Andreas Papandreou

Andreas Papandreou
Ανδρέας Παπανδρέου
Papandreou in 1968
Prime Minister of Greece
In office 13 October 1993 – 17 January 1996
President	Konstantinos Karamanlis Kostis Stephanopoulos
Preceded by	Konstantinos Mitsotakis
Succeeded by	Costas Simitis
In office 21 October 1981 – 2 July 1989
President	Konstantinos Karamanlis Christos Sartzetakis
Preceded by	Giorgos Rallis
Succeeded by	Tzannis Tzannetakis
Leader of the Opposition
In office 11 April 1990 – 13 October 1993
Preceded by	Vacant
Succeeded by	Miltiadis Evert
In office 12 October 1989 – 23 November 1989
Preceded by	Konstantinos Mitsotakis
Succeeded by	Vacant
In office 28 November 1977 – 21 October 1981
Preceded by	Giorgos Mavros
Succeeded by	Giorgos Rallis
President of the Panhellenic Socialist Movement
In office 3 September 1974 – 23 June 1996
Preceded by	Position established
Succeeded by	Costas Simitis
Member of the Hellenic Parliament
In office 17 November 1974 – 23 June 1996
In office 16 February 1964 – 21 April 1967
Personal details
Born	Andreas Papandreou (1919-02-05)5 February 1919 Chios, Greece
Died	23 June 1996(1996-06-23) (aged 77) Athens, Greece
Citizenship	Greece United States (formerly)
Political party	Panhellenic Socialist Movement
Spouses	Christina Rasia ​ ​ (m. 1941; div. 1951)​ Margaret Chant-Papandreou ​ ​ (m. 1951; div. 1989)​ Dimitra Liani ​ (m. 1989)​
Children	George Sofia Nikos Andrikos Emilia
Parents	Georgios Papandreou (father) Sofia Mineico (mother)
Alma mater	University of Athens Harvard University
Signature
Website	Andreas G. Papandreou Foundation
Military service
Branch/service	United States Navy

Andreas Georgiou Papandreou (Greek: Ανδρέας Γεωργίου Παπανδρέου, pronounced [anˈðreas papanˈðreu]; 5 February 1919 – 23 June 1996) was a Greek economist, politician, and a dominant figure in Greek politics, known for founding the political party The Panhellenic Socialist Movement (PASOK), which he led from 1974 to 1996. He served three terms as the 3rd and 8th prime minister in the Third Hellenic Republic. His father, Georgios Papandreou, and his son, George Papandreou, have served as prime ministers of Greece.

Papandreou's party win in the 1981 election was a milestone in the political history of Greece, since it was the first time that the elected government had a predominantly socialist political program. Moreover, PASOK was the first non-communist political party in Greek history with a mass-based organization, introducing an unprecedented level of political and social participation in Greek society. The achievements of his first two governments include the official recognition of the leftist and communist resistance groups of the Greek Resistance (EAM/ELAS) against the Axis powers occupation, the establishment of the National Health System and the Supreme Council for Personnel Selection (ASEP), the passage of Law 1264/1982 which secured the right to strike and greatly improved the rights of workers, the constitutional amendment of 1985–1986 which reduced the powers of the indirectly-elected president, the conduct of an assertive and independent Greek foreign policy, the expansion in the power of local governments, many progressive reforms in Greek law, and the granting of permission to the refugees from the Greek Civil War of Greek ethnicity to return home to Greece.

During his tenure as the prime minister of Greece from 1981 to 1989, the financial situation of Greece was worsened by dysfunctional and scandal-infested governments, on average annual inflation of the order of 20%, and large budget deficits (over 10% of GDP). The public debt of Greece as a function of gross domestic product (GDP) almost tripled while the Greek economy remained relatively stagnant, with an average annual increase in GDP of 0.8% over the 1981-1989 period. By the end of Papandreou's tenure, the Greek economy was in a dire condition as it had diverged from the European average and was furthest from the Euro convergence criteria than the other member states, resulting in a reputation nationally and in European circles as that of a `black sheep.'

