our country and the wider region. In general, the movement of capital is determined to a large degree by the wider framework of the relation of the economy and politics, by the geostrategic interests of the ruling classes and not exclusively by the potential profitability of each monopoly group.


It is noted that the choice to strengthen the relations of Greek capitalism with Russia, Germany and France is not supported at the same degree by all the segments of the bourgeoisie. The participation of our country in NATO and the political and military dependence on the US objectively limit the bargaining capacity and the room for maneuvers. However, the active incorporation of Greece in the plans of the hard core of the EU is becoming the basic tendency. This incorporation reflects the strategy of autonomous military reinforcement of Europe. 


The non synchronised development of a crisis in the Balkan economies


35. A potential development of a crisis of the Greek economy before its development in some Balkan economies, especially Romania, may overturn the current unevenness. Of course today Greece surpasses significantly in terms of the GDP magnitude, the labor productivity and technology development level, the FDIs.


Romania, with a domestic market of 20 million people and solid infrastructures, is a rising economic power. Bulgaria, like Greece, is attempting to manage the contradictions of the US, Russia and EU as much as possible to its benefit and to become an energy node. After 2002 the influx of FDI to Bulgaria, Romania, and Turkey are strengthening compared to Greece, mainly due to the cheaper labor and the low tax rates.


The impact of this development on the relative position of Greece is contradictory. On the one hand, it is estimated that the influx of Greek capital to the Balkans has contributed 15% of the mean annual rate of the domestic GDP increase in the last decade (repatriation of profits, etc.). The access to a reserve of cheap raw material and to a large market of 115 million people helped to the restructuring of the Greek manufacture towards the production of higher value products (chemicals, processed metallurgy products, etc.). On the other hand, the gap between Greek capitalism's higher development and that of the other Balkan countries is gradually closing.


The contradictory relation of antagonism and collaboration of the Greek and Turkish bourgeoisies.


36. Turkey has a large domestic market, a geostrategic location and a significant military and political power in the region. At the same time it is characterised by a deeper unevenness of the development of various areas of the country and by relatively degraded infrastructures (electrical grid, seaports, etc.). In addition, a large portion of the population has a low educational level.


After 2003 it has maintained maintains a higher development rate (mean annual GDP increase of more than 6%), while it is the 17th largest economy of the world.


It is the preferred route of the US plans for the transport of oil and natural gas towards Europe and the US (e.g. the Turkey-Greece-Italy natural gas pipeline, Baku-Ceyhan oil pipeline).


Also, the Turkish government is negotiating with the US for extensive exchanges, so that it won't end up claiming the oil-rich region of northern Iraq (Kirkuk, Mosul, etc.).


At the same time, the Franco-German axis is still strongly against the accession of Turkey to the EU, while Greece is the only full member of the European Economic and Monetary Union in the region. The Russian energy transport plans, which are advancing, are bypassing Turkey to a large degree, while they include Greece for their implementation.


The implementation of the Russian plans is reducing Turkey's geopolitical role in the energy sector compared to that of Bulgaria and Greece. At the same time, after the increase of the oil price, the importance of Aegean Sea's control is increased, due to its unexplored and untapped oil reserves. This fact intensifies the contradictions in the region.


Regarding the direct economic relations, the FDIs of Greek companies in Turkey are increasing. The volume of trade has increased during the past years, but the Greek exports were greatly reduced in 2007.


The peoples of Greece and Turkey should be alert regarding the maintenance of peace and the stability of the borders, given the continuous push of the imperialist plans for the control of the wider region.




General Assessment


 37. The last five-year period the annual rate of the GDP increase of the Greek economy remains higher than the average of the Eurozone and of the EU-27, like in the previous five-year period. In general, during the last 12 years the Greek economy is one of the fastest developing economies of the EU and is in a phase of constant expanded reproduction.


The capitalist development was based on the increase of the productivity, of the exploitation degree and of the centralisation of capital (acquisitions, mergers). The increase rate of investment of monopoly groups slowed down significantly in 2007. The total net investment of constant capital increased by 4.4% in 2007 compared to 14.8% in 2006.


