In the early 1990s, it became fashionable to portray Greece as an awkward partner or indeed a black sheep in the European Union: an economic laggard, falling behind in the European income league, with large budget deficits and double-digit inflation, who also acted in a particularly uncooperative manner in the attempts made by its Western allies to stabilize the Balkan region. This followed a decade of economic mismanagement and rhetorical outbursts in the area of foreign policy, coupled with the habit of adding dissenting footnotes to joint communiques issued by the European Community (as it was still called at the time) and NATO.

For those who use the term "Balkans" in a pejorative fashion, Greece was behaving like a Balkan country in the EU, adding to the problem instead of trying to be part of the solution in a notoriously unstable and conflict-ridden region. And then came Samuel Huntington, who argued that the clash of civilizations was bound to replace the struggle between liberal democracy and communist totalitarianism, and who then proceeded to identify the major fault lines cutting across the European continent. Greece found itself on the wrong side of Huntington's map, because of its Orthodox tradition, not to mention several centuries spent under Ottoman rule. It all made sense, of course; and it was therefore utterly predictable.

The situation has, however, changed substantially in recent years. Greece is now receiving praise from European and American political leaders and journalists for its moderation in the foreign policy field, and its cooperative stance in dealing with the internal crisis in Albania, the problem of Kosovo, and the non-deployment of the S-300 missiles on the divided island of Cyprus. As well, the improvement registered since 1993 in the main macroeconomic indicators has been impressive, and has been confirmed by the vote of confidence cast in financial markets. The Athens stock exchange has
reached unprecedented heights, registering one of the largest increases among European bourses in 1998, while the drachma has been trading at several percentage points above its central rate since it was admitted to the European Exchange Rate Mechanism in March 1998. At long last, Greece seems to be making a successful transition from the status of an emerging market to that of a mature economy, and the bets are heavily on Greece's admission to the European Monetary Union by the year 2001. Even domestic politics have become less polarized and personalized--and perhaps verging on the boring for the taste of some Greeks, used to charismatic leaders and interminable fights between the good and the evil.

Change and Continuity

This apparent transformation from black sheep to a more ordinary member of the European herd invites a closer look at the kind of change that Greece has undergone over a longer period. During the last quarter of the century, the country has been faced with three major challenges: the transition to democracy, after the fall of the military dictatorship in 1974; the adjustment to EC/EU membership since 1981; and the creation of a new political (dis)order in its northern neighborhood, following the collapse of communist regimes and the bloody disintegration of Yugoslavia. Greece has coped with those challenges at varying rates of speed and with varying degrees of success.

Let us start with the good news. There has been undoubtedly a remarkable consolidation of parliamentary democracy. The fact that this is now taken completely for granted is a sure sign of the tremendous progress achieved since 1974. The dictatorship had lasted for seven years and was usually regarded as one more episode in the highly unstable history of modern Greece to that date. The consolidation of democracy has been accompanied by a major change in the constitutional order, including the abolition of the monarchy--on the basis of a clear majority expressed in a referendum--and the incorporation of large groups of society into the political system, groups that hitherto had been excluded through a variety of mostly informal measures in the aftermath of the civil war that ended in 1949. Consolidation has also been accompanied by a very substantial redistribution of income between different social groups, and between city and countryside. In more recent years, democratic Greece has had the problem of coping with a large influx of economic and political refugees from its neighboring countries and farther afield, without experiencing the ugliness of organized forms of racism and xenophobia.

The ability of the new democratic system to absorb these changes more or less successfully is an unmistakable sign of its resilience. Political parties have succeeded each other in power in a smooth fashion, institutions are broadly respected, and the system of checks and balances functions reasonably well. By the standards of the region, including the countries under communist rule until 1989 as well as Turkey with its own peculiar version of "guided democracy", Greece is a model case of political stability and functioning democratic institutions. Its successful transition to and consolidation of parliamentary democracy has many parallels with the experience of Spain and Portugal.

Now comes the bad news. The quality of democracy in Greece, although unprecedented in the modern history of the country, still leaves many things to be desired. The main weakness lies in the combination of an overblown state and a relatively underdeveloped civil society. The Greek state is both omnipresent and fundamentally weak. Its pervasive influence has been intimately linked to the functioning of a clientele system that it has been precisely intended to serve. On the other hand, state institutions are inflexible and inefficient in performing the traditional Weberian functions. Dimitri Sotiropoulos has aptly described the Greek state as a "colossus with feet of clay." The pressure for change has been mounting. Membership of the EU constitutes a powerful factor pushing for change, and so does Greece's exposure to international competition.

