Greece since 2004: Whither bound?

The easy money of the 2000s helped Greece lose all sense of strategy in foreign and economic policy. It's now acquiring elements of a strategy, but it could be doing so with more speed and vigour

A dusting of snow on Ymittos in Athens, 6 February 2023

Setting the Scene: 2004-2009

Two-thousand-and-four was a great year for Greece. It won the Euro2004 football championship and the basketball championship, held wildly successful Olympic Games that showcased the country, elected a conservative government that vowed to clean up 11 years of socialist corruption and maintained the run of economic growth that had begun in the early 1990s. But it also lost its sense of purpose. No new course of action followed a failed referendum to reunite Cyprus under the Annan Plan. Falsely telling the EU that exploratory talks with Turkey on maritime disputes were “satisfactory” opened that country’s accession process and deprived Greece of leverage without resolving anything. Promises to turn Thessaloniki into the economic capital of the Balkans failed to bear fruit. Greece meandered without a foreign policy strategy or an attempt to redefine itself in the region. It was almost as though cheap money and the end of the Cold War had made policy irrelevant. Greece’s entry into the Eurozone in 2001 had secured historically low interest rates, but the conservative government squandered years of borrowed prosperity without cleaning up politics, boosting competitiveness or achieving lasting domestic reforms in education and social security. Quite the opposite. It undermined transparency and independent authorities set up under the socialists.