The National Reform Program 2005-2008 of the government pushed a series of interdependent structural reforms that aimed to improve the competitiveness of the domestic monopolies, to create the preconditions for the increase of investment in the domestic and SE European market, to expand faster the flexible employment relations and the new terms of retirement that make the labor power cheaper. The concentration and centralisation of capital was accelerated by the government policies, first and foremost by the multiform state subsidy of private investment plans (Development Act 3299/2004, 3rd EU Framework Program, NSRF, etc.). 


The tax reform had the same direction, reinforcing the big capital. It reduced the tax rate of companies from 35% in 2004 to 25% in 2007 and it abolished the Big Landed Property Tax by introducing the Flat Rate Landed Property Tax.


A basic form of state monopoly capitalist adjustments, adapted to the deregulated markets, were the Public-Private Partnership (PPP), which is a form of the interweaving of the state, as the collective capitalist, and the monopoly groups. The lion's share of the PPPs is taken by a handful of monopoly groups, at the expense of small companies and the self-employed. 24 Joint Partnerships, with a total budget of 3.1 billion Euros, were approved during the 2006-07 two-year period in the sectors of Sports, Health and Education. The Concession Contracts that are ratified by the parliament are a specific form that guarantees the profitability of the monopolies. The highways alone that were bided through Concession Contracts after 2004 had a total budget of more that 8.6 billion dollars. 


The policy of privatisation was accelerated by the decrease of the state's shares in OTE (telecommunications), Post Office Savings, and Piraeus Seaport. In the period 2004-07 the relevant total state income reached 6 billion Euros. These privatisations were accompanied by relevant legislation, e.g. the law for the Public Utility Companies, aiming at the increase of the exploitation degree of the workers in these sectors.


In the agricultural sector and especially in farming, the new Common Agricultural Policy (CAP) has been promoted, aiming at improving the competitiveness of the EU agriculture in the international markets and at accelerating the concentration of land and production. This policy resulted on the one hand in shrinking the agricultural production and on the other in its further concentration, in the decrease of the self-employed farmers and in the increase of the farm workers. At the same time the imports of agricultural products were increased.


The private companies have an ever increasing role in the education field. There is a gradual push for the deregulation of the Higher Education and for the recognition of private universities. The law for the evaluation of private colleges is the first step. THE essential services for the operation of schools (e.g. maintenance, cleaning, security) as well as the long term management of schools are assigned to private companis through PPPs with the participation of City Administrations. The statutory participation of employers' institutions in bodies of planning and educational policy as well as the involvement of "sponsors" to the content of education expands (e.g. the collaboration memorandum of the Ministry of Education with monopoly groups for digital education).


Similarly, in the health care sector the trend of concentration and centralisation of capital was reinforced. The 10 largest enterprises of the sector control more than 58% of the relevant market. The entrepreneur activity is reinforced by the PPPs that were approved by the relevant inter-minister commission in 2006 regarding the establishment of new hospitals (e.g. Children Hospital of Thessalonica, General Hospital of Preveza). The presence of banks involved with health care is also reinforced (e.g. the acquisition of the majority of stocks of the "Mitera" and "Hygia" hospitals by "Marfin").


Developments of the social composition and structure of employment


38. During the last decade (1997-2007) the wage labor and the employers are the categories that are increasing, while the category of the self-employed is reducing. The wage labor surpassed the 2.8 million employees in 2007 having an increase of 800 hundred thousand employees in the last decade, while the self-employed were reduced by 400 hundred thousand during the same period and now reach 960 thousand people. The assistants in family businesses were significantly reduced by 170 thousands.


The great majority of the wage earners belong to the working class, which also includes the unemployed.


The total employment increased during the decade by 650 thousand employees and reached 4.5 million employed people in the whole economy. This category includes all working people, regardless of their property relations with the means of production.