In a poll conducted by Kathimerini in 2007, 48% of those polled called Papandreou the "most important Greek prime minister". In the same poll, the first four years of Papandreou's government after Metapolitefsi were voted as the best government Greece ever had. More recent polls highlight his government's legacy as the most influential in the history of the third wave of Greek democracy. According to the findings by ENA Institute, 63 per cent of respondents believe that Papandreou played the most pivotal role in shaping Greek politics, while 68 per cent attribute political and financial improvements primarily to the centre.

Early life and career

Papandreou was born on the island of Chios, Greece, the son of Zofia (Sofia) Mineyko (1883–1981) and Greek liberal politician and future prime minister George Papandreou. His maternal grandfather was Polish-Lithuanian-born public figure Zygmunt Mineyko, and his maternal grandmother was Greek. Before university, he attended Athens College, a private school in Greece. He attended the National and Kapodistrian University of Athens from 1937 until 1938 when, during the totalitarian dictatorship led by Ioannis Metaxas, he was arrested for purported Trotskyism. Following representation in court by his father, Papandreou gained an exit visa through family connections, and once he arrived in New York, he asked for political asylum based on the imprisonment by the Metaxas regime.

In 1943, Papandreou received a PhD degree in economics from Harvard University under the thesis advisor William L. Crum. Immediately after earning his doctorate, Papandreou joined America's war effort and volunteered to serve in the US Navy; after his basic training in the Great Lakes Naval Training in Illinois, he spent 15 weeks to qualify as a hospital corpsman at the Bethesda Naval Hospital. Papandreou's skills in maths were recognized by an American admiral who placed him in a statistical control unit planning the Okinawa invasion. He returned to Harvard in 1946 and served as a student advisor until 1947, when he received an assistant professorship at the University of Minnesota. Papandreou became a visiting professor at Northwestern University for 1950-1951, and in 1956, he accepted a tenured teaching position at the University of California, Berkeley (where he became chair of the Department of Economics later on). While in exile, Papandreou worked at Stockholm University for a year and then at York University in Toronto until 1974, where he worked alongside long-term academic advisor Christos Paraskevopoulos.

Personal life & family

He was married to Christina Rasia from 1941 to 1951. In 1948, he entered into a relationship with University of Minnesota journalism student Margaret Chant. After Chant obtained a divorce, and after his divorce from his first wife Christina Rasia, Papandreou and Chant were married in 1951. They had three sons and a daughter. Papandreou also had, with Swedish actress and TV presenter Ragna Nyblom, a daughter out of wedlock, Emilia Nyblom, who was born in 1969 in Sweden. Papandreou divorced his second wife Margaret Chant-Papandreou in 1989, and married Dimitra Liani who was 37 years his junior.

Papandreou died on 23 June 1996. The government declared 4 days of national mourning, and at his funeral procession producing crowds of "hundreds of thousands" to bid farewell to Andreas. His will generated much discussion because he left everything to his 41-year-old third wife. He left nothing to his second wife, to whom he was married for 38 years, their four children, or his illegitimate Swedish daughter.

Theodore Katsanevas

Until their divorce in 2000, Papandreou's daughter Sofia was married to the academic and politician Theodore Katsanevas. In Papandreou's will, he accused Katsanevas of being a "disgrace to the family" (Greek: όνειδος της οικογένειας) and claimed that "his aim was to politically inherit the history of struggle of Georgios Papandreou and Andreas Papandreou".