Instead of catering to particularistic interests and the perpetuation of the clientele system, Greece needs state institutions that provide stable and transparent rules of the game, flexible regulation of markets, monetary stability, the promotion and management of economic change, and, last but not least, flexible mechanisms of social solidarity. Such institutions it certainly does not have at present. Administrative reform remains the most important and urgent task--a task from which parties in power have tended to shy away, because the gains associated with such reform would take a long time to materialize while the costs would have to be paid more or less immediately.

In a country where politics has been about anything and everything, and where political parties--either directly or through state institutions--try to exercise control over everything from admission to hospitals to the running of universities and sports, civil society has remained underdeveloped. The quality of democracy in Greece largely depends on the strengthening of independent groups and associations of citizens, which can act as effective controls on the all-expansive tendencies of the state. The relatively recent mushrooming of citizens' movements, mainly concerned with environmental and human rights issues, is therefore a most encouraging sign.

Learning to Fit In

The European Union is now much more than the incomplete common market it had been for many years. Yet European construction is still very much about economics in the wider sense--"low politics" perhaps in classic international relations jargon, but the bread and butter of political life in contemporary democratic societies. European economic integration encompasses three processes: the opening (and regulation) of the internal market for goods, services, persons and capital; the redistribution of resources, mainly through structural policies; and now economic and monetary union (EMU).

Accession to the EC/EU has meant for Greece a radical change in the relationship between the state andthe market. The country has had a long history of high external protection and extensive state intervention in the economy, usually arbitrary and non-transparent, and directly linked to the operation of the clientele system. As a member of the Union, Greece has been forced to adjust to open and highly competitive markets, and also to the requirements of joint rule-setting in Brussels. With the deepening and widening of the process of European integration, the scope of joint rules and externally imposed constraints has been greatly extended, now covering not only different barriers to entry into the domestic market but also inflation, budget deficits and interest rates. In other words, economic sovereignty in the context of the EU has become a relative concept.

Greece experienced considerable difficulties in adjusting to this new economic reality, much more so than the two Iberian countries that joined a few years later. Its maladjustment, which lasted for several years, at least partly explains the tensions that developed between it and both European institutions and partner countries. Greece often asked for exceptions in order to protect its domestic producers; either deliberately or because of administrative inefficiency it was slow in implementing European directives and regulations, and it was sometimes accused of wasting the money allocated to it through EU structural policies. In the meantime, trade deficits kept on growing, financed in part through EU transfers. Macroeconomic instability characterized Greece for many years. Tracking the process of compliance with the so-called convergence criteria set out in the Maastricht treaty, the admission ticket to the final stage of EMU, statisticians of the Union had to add little inserts to their graphs on inflation rates, budget deficits and interest rates in order to accomodate Greece, whose figures were for several years way above those of any other EU country.

This difficulty in adjusting to EU membership--and international competition as well--requires some explanation. Of course, the challenge facing Greece was a formidable one, given its relatively low level of economic development compared to that of its new partners and its long history of protection of domestic producers. Adjustment to EU membership was bound to create winners and losers inside the country; and the experience until now suggests that losers (or potential losers) were numerous--and that some of them were politically powerful. An incomplete list of losers from adjustment to EU membership would include a significant part of Greek business, accustomed to protection from external competition and heavily dependent on state favoritism, especially through public procurement contracts. It would also include most of organized labor, especially in a large state-controlled sector of the economy characterized by over-employment, relatively high pay and low productivity. And it would certainly include many politicians whose survival depends on the clientele system that flourishes in protected markets and under non-transparent rules. The list would also include other less well-organized groups of society, such as many small businesses and the lesser skilled. Unable to adjust to a very competitive environment, but also unable to offer effective political resistance, they are, unavoidably, being sacrificed on the altar of economic restructuring.

Faced with such a situation, Greek governments tried for more than ten years to avoid or simply postpone adjustment. At the same time, they showed great readiness to throw money at any group of society able to make enough noise around the issue. In the process they created another category of losers, one that conveniently happened to be disenfranchised because of age. By that I mean the younger generations in the country who will have to bear the full burden of delayed adjustment, not to mention the burden of servicing the large public debt accumulated during the 1980s.