At the same time, unemployment maintained the high level of 7.3%. In reality it is higher, since the data doesn't include those who search for a job for the first time, women that stopped working for some years due to maternity, part-time employees, etc. The unemployment among youth (15-24 years old) surpasses 22% and among women 10%.


In the period 2002-2005, the number of people employed in the agricultural/primary sector greatly declined and in manufacturing there was a small decrease. On the other hand, the employment in the so-called "tertiary sector" increased from 60% to 62.7% as a fraction of the total employment. In this sector the bourgeois statistics combine some industrial sectors (transportations, telecommunications) with sectors that deal with the circulation of commodities and capital (trade, finances), sectors that include trading and manufacturing activities (tourism), state services (administrative and social) as well as commercialised sectors of health care, welfare and education.


Despite this methodological problem, the aforementioned change is a general trend of modern capitalist development. In stronger capitalist economies, such as France and Britain, the percentage of workers in the "secondary" sector is low compared to the total employment, and it's also smaller than the respective percentage in Greece. In contrast, the percentage of the "tertiary" sector compared to the total employment in Britain, France, Germany and Italy is larger than that of Greece.


39. In Greece, during the period 1993-2007, the sector of trade has had the largest portion of employment, while the other two large sectors, farming and manufacture, have had a reduction in the number of employees. The fraction of trade in the total employment increased from 15.8% in 1993 to 17.7% in 2007, while the fraction of farming and fishing reduced from 21.3% to 11.2% and of manufacture also decreased from 15.6% to 12.4%. These trends reflect on the one hand the development of labor's productivity, which has not been followed by an equivalent reduction of the working time and on the other hand the waste of social labor within the framework of the capitalist relations of production.


In every sector of the economy there is an increase of the percentage of employees working in larger companies. In the secondary sector, the companies with less than 10 employees were reduced from 66% to 60% of all the companies. Similarly in the tertiary sector they reduced from 67% to 57%. However, the trend of concentrating of the working class in large companies is slow. Suggestively, during this specific period, in the sector of trade the ratio of wage earners per employer rose by only one unit (from 3.4 in 1993 to 4.4 in 2006).


In general we can assess that the trend of fast and complete destruction of the small and medium companies by the monopoly groups is not affirmed. In several sectors their destruction has a larger extent than their reproduction, the opposite happens in other sectors. But overall, the middle strata are reproduced under worse terms under the pressure of the monopoly capital domination and the system's structural adjustments.


A trend that develops in the self-employed sector is its shrinking and the acceleration rate of this trend will depend on the economic crisis development time.


The worsening of the condition of the working class


40. Generally, with the support of the state, there was an expansion of the flexible forms of employment, of the temporary and part-time employment, the non-enforcement of the Collective Bargaining Contracts, the work time adjustments. The enforcement of part-time employment according to the official statistics (which don't include short-term project employment, "Stage" programs, etc.) doesn't surpass the 6% of all employees. However, it has strong variations between various sectors, and has particularly high percentages in farming (12.8%), tourism (8.1%), education (11%) and smaller in trade and manufacture. It concerns mostly the youth and women.


As far as the weekly work time is concerned, the sectors of transports, construction, tourism, manufacture and trade are particularly surcharged. In these sectors the wage earners work for more than 41 hours per week. Besides, we should mention the problem of unregistered/uninsured employment which is particularly intensified among immigrants. The foreign workers reach already 14% of the officially insured workers of IKA (Social Security).


The increase of the exploitation degree, which manifests itself by the continuous price increases combined with the frosen wages, is not a transient phenomenon. In fact, the increase of the prices of the widely consumed commodities affects particularly the decline of real wages. In the period 2007-2008 this increase has been at least 2% higher that the official inflation rate.


The bourgeois political forces argue that the high prices are caused by restrictions on free competition or by interferences in the commodity circulation sphere. These arguments are deceptive. The government provokes when it proclaims that the situation will improve by the upgrading of the activities of the "Competition Commission" and in general by the strict implementation of the laws. The laws that deregulate the market and protect the capital's profits paved the way for the worsening of the situation and supported the formation of cartels that operate against the people's interests in many sectors of the economy.