Political career

Greek politics before Andreas Papandreou

Further information: National Schism, Axis occupation of Greece, Cold War, Greek Civil War, and Greek economic miracle

Greece was recovering from the Axis occupation in World War II and immediate 1944-49 civil war (between the Communist-led uprising against the establishment led by the King). The latter dominated the political dialogue in the following decades; the underlying question was how power basis swifts from the Right (victors of the civil war) to the Center. Political stability in Greece was balanced with the support of three factions: the King along with the military forces, the Americans, and the political establishment. The political institutions of the restored Kingdom of Greece were fragile due to military (often pro-royal) interventions preventing democratically elected parliaments from executing their campaign promises; the root of these disputes was the constitutional crisis by the disagreement between Eleftherios Venizelos and King Constantine I on the entry of Greece in World War I with the Allies, and resulted in the National Schism with the expulsion of the King and the creation of the short-lived Second Hellenic Republic (1924-1935). Overall, militarized politics was always a danger since Greece had eight military coups since World War I. The Greek economy was small, but rapidly growing due to American aid from the Marshall Plan (in total approximately 3.75 billion US dollars, half of which were military supplies; for comparison Greece's GDP was 4.34 billion US dollars in 1960) as Americans feared that the poor economic conditions would make Greece susceptible to Communist rhetoric. Moreover, Americans recognized the strategic significance of Greece's location in the Eastern Mediterranean by constructing four military bases in Greece and had close ties with the Greek military. Greece entered NATO in 1952, and became associate member of European Economic Community (EEC) in 1962. The politicians often acted between the King and the Americans.

Pre-Junta era (1959-1967)

Further information: Apostasia of 1965 and Cyprus dispute

Andreas Papandreou started his career as an economic professor, first in Minneapolis and then in Berkley, and achieved considerable fame in his field. While he was chair of the department at Berkley, he was pressured by his father to return to Greece to groom him as his successor Andreas Papandreou initially resisted his father's requests. However, he eventually returned to Greece in 1959, where he headed an economic development research program by invitation of Prime Minister Konstantinos Karamanlis. In 1960, he was appointed chairman of the board of directors, general director of the Athens Economic Research Center, and advisor to the Bank of Greece. He also received funding from the Ford and Rockefeller foundations to promote projects aligned to liberal internationalism; initially American officials hoped that Andreas Papandreou would be a stabilizing force in Greek politics. However, Andreas Papandreou started to develop a political ideology, heavily influenced by the American progressive liberalism from his years in the US, to secure the support of non-communist left-leaning Greek voting blocks as he considered the only way to assist his father in becoming Prime Minister. In this ideology, the King, the armed forces, and the Americans are described as having "vested interests" that are not in the best interests of the Greek people, and he was calling for social and economic modernization through a mass-based political party. Progressively, Andreas Papandreou ideologically moved away from progressive liberalism and adopted a populism stance.

In the elections of 1963, his father, George Papandreou, head of the Center Union, became prime minister of Greece, and his son became chief economic advisor. In the following year, Andreas Papandreou renounced his American citizenship and was elected to the Greek Parliament in the 1964 Greek legislative election. He immediately became Minister to the Prime Minister (in effect, assistant Prime Minister) and the leader of the left wing of the party. The rapid ascension of Andreas Papandreou by his father created displeasure among members of the Center Union party, particularly Constantine Mitsotakis, who were promoted through rank and file. In 1965, Mitsotakis raised the nepotism concerns in a newspaper interview, stating: 'leadership... is neither bestowed nor is it inherited'. The discontent of the members of the Center Union party increased as Andreas Papandreou's influence was such that his father started to ignore his own Cabinet on critical political decisions.

Both Papandreou advocated for the liberalization of Greek society, which was rapidly urbanizing, resulting in large salary increases for police, judges, and teachers. However, seeds of resentment towards both Papandreous from the military grew as they were excluded from salary increases. Moreover, the Papandreous made a faint attempt to gain control of the military, which alarmed many officers without weakening them. The latter created friction with the King, who wanted to be in command of the army and not the elected government. Papandreou's government also released all the political prisoners as a first step towards healing wounds from the civil war.