The turning point came around 1993, when Greece entered a phase of economic stabilization and convergence with the rest of the EU, coupled with a more determined and much delayed effort at privatization and restructuring. Previous attempts in this direction had proved short-lived; but the margin of maneuver has become progressively narrower with time. The prospect of economic marginalization in the context of the EU, the rapidly rising cost of servicing the accumulated debt, and the increasing difficulties in the financing of deficits left Greek governments with very limited options. In the meantime, Greek society (or at least a substantial part of it) had learned a lesson in economics the hard way.

This new phase has been characterized until now by a substantial improvement in terms of economic growth. Inflation and budget deficits have registered a sharp decline, thus rapidly converging toward the EU average. This convergence finally led to Greece's admission to the European Exchange Rate Mechanism in March 1998, an event accompanied by a modest devaluation of the drachma. By the time of writing the drachma had recovered more than half of its earlier devaluation. Despite the remarkable progress achieved in terms of macroeconomic stabilization, Greece failed to be admitted to EMU on the basis of the 1997 figures. According to the Greek convergence plan approved by the EU Council of Economic and Finance Ministers, the country should be able to satisfy the criteria for admission by the end of this year, which would allow Greece to enter the euro-zone in 2001; and the financial markets are apparently betting heavily on its success.

Joining the European Monetary Union constitutes the first economic and political priority of the PASOK government led by Prime Minister Simitis, who was elected by his fellow Socialists to succeed Andreas Papandreou, and then proceeded to win the 1996 elections. This priority is also endorsed by the main opposition party of New Democracy now led by Mr. Karamanlis, a nephew of the other Karamanlis who had dominated Greek politics for much of the postwar period. The two biggest parties in Greece represent approximately 80 percent of the votes. Only two small parties on the Left of the political spectrum, including the unreformed Communist Party, have adopted a negative stance on EMU.

The popularity of Greece's membership of EMU has been repeatedly confirmed by large majorities in opinion polls, even though every Greek in favor of EMU would not necessarily be prepared to pay the price associated with membership. Such support is easy to explain. The search for a collective shield against the enormous instability of exchange markets is coupled with the fear of the political marginalization that would follow should Greece be left out for very long of the most important part of the European construction. And experience suggests that monetary stability would be more effectively guaranteed if responsibility for decisions in the area of monetary policy were to be transferred to the European Central Bank in Frankfurt.

Assuming that the very recent mishandling of the Ocalan affair does not develop into a full-blown crisis for the government, Greek politics in the next few months should revolve around the target of EMU membership, which, if accomplished, will serve as a psychological boost as well as a sure sign that, having erred for several years in the economic wilderness, Greece is coming back into the fold. But it will be one thing to secure membership of EMU, and another to ensure that the Greek economy performs well in this new environment. Greece has entered a long and difficult phase of structural reform, including cutting the state-controlled sector of the economy down to size, overhauling the social security system, and adjusting Greek public administration to the rapidly shifting reality of European integration and globalization. There is still a long distance to travel in this direction.

Many people, including most notably Mr. Simitis, refer to the task as that of "modernizing" Greece. This term is open to many different definitions. If by modernization--or simply reform, as a less heavily loaded term--we understand the process by which Greece can adjust to a rapidly changing European and international environment, it is interesting to observe that the dividing line between reformists/modernizers on the one hand and conservatives/populists on the other cuts right across the two main political parties in Greece. The Socialists, under the leadership of Mr. Simitis, have taken the lead in this process; but he faces strong opposition both inside his own party and from various organized interest groups. The main opposition party adopts a more populist stance, as is natural for parties out of power, especially in Greece where the legacy left by Papandreou is still strong. New Democracy, like PASOK, has brought under the same umbrella a collection of modernizers, technocrats and demagogues.

Will this eventually lead to the realignment of political forces and the creation of new political parties? Until now, the two main parties have shown much resilience. Defectors have usually been punished by the electorate, while attempts to create new parties have fared badly, with the exception of dikki, a small party that appeals to former voters of pasok dissatisfied with the shift to the center-left. On the other hand, both the Communist Party and the coalition of former Euro-communists have remained close to the 3 percent barrier below which admission to the national parliament is denied.