2.5 million wage workers have an income of less than 704 Euros per month, while during the period 2000-2006 there was an increase of the gap between the increase of productivity and the increase of the average real salary. During the last 10 years, the salaries dropped by 10% as a fraction of the total Gross Value Added. This trend reflects the increase of the exploitation degree. Suggestively, in 2006 the net profit per worker was 16,000 Euros in the trade sector and 10,000 Euros in the manufacture sector. At the same time, the wage earners and retirees shoulder 50.1% of the total direct income taxes compared to 36.3% of the businesses.


The problem is particularly intense in the wage labour among women, as 3 out of 4 workers with a monthly salary of less than 500 euros are women. Reversely, only 1 out of 5 workers with a monthly salary more than 1,500 Euros is a woman, while there are sectors where a woman's salary is 10% smaller than that of her male co-worker.


The prospect of further worsening of the position of the wage-earners and the self-employed is reflected by the rise of the public debt which reached 216 billion euros in 2007 compared to 158 billion euros in 2004. The measures to limit the public debt lead also to the shrinking of popular income and of the satisfaction of people's needs, while the last 3 years there was a significant increase of the mean interest rate of public lending that benefits the finance capital. In addition, the majority of the people shoulder the extortionate military spending deriving from NATO's planning. Greece ranks second among the members of NATO in military spending as a fraction of the GDP (2.8%). The new armament program 2006-2015 is expected to surpass the 26.7 billion Euros.


At the same time the expenditure of workers’ families for Education and Health are increasing. According to data from Eurostat, the Greek households have the second largest private expenditure for health and education among the EU 27 countries, almost double the EU average.


In general, it's a fallacy to believe that the reinforcement of monopolies brings an equal degree of improvement to the life of the working class and the people. The increase of the gap between the increase of productivity and the course of the average real salary has been dominant in all developed capitalist economies during the last 2-3 decades and has been accompanied by governmental and international measures that intensify the terror on the work places and the restriction of workers' rights.


At the same time, the bourgeois political administration is worried by a potential unrestrained people’s consumption decrease. Over the last 10 years the upwards course of Greek capitalism was supported by the trend of the people’s consumption increase. In 2007, it slowed down to 3.2% compared to 4.2% in 2006, while there was a further slowing down in the first semester of 2008. Similarly the volume of retail sales increased by only 2.3% in 2007, compared to 8% in 2006.


This specific consumption increase depended on the increase of lending of the workers’ families (mortgages, consumer loans), on the continuous influx of immigrant workers and on some elementary state measures regarding extreme poverty (e.g. EKAS ("Social Solidarity Welfare for Retirees"), unemployment benefit, increase of the farmers' pensions, etc.). In 2007 the total loans of popular strata reached 93.9 billion Euros compared to 16.9 billion Euros in 2000.


For 16% of workers’ families the cost of paying the loan bills is more than 40% of their total income, according to a research by the Central Bank of Greece in 2008. The percentage of households that no longer pay their consumer loan bills reached 16.8% in 2007 compared to 14.9% in 2005. Already during the first quarter of 2008 there was a sharp slow down of the increase rate of mortgages.


Changes in the structure of the Greek economy


41. The decrease of the agricultural/primary sector as a fraction of the total GDP constitutes a general trend in the strongest economies of the EU as well as a noteworthy change in the structure of the GDP. The primary sector includes farming, stockbreeding, forestry and fishing.


The shrinking of agricultural production occurred along with the concentration of land and production. The concentration of production is higher in the sectors of stockbreeding and fishing (aquiculture), which don't require the concentration of farm land and lower in agriculture where the concentration of production requires the concentration of land, with the form either of property or of leasing.