In foreign policy, Andreas Papandreou criticized the presence of American military and intelligence in Greece by describing Greece as a colony of the United States and publicly taking a neutral stand in Cold War. Papandreou rhetoric intensified after his father's visit as Prime Minister to Washington with President Johnson in July 1964 to discuss the Cyprus dispute, particularly his interview on Le Monde on 4 October 1964 was politically turbulent, resulting in the sudden but temporary resignation of Andreas Papandreou. Andreas' public attacks against the King and the Americans greatly disturbed the political balance. The conservatives feared that Andreas was a secret Communist, leading them to another civil war. The US embassy officials, sensitive to these public attacks during the Cold War, and his father (and as Prime Minister) repeatedly requested Andreas tone down his emotive rhetoric. Despite promises that he would do so, Andreas continued actively campaigning, further deepening divisions and prolonging the political instability in the pre-1967 coup period. A few weeks before the coup, his father apologized to the US ambassador that his son "would like nothing better than to be arrested" as he would "relish the role of martyr," adding that if he were not his son, then he would have been expelled from Center Union. Andreas Papandreou increasingly became the target of ultra-rightists who feared that following any new elections, which the nearly 80-year-old Georgios Papandreou would likely win, his son would be the real focus of power in the party.

In 1965, while the "Aspida" conspiracy within the Hellenic Army (alleged by the political opposition to involving Andreas personally) was being investigated, Georgios Papandreou decided to remove the defense minister and assume the post himself to protect his son from investigations. The King, Constantine II of Greece, refused to endorse this move since this would create a conflict of interest, which forced George Papandreou's resignation; the events following this became known as the Apostasia of 1965. For the next twenty-two months, there was no elected government, and hundreds of demonstrations took place, with many being injured and killed in clashes with the police. The King tried to lure members of the Center Union party to his side and form a temporary government. He succeeded in bringing 45 members to his side, who later were called 'apostates,' and the most prominent was Mitsotakis. To end the political deadlock, his father attempted a more moderate approach with the King, but Andreas Papandreou publicly rejected his father's effort and attacked the whole establishment, attracting the support of 41 members of the Center Union in an effort designed to gain the party's leadership. With the politicians unable to sort out their differences, rumors of a military coup intensified, and before the next election took place (scheduled for 28 May 1967) and potentially both Papandreou returned to power, anti-Communist Colonels led the coup d'état of 21 April 1967.

Junta and exile (1967-1974)

Further information: Greek junta and Turkish invasion of Cyprus

Andreas Papandreou in 1968.

When the Regime of the Colonels led by Georgios Papadopoulos seized power in April 1967, Andreas Papandreou was captured and charged with treason. Not only did the junta revile Andreas Papandreou as a threat, but also his political opponents and former allies, including his own father, as the man chiefly responsible for the collapse of Greek democracy. Soon after, Gust Avrakotos, a Greek-American Central Intelligence Agency (CIA) case officer assigned to Athens, told the Colonels that the U.S. Government wished for Papandreou to be released and allowed to leave the country with his family. Avrakotos violated his orders, however, and unofficially advised the Colonels to "Shoot the motherfucker because he's going to come back to haunt you." Under heavy pressure from American officials and academics, such as John Kenneth Galbraith, a friend of Andreas since their Harvard days, the military regime released Andreas on Christmas day 1967 on condition that he leave the country. Papandreou then moved to Sweden with his wife, four children, and mother, where he accepted a post for one year at Stockholm University. Afterward, he moved to University of Toronto, where he stayed until 1974.

Andreas Papandreou in an anti-dictatorial rally, Netherlands, 1968.