In times when ideological differences are not always easy to discern and the range of political choices becomes rather narrow, there is a big risk of vacuous talk and populist rhetoric; and there is no shortage of candidates to perform those functions in any part of the world. Has the time for coalition governments come in a country where the few previous experiments of the kind have been very unsuccessful? And what will be the role of civil society as the state gradually adjusts to EU membership and globalization? In this transition phase, any attempt to provide answers to those questions becomes a hazardous exercise.

Surviving in the Balkans

If in economic and political terms Greece is gradually becoming like any other European country, this is certainly not true of foreign policy. The reason is simple: the Greeks live in the rough neighborhood of the Balkans, where nation-states have a relatively short history, national frontiers are not generally considered sacrosanct, and ethnic minorities are frequently manipulated in order to destabilize neighbors and thus lay claims on a possible future redrawing of political maps.

The collapse of the old communist order on Greece's northern frontier may have opened the way for the establishment of democratic regimes. But its first effect has been to unleash the old nationalist (and irredentist) forces that had been kept in deep freeze during the Cold War. Thus, several communist leaders (Milosevic certainly not being alone in this respect) have decided to don the nationalist cloak in order to survive politically. This new environment has presented Greece with many problems and risks, but also with new opportunities. In the early years, it tended to exaggerate the former and ignore the
latter.

There have been, of course, real problems. The disintegration of Yugoslavia and the civil war that broke out in several parts of its territory, the breakdown of law and order in Albania, the rapid deterioration of economic conditions in all the former communist countries of the region--all these have had important negative consequences for Greece. Transport links with its trading partners in the EU have suffered badly; illegal immigrants in Greece now represent more than 5 percent of the total population of a country that had been for long a net exporter of people; and the Greek armed forces have had to remain pretty well constantly on alert.

At the same time, the Greek political class--a few notable exceptions apart-- became obsessed with the name of what is still officially called the Former Yugoslav Republic (FYR) of Macedonia, thus confusing irredentism (a real issue for many members of the political class in Skopje) with the name of the new republic. Opportunities for an honorable compromise on the name were lost in the early years, largely because of Greek obduracy. Greece's sensationalist press, aided by a group of professional patriots, succeeded in convincing public opinion that there was a real risk to Greece's territorial integrity. Pursuing a maximalist policy and employing a rhetoric that sounded very Greek to most foreigners, Greece became completely isolated on the issue.

On the other hand, Greece was not always helped by the attitude adopted by its allies and partners. The intervention of Western powers in the region, and more concretely in the former Yugoslavia, has been strongly influenced by short-term considerations, while also reflecting a remarkable lack of understanding of the history and the political realities in this troubled part of the world. Adding insult to injury, Western allies seemed often to be chastising the Greeks for not behaving like Scandinavians--and in the Balkans at that!

Growing awareness of the deadlock created has led to a considerable shift in Greek official attitudes. Greece has thus begun to act as a stabilizing factor in the region, through its participation in the peacekeeping force in Albania, its constructive role in the collective efforts to prevent the escalation of conflict in the former Yugoslavia, its decision to improve relations and engage in regular dialogue with the still "unnamed republic", and, perhaps most importantly, through trade and investment.

Although relatively poor by EU standards, Greece is an economic giant in the region. In money terms, its GDP is now bigger than that of Albania, Bulgaria, Romania, the FYR of Macedonia and the new Yugoslavia put together, even though its population is only one-fifth as large. At current exchange rates, Greek per capita GDP is also approximately four times that of Turkey. Trade with its northern neighbors has grown, despite the economic difficulties experienced by the countries in the region; and Greek investment has also increased rapidly--arguably the most important contribution that Greece can
make to stabilization in the region. Greece's economic and political weight is further strengthened by its membership of both the EU and NATO, as long as the policies pursued by Athens do not diverge widely from those of its partners and allies. This has become increasingly true in recent times. However, difficulties and tensions still occasionally arise, especially regarding relations with Turkey.

Greece is fundamentally a status quo country in a part of the world where the status quo is being challenged from many directions. Worried about the instability on its northern frontier, it also perceives a direct threat to its territorial integrity emanating from Turkey. While this threat may be sometimes exaggerated by the Greeks, it is nonetheless real. The long list of unresolved bilateral issues between Greece and what is formally its NATO ally on the other side of the Aegean Sea, the continuing problem of Cyprus affecting directly both Greece and Turkey, the military build-up on both sides, and the repeated threats of war from Turkish generals and politicians are not figments of the otherwise fertile imagination of the Greeks. Indeed, living with Turkey as a neighbor is by no means a guarantee of an easy and comfortable life for most of the countries sharing a frontier with it. The relatively recent memory of an empire, the large size and strategic position of the country, the serious instability of its political system, coupled with huge internal disparities and the threat of Islamic fundamentalism, the dominant position of the army in domestic politics, and the institutionalization of state violence--all these combine to make Turkey a very difficult country to deal with.