Despite the important changes regarding the concentration of land and production, Greece still comes behind the average of the EU-15 and even more behind the most developed economies of the EU. The average holding size in Greece is 48 decares (12 acres) while the average plot in the Eurozone is 214 decares (53.3 acres) (according to 2006 data). The number of farm plots in Greece is much higher than the number of the agricultural employment. In 2006 the farm plots were 834 thousands and the people engaged with farming were 533 thousands, while in the Eurozone the plots were 5,843 thousands and the people engaged were 6,244 thousands. This fact corroborates the serious structural problem of small plots in the Greek agricultural production.


42. After 2000, manufacture as a whole had a continuous annual revenue increase with an average of 4%. However, some sectors (textile, clothing, house appliances, and transportation vehicles) continue to be in worsening course. On the contrary, branches like computers, medical instruments, recycling, metallurgy, refining, chemical products and printing appear to be particularly dynamic. The production of energy and of constant consumer goods has a steady increase.


The sectors of telecommunications, electrical machinery production, industrial equipment, plastics, and paints, flavoring materials and metal products also have a course of increase.


The sector of construction had an annual decrease of the rate of investment in housing by 6.8%, after the large increase by 21.5% in 2006.


The concentration and centralisation of capital is particularly high in the sectors of energy, communications and transportations, while it is relatively low in construction and trade, despite the strengthening of the monopoly groups in these sectors over the last 4 years.


Regarding the course of the concentration and centralisation, the strategy of the EU is twofold: on the hand it aims to accelerate this course and on the other hand it aims to maintain some balances in the reproduction of the total social capital so that it will avoid a direct and violent shrinking of the small and medium businesses.


In Greece, the effort to implement these two directions has been upgraded after 2004 with some measures of tax reductions and of state subsidy increase for small businesses. These measures of course can not negate the general trends of the decrease of the small business market share and of the increase of their dependence on the banking and in general monopoly capital.


Uneven development


43. The uneven development of Greek capitalism is its permanent organic characteristic. The regional development programs could not abolish it. The governmental and EU development tools can not negate the consequences of the anarchic character of capitalist production and of the intensification of the competition between monopoly groups. They manage and limit in the short term some extreme phenomena of inequality.


In 2006, the annual per capita income in Attiki (the county where Athens is) reached 26 thousand Euros, while in Western Greece, the poorest region of the country, it reached 11.5 thousand Euros. The last places are occupied by Eastern Macedonia/Thrace, Northern Aegean and Epirus. Epirus had a very small rate of annual increase in the period 2005-2006. There were changes in the strategic position of some counties (e.g. Thesprotia) due to their upgrading in the plans for the transport of energy and commodities, which is related with an increase of economic activities.


The largest portion of manufacture investments outside of Attiki in the period 2004-2006 was in the Regions of Peloponnese, Central Macedonia, and Eastern Macedonia/Thrace. An increased contribution of manufacture in the structure of the GDP can be seen in the counties of Boeotia, Euboea, Phthiotis of the Central Greece Region; the county of Corinthia in the Peloponnese Region; the counties of Thessalonica, Kilkis, Imathia in the Central Macedonia Region; the counties of Xanthi/Rhodope in the Eastern Macedonia/Thrace Region.


The General Framework of Land Planning serves the need to secure the competitiveness of the monopoly groups and is in accordance with the choices of the EU for the free move of capital, labor, commodities, and services in the EU market. It is based on the policy of further commercialisation of land, housing, infrastructure works and of further deregulation of strategic sectors of the economy. It abolishes some legal restrictions concerning the use of land, aiming to assist the investing activities of the capital, particularly in tourism, energy and industry. It supports the effort of the country to rise as a hub of transportations, energy and telecommunications in SE Europe.