In exile, Andreas was a political pariah and excluded from political forces to restore democracy in Greece. In the beginning, he actively campaigned, relying on his American network for a US intervention to bring down the junta, but then changed his mind and favored military resistance. Papandreou publicly accused the CIA of being responsible for the 1967 coup and became increasingly critical of the US administration, often stating that Greece was a US "colony" and a Cold War "garrison state". In 1968, Andreas Papandreou formed an anti-dictatorship organization, the Panhellenic Liberation Movement (PAK), which sought to 'violently overthrow' the military regime. Reacting to the creation of PAK, his father added: "Political leaders do not head up conspiratorial organizations" and urged his son to work within the Central Union party. George Papandreou, who was under house arrest since the coup and already at an advanced age, died in 1968; Andreas Papandreou was not allowed by the junta regime to attend his father's funeral. In the early 1970s, during the latter phase of the dictatorship in Greece, Andreas Papandreou opposed the process of political normalization attempted by Georgios Papadopoulos and his appointed Prime Minister, Spyros Markezinis. Overall, Papandreou's rhetoric found little response in Greece and whose activities contributed little to the downfall of the junta, which in effect collapsed because of the poor handling of the events leading to the Turkish invasion of Cyprus in July 1974.

Return to Greece, Restoration of democracy (1974-1981)

Further information: Metapolitefsi, PASOK, and European Union

We are announcing today the inauguration of a new political movement, a movement which we believe represents the desires of and needs of the average Greek: the farmer, the worker, the craftsman, the salaried worker, and our courageous and enlightened youth. The movement belongs to them, and we will call on every exploited Greek to strengthen our ranks, to form cadres and participate in the molding of the movement in order to promote our national independence, popular sovereignty, social liberation, and democracy in all phases of public life.

—Papandreou announcing the creation of the Panhellenic Socialist Movement on 3 September 1974.

The logo of PASOK in the elections of 1981.

Papandreou returned to Greece after the fall of the junta in 1974, during metapolitefsi. The dominant and leading political figure in Greece was Karamanlis with his new political party New Democracy, while Papandreou continued to have the stigma of past events. On 6 August 1974, Andreas Papandreou dissolved PAK in Winterthur, Switzerland, without announcing it publicly. He was offered the leadership of his father's old party, which had evolved into Centre Union – New Forces. However, he turned it down by rejecting his father's ideological heritage as a Venizelist liberal, declaring himself a democratic socialist. Instead, he formed a new 'radical' party, the Panhellenic Socialist Movement (PASOK) on 3 September 1974. Most of his former PAK companions, as well as members of other leftist groups such as the Democratic Defense joined the new party. The founding charter of PASOK advocated social liberation, a radical re-orientation of the country's foreign policy, Greek withdrawal from NATO, the closure of the US military bases, and rejection of the option of membership of the EEC, which was dismissed as a capitalist club. In 1974 elections, PASOK received 13.5% of the vote.

A new Constitution, adopted by Parliament and promulgated on 11 June 1975, established a parliamentary democracy with a president as head of state. In the new constitution, the majority of powers resided upon the Prime Minister, with the President having sufficient powers to guard the constitution. Papandreou boycotted the promulgation of the constitution and publicly described it as "totalitarian," advocating instead for a "socialist" constitution without explaining what he meant. Papandreou's attacks sharpened upon the initiation of talks for entry of Greece into EEC, accusing the politicians and the democratic institutions of Greece of "national betrayal."

Andreas Papandreou was able to salvage his political career by doubling down on his polarizing pre-junta-developed ideology by combining it with nationalist elements, which was assisted by three major events. First, the US interactions with the junta after the coup and the Turkish invasion of Cyprus reinforced in the imagination of the Greek populace the conspiratorial involvement of the US in the Colonels' junta, and thus, Andreas Papandreou depicted himself and his father as victims of larger forces. Second, the oil crisis in 1973 and 1979 deeply affected the Greek economy, and the inability of Karamanlis' governments after the democratic restoration to address the rising economic problems further increased the frustration of the Greek population. Third, Karamanlis, the dominant political figure in bringing democracy back to Greece, became President of Greece in 1980, leaving a power vacuum in the upcoming elections of 1981. PASOK's main slogan was Allagí ("Αλλαγή", meaning "change"), and the changes (some unrealistic) promised by Andreas resonated with the Greek people, who sought a break from the failed politics of the past. In 1977 elections, PASOK received 25.3% of the vote, doubling in size from 1974, and Papandreou became leader of the opposition.

The radical and uncompromising positions (mostly anti-American, anti-NATO, and anti-EEC) of Andreas Papandreou, along with his rising popularity, renewed fears of another military coup in the Right and Greece's allies. After the 1977 elections, Karamanlis toured the European capitals, urging for Greece's quicker entry into EEC as this may reduce the temptation for military intervention if Papandreou implements his promises once in power. Foreign leaders agreed with Karamanlis on a plan for Greece's entry to EEC. Papandreou started to soften his tone without abandoning his initial positions. Specifically, he called for a referendum regarding the entry to EEC after 1977 as he was trying to win over the crucial share of the vote from the centrist Union of the Democratic Centre (EDIK) after its disintegration from its performance in the elections of 1977, and the entry to EEC was becoming positively popular among the Greeks. Papandreou frequently stated in his campaigns prior 1981 elections regarding the entry to EEC:

"PASOK believes that the crucial matter of our accession to the EEC cannot be decided without a referendum."

However, placing the entry to EEC in a referendum was impossible since only the President can do this according to the Greek constitution of 1975 and Karamanlis, as President, would not have permitted this. Legislation to ratify the entry to EEC was passed in the Greek Parliament on 28 June 1979, with PASOK and the Communist party leaving the chamber. Greece entered the EEC as its tenth member in January 1981, and in the eyes of allies, Karamanlis, as President, would act as a restraining factor on radical departures in foreign and domestic affairs. In the elections of October 1981, Papandreou won by a landslide with 48.1% of the vote.

Leading the "Change" (1981-85)

Our basic target is a self-sufficient economic and social development, using all the productive forces in combination with a fairer distribution of the national income and wealth... We seek the gradual reform of the structures of the economy so that the basic economic choices are made by the society as a whole. The strategic sectors of the economy must come under substantial social control without overlooking the positive role of private initiative. The crisis in the capitalist system on a world scale, with ever-increasing unemployment and inflation, intensified international competition, the increase in the degree of concentration and the monopolistic structure of many branches, have made the traditional means of economic policy ineffective.

—Papandreou, in his first appearance in the Greek Parliament as the prime minister on 22 November 1981.

At the 1981 elections, PASOK won a landslide victory over the conservative New Democracy party, and Papandreou became Greece's first socialist prime minister. It was a milestone in the political history of Greece because PASOK was the first non-communist political party with a mass-based organization, introducing an unprecedented level of political and social participation in Greek society. PASOK's supporters were thrilled by the election victory and the proclamation of a brand new kind of government, while many conservatives feared the uncertain future if Papandreou's radical positions materialize. However, these feelings dissipated by the end of the first administration because Papandreou made considerable U-turns and followed a more conventional approach, either by choice or by dysfunctional government incapable of undertaking the dramatic transformation it had promised. In his first administration, Papandreou enacted essential pieces of social legislation that were overdue since many laws had roots in the pre-junta era and were not in line with the new Greek constitution of 1975 and with the Greek society that was becoming more liberal.

Fiscal measures and EEC

Andreas Papandreou in Athens European Council - 1983. (1st row L-R) Bettino Craxi, Wilfried Martens, Gaston Thorn, Margaret Thatcher, François Mitterrand, Andreas Papandreou, and Helmut Kohl.

Papandreou abandoned his campaign promise of placing Greece's entry to the EEC in the referendum and instead submitted a memorandum to the EEC with a list of demands in March 1982. The memorandum effectively pleaded for special treatment and financial support based on Greece's "peculiarities." EEC delayed its response until after the date at which Greece could opt out of her entry into the EEC and then rejected the Greek memorandum in March 1983. However, EEC promised support via the newly created "Integrated Mediterranean Programs," and Papandreou declared victory. Greece started to become more dependent on the EEC funding, and by 1989, the EEC's support had reached 4.5% of Greece's GDP. In March 1985, Papandreou stated that Greece would remain in EEC for the foreseeable future because "the cost of leaving would be much higher than the cost of staying"; there was little reaction from PASOK members.

In domestic affairs, Papandreou's government immediately carried out a series of wealth redistribution policies upon coming into office that immediately increased the availability of entitlement aid to the unemployed and lower wage earners. Public spending on pensions nearly doubled from 5.8% in 1980 to 10.7% in 1985, manufacturing jobs had an increase in salary of 10%, and minimum wage increased by 32% overnight in 1982. The government made credit more accessible, provided a variety of handouts to various groups, and introduced a wage indexation system protecting (particularly low) wage earners' salaries from the erosion of high inflation, which was around 20% in the early 80s. Changes were made to labor laws, which, until 1984, made it difficult for employers to make workers redundant. A number of other reforms were carried out in areas such as the protection of union and protest rights.

Greek debt over GDP (%) in 1974-2000 period. The colored regions approximately highlight the prime minister's reigns; for 1989-1990, there was no stable government due to Papandreou's change in electoral law. In 1981, Papandreou changed the course of the economy by making it more dependable on foreign borrowing. The dataset is from the International Monetary Fund website [1].

The pro-worker policies and Papandreou's failure to address the rising structural issues (limited growth and high inflation) in the Greek economy at a time when the capital was moving out of Europe in the early 80s placed additional pressure on the companies in Greece; Papandreou's anti-capital rhetoric was not helping to secure foreign investments. Companies in Greece already had competitiveness issues and diminished profits due to the oil crisis in the 70s, and they were now exposed to European competition. Several multi-national companies left Greece, such as Esso, Ethyl, Pirelli, and Goodyear. Shipyards and associated industries employing thousands of workers shuttered. Companies not already bankrupted encouraged early retirement, further burdening the Greek state, which had to assist the insurance funds. In 1983, PASOK nationalized companies over a wide range of industries ranging from textiles, consumer goods, metallurgy, and mining by establishing a restructuring business agency, "Industrial Reconstruction Organisation." The companies under this organization continued to operate at a loss. Among these companies were the munitions company Pyrkal, Heracles General Cement company, and the textile corporation Peiraiki-Patraiki. Greek agricul­ture also encountered considerable obstacles in the EEC market. As a result, the former trade surplus in agricultural products turned into a deficit from 1986 onwards. Part of the problem was that Papandreou artificially increased the salaries, resulting in farmers importing agricultural products while theirs remained in fields uncollected due to the absence of cheap labor; this issue was partially resolved with cheap labor from the Balkans after the fall of Soviet Union in 1989. Papandreou recognized the lack of productivity and increased trade deficits, admitting that "we consume more than we produce."

The size of this nationalization endeavor brought the Bank of Greece, which effectively converted the private debt of these companies into public debt and effectively burdening the average taxpayer, to the brink of collapse. Moreover, it increased public spending substantially during Papandreou's first term in office from 40.6% in 1980 to 55.5% in 1985. The deindustrialization and the global recession led to the Greek economy shrinking by -1.55% in 1981, -1.13% in 1982, and -1.08% in 1983. Recovery started once EEC support arrived in Greece. Still, growth was anemic due to his government's inability to effectively utilize this financial support to improve the economy, mainly due to corruption and clientism. Papandreou was burdening the Greek state by rewarding his loyal supporters with public service jobs to build a patronage network. The lack of economic growth and investments, as well as high inflation, increased unemployment from 2.8% in 1980 to approximately 8% by the end of Papandreou's first administration; this economic condition is known as stagflation. Papandreou did not introduce progressive tax reform and instead used foreign loans to address the increasing budget deficits due to his policies. As the foreign debt increased, so did the external debt interest payments from 2.5% of GDP in 1980 to 5.4 in 1986, more than defense and education combined in his second administration.

Foreign policy, NATO, Turkey

Further information: NATO

Despite Papandreou's promise to remove United States troops and military bases from Greece immediately once in power, Greece remained firmly committed to the NATO alliance. However, Papandreou's frequent statements antagonizing the Western allies made Greece more isolated and vulnerable, and they were not helping solve the Cyprus question. A notable example was in September 1983, when Papandreou vetoed a formal European Community statement condemning the Soviet government for shooting down the Korean airliner KAL Flight 007, asserting that it was a plane spying for the benefit of the United States, and he added that 'if such a plane came into Greece, we would have downed it.' Papandreou's siding with the Soviet position effectively eliminated any possibility of visiting the White House (Reagan administration) to advance Greek national interests in the foreseeable future. Most thorny issues were resolved behind closed doors with Monteagle Stearns and Robert V. Keeley, who were experienced with the Greek issues. When Papandreou publicly stated, "For us, the idea of having foreign bases on our soil is unacceptable since we do not believe in the competition between the two superpowers and Europe's division," his government was quietly renegotiating the stay of the US bases. In the final agreement signed in 1983, all four bases that existed since 1952 continued on Greek soil for five more years with some additional military assistance but failed to get any guarantees against Turkish aggression. Papandreou called the agreement "a Greek triumph" and a "treaty ... that could have never been signed by the Americans if they faced a [Greek] government on its knees that would tell them 'we are with you, we want the bases, etc.'" Specifically, Papandreou touted that there was a provision for the removal of the US bases upon the end of the five-year term in 1988, that for the first time Greece could restrict the use of foreign bases according to its interests, and the United States pledged to provide military assistance based on the 7/10 ratio between Greece and Turkey. All these statements were inaccurate, but the treaty agreement documents were kept away from the public for nearly two months to sideline the opposition. Afterward, it was revealed that the agreement was nearly identical to his predecessor beyond minor symbolic concessions.

Papandreou often utilized foreign policy by exaggerating the (real or not) national dangers to distract from the domestic economic situation, i.e., high inflation affecting the voters in cities. In the summer of 1982, Papandreou responded to bank employees' general strike "to take into consideration the crucial international crisis facing the nation." Later on, PASOK's poor performance in the municipal elections of 1982 prompted Papandreou to make appearances near Greece's borders as if the country was about to be under attack and appealed to Greek citizens living in the cities to "understand that the main issue that the country is facing is at this moment is defending national integrity."

Education

After the fall of the junta, education needed long-overdue reforms. The Minister of Education Georgios Rallis from New Democracy implemented Georgios Papandreou's 1964 education reforms, which the junta had reversed. Specifically, the changes included the extension of compulsory education from 6 to 9 years, abolished the use of katharevousa (an archaic version of Greek) as the official language of educational institutions, replacing it with the demotic of everyday speech, the separation of junior and senior high schools, and the introduction of vocational education.

In 1981, Papandreou continued the educational reforms. The Greek language was further simplified with the adoption of the single accent system ("monotoniko", μονοτονικό). Exams required for entry to senior high school (Lyceum) were abolished to improve access to working-class students. Ancient Greek literature were taught in modern translation rather than the original. Social and political studies students are not required to know classical languages to enter university. School uniforms were abolished in public schools. Students were exposed to democratic political processes through forming student committees, new social science and history subjects, and establishing the annual celebration of the Athens Polytechnic uprising. Papandreou also abolished the function of school inspectors, and the powers of headmasters and headmistresses were diminished, with teachers' committees taking more responsibilities. The university administration was also democratized, with its governance done by academic staff and student representative committees. The university system was expanded, with the number of students doubling between 1981 and 1986, while the system was reorganized to give the departments more power and permit more significant participation in their management. The effect of these reforms was, however, limited by poor research facilities, a shortage of qualified teaching staff, a lack of resources, and often inefficient administration.