Nobody could, of course, seriously argue that Greece has no share of responsibility for the poor state of relations with its eastern neighbor, and this is regrettable. For Greece has a vested interest in the economic development and political stability of Turkey. The last thing that Greeks should want is a poor and internally divided Turkey, one more vulnerable to the temptation offered by political Islam and military adventures abroad. In this respect, Greece has a common interest with its European and American allies.

Support for Turkey's association with the EU, leading eventually to full membership of the Union, should be entirely consistent with the above objectives. This should receive the full support of Greece, and that has been forthcoming on occasions, although not consistently. Still, Turkey's rapprochement with European institutions is and should be dependent on the fulfillment of certain criteria, including most notably the proper functioning of democratic institutions, the rule of law, the protection of human rights and the respect of minorities. The EU is not a simple common market, nor is it a military alliance in which the emphasis is placed entirely on the defense of frontiers and not at all on the defense of democratic institutions and the rights of citizens. Turkey's democratic record leaves an enormous amount to be desired, which presents European countries with genuine problems. Searching for an optimum combination in the use of the carrot and the stick, they have also realized that the influence they can exert on internal developments in Turkey is rather limited. On this question, European and American attitudes have often diverged. For Washington, Turkey is basically a strategic ally, while for the Europeans it is also an associate and potential partner in what is considered by many as an emerging federation. This fundamentally different perspective is bound to lead sometimes to diverging policies.

For its part, Greece has tended to overplay and misplay the EU card in relations with Turkey. As long as it does not fulfill the economic and political criteria set by the Union, Turkey will not be considered for membership of the EU, irrespective of whether Greece wants it to be or not. Thus Greece's loud objections, mainly intended for domestic consumption, have sometimes served the purpose of providing a fig leaf for some of its European partners who did not want to incur any political or economic cost in their relations with Ankara.

But Greece has gone further, by establishing a link between Greek-Turkish bilateral issues and the resolution of the Cyprus problem on the one hand, and the strengthening of EU relations on the other. The latter includes the granting of EU financial aid to Turkey. Not always succeeding in persuading its partners about the desirability of a second link, Greek governments have had to resort to the use of veto in order to block particular measures or policy statements concerning relations with Turkey. More often than not, these vetoes have had a symbolic rather than a practical significance.

Greek politicians have thus tended to forget an important principle: namely, that vetoes inside the EU can only be used in exceptional circumstances and for short periods--a general rule that should apply even more to small and medium-sized countries. For Greek politicians, playing to the gallery at home has sometimes proved a strong enough incentive to override the cost of isolation in European councils. This may be a high cost for a country that, largely because of geography, needs to rely more on diplomacy than military strength for the defense of its territory. Even worse, this course of action has hardly produced any tangible benefits in relations with Turkey.

In February of this year the Greek government was caught, very much against its own will, in the last episode of Mr. Ocalan's wandering from country to country in search of political refuge, which ended with the arrest of the outlawed Kurdish leader by the Turkish authorities. The leader of the pkk having entered illegally into the country, the government was faced with an almost impossible situation. It tried to steer a middle course between satisfying popular support for the Kurdish cause, a sentiment widely shared in most European countries, and adding yet another problem to bilateral relations with Turkey. It tried to export the problem, as Italy had done before. But the whole operation was badly handled, and the government of Mr. Simitis came out as a loser on both the domestic and the international front.

With a strong perception of an external threat, Greece has looked to EU membership as a means of strengthening its own security, and in this respect, it has been deeply frustrated. The Union's common foreign and security policy is not common, and it still has little to do with security. Rightly or wrongly, most European countries have until now preferred to leave the responsibility for collective actions in this area to the Atlantic Alliance. Furthermore, the majority of EU members have tried to avoid becoming involved in bilateral disputes between Greece and Turkey. Greek appeals to Community solidarity and the arguments based on law and right have not always proved to be sufficiently persuasive. This has undoubtedly added to Greek frustration.

Much as they may wish to do so, EU countries simply cannot afford to stay away from the problems generated by the complex reality of southeastern Europe, be they in Kosovo, Bosnia or Cyprus. The Union has started negotiating with the government in Cyprus on its accession. Cyprus is one of the six countries in the so-called fast track leading to membership of the EU, and arguably it will be able to fulfill the basic criteria for membership more easily than any of the other candidates.

Yet it remains a divided country, and the crucial question is whether early accession to the EU could act as a catalyst for an internal political settlement between the two communities on the island or whether the internal settlement should be considered as a pre-condition for accession. Not surprisingly, the governments in Athens and Nicosia have opted for the former, fearing that if accession were to be made conditional on an internal settlement (i.e., on the willingness of Turkish Cypriots and Turkey to play the game), the accession of Cyprus would risk being written off ad calendas Graecas. This is another important reason why the Union will have to become more directly involved in the search for a viable solution to the problem of this divided island, something that would contribute much to the improvement of Greek-Turkish relations.

Domestic Reforms and External Alliances

Greece has traveled a long distance since the fall of the colonels' dictatorship in 1974. Democracy has been consolidated, and this has been achieved in an extremely peaceful manner. Greek democracy has had its share of demagogues, and public opinion falls prey sometimes to populist rhetoric. This is, of course, not totally unknown in other democracies. It could be argued that, for several years, economic stabilization and much needed structural reforms were sacrificed for the sake of democratic consolidation.

Membership of the European Union has acted as a powerful catalyst for domestic reform/modernization. Adjustment to the requirements of membership of this very unusual club, in which the most advanced democracies and mixed economies of Europe experiment in new forms of pooling of sovereignty, has been difficult and rather painful for Greece. Resistance to change from organized groups proved powerful enough to delay the process of adjustment for many years. The forces of reform/modernization have now taken the upper hand, although there is still much that needs to be done.

Greece does not have the luxury enjoyed by many West European countries for whom external threat has become a rather abstract notion since the disintegration of the Soviet empire. Developments in the Balkans in recent years, coupled with the continuing tension in relations with Turkey, reaching sometimes dangerous peaks, have tended to create a siege mentality in Greek society. In the early 1990s, and to a much lesser extent now, this was cultivated by a group of politicians across the political spectrum who apparently decided to invest in nationalist shares. They were strongly encouraged by a large section of the media. Again, this is, undoubtedly, no Greek monopoly.

In general, Greek diplomacy has experienced difficulties in finding the right combination of the language of might, right and common interests. It has often placed almost exclusive emphasis on what it perceives as right on issues of foreign policy, while not paying enough attention to the need for building coalitions and identifying common interests with other countries. It has failed to appreciate that moralizing in international relations is mostly the privilege of the strong.

For Greece, membership of the EU certainly constitutes the most important element of its domestic and foreign policy. But the country happens to exist in an unstable neighborhood; and no kind of foreign policy can transport it away from that location. Moreover, it will, unfortunately, remain on the frontier of the Union for many years to come, because none of its neighbors is likely to be able to fulfill the criteria for membership for some time. Guarding frontier posts requires continuous vigilance and sang-froid. It also requires skillful diplomacy. Greece needs to act as a stabilizing force in the region.

Relations with the United States suffered for several years as many Greeks were critical of the attitude adopted by the Americans during the period of the dictatorship. The invasion of Cyprus by Turkish forces and the widely held suspicion in Greece that U.S. policymakers tended to favor might over right in the wide range of Greek-Turkish disputes added much to the problem. Greater care for Greek sensitivities shown by American officials in the more recent period, coupled with increasing self-confidence on the Greek side, have gradually contributed to the healing of old wounds. Membership of the EU is not incompatible with active participation in the Atlantic Alliance and a close relationship with the United States. That relationship has a long history and deep roots, including the presence of a sizeable and highly dynamic community of Americans of Greek origin. Greece should always avoid being placed in the position of having to make a choice between the European and the Atlantic dimension.

Greece will need to combine domestic reforms with careful diplomacy abroad. Structural reforms can only succeed if social cohesion is preserved. This will be a difficult task for reformers/modernizers. On the other hand, national interests can only be defended successfully through alliances, formal or ad hoc. It is to be hoped that Greeks have learned a valuable lesson from sometimes bitter experience.

Loukas Tsoukalis is the Venizelos Professor in Contemporary Greek Studies at the European Institute of the London School of Economics.