Axes of the bourgeois economic policy in the following period. Their impacts on the working class


44. In the next period the attack of capital will intensify, aiming to increase the exploitation degree of the working class. There will be an intensification of the effort to implement the directions of the EU regarding the expansion of flexible employment, of temporary employment, of non-collective bargaining, of the Bolkestein Directive. There will be an acceleration of the implementation of legislation that aims to the unhindered movability of workers to practice their profession in all member-states of the EU, through the deregulation of the service market and of the so-called "closed professions" (e.g. freelancer lawyers, engineers, pharmacists, tour-guides). This specific plan is promoted in parallel with the directions of the Bologna Process in education for the dissociation of university degrees from professional rights, aiming to accelerate the proletarianisation of scientists.


At the same time, through the Updated Stability and Development Program and the National Strategic Reference Framework (NSRF 2007-2013) the bourgeois policy specialises its goals for the next period and conceals their class content. It veils the exploitative substance of the capitalist road of development and presents the attractiveness of the country to investors, the transition to the so-called "knowledge society", etc., as nationwide goals.


The NSRF aims to concentrate and utilise the resources of the EU and state funding to big works and infrastructures that will serve the strategic plans (e.g. large highway axes, upgrading of airports and seaports, spreading of broadband networks). -


The policy of privatisations will also continue. Its next targets will be the Public Gas Company (DEPA), the assets of the Tourist Development Company (ETA), the Olympic Airways, the basic seaports of the country, the Greek Railroad Organisation (OSE). In addition, there will be an intensification of the competition of the most powerful European groups to become the strategic investor in the Public Company of Electricity Inc. (DEI Inc.).


An intensification of the competition of domestic monopolies, allied with foreign groups, mostly from Europe, is expected:

  • In the sector of energy, where the deregulation course has not yet been completed.

  • In the sector of construction, where the struggle for the final distribution of the funding from the NSRF and for the distribution of the PPPs and the Concession Contracts continues.

  • In the sector of telecommunications, where the domestic market is expanding due to the spreading of broadband networks.

  • In the sector of banks, where the conditions for a new round of acquisitions and mergers are developing.

  • In the sector of steel, after the formation of the alliance between the group of Stasinopoulos with the American group Nucor against the Halyvourgiki Inc.

  • In the sector of cabotage (domestic sea transports), for the control of the market shares.

  • In the sector of Health Care, where the concentration and centralisation of the sector's capital is continuing and will intensify.


The development of broadband networks and the capability of the Media to produce digital programming intensify the competition in this sector, since the media owners will claim market shares in the whole spectrum of production, distribution and screening of audio-visual commodities (e.g. movie theaters, music agencies, etc.). The intensification of the competition leads also to the restructuring of the alliances in the Media sector and to open confrontation, the top-ranking example of which is the withdrawal of the MIG group from the SEV (Greek Federation of Enterprises) (Vgenopoulos vs. Daskalopoulos). Also there is a reinforcement of SEV's own pressure, for the acceleration of the capitalist structural reforms and the respective reform of the political system.


The condition of the working class and the poor sectors of the popular strata will worsen even more if the slowing down of the development rate continues, and much more if there is a crisis.


In 2007 and even more in the first semester of 2008, the deceleration of the rate of investment and of popular consumption is becoming obvious. The sector of construction is now in recession, which will negatively impact the development rate of specific sectors of manufacture (e.g. cement industry, timber industry).


The support of the domestic capital by the EU through the NSRF supplies for the time being for a relatively increase rate of investment that contains the escalation of the deceleration. However the recession in the Eurozone and the oil price increase will further set back the rate of development of the Greek economy and may have a negative impact on the sector of tourism and sectors of manufacture that are oriented towards exports. The increase of the interest rates by the European Central Bank will lead to the inflation of the public debt and will increase the burden of the loans on the popular households. These developments will lead to a new "exsanguination" of the popular income.

Home | News | Campaigns | About KKE | Documents | International Meetings | On the EU | Theory & Socialism | Other Articles | About Greece | Photos / Music | Printings | Red Links | Contacts

Communist Party of Greece – Central Committee
145 leof.Irakliou, Gr- 14231 Athens tel:(+30) 210 2592111 - fax: (+30) 210 2592298 - e-mail:

Powered by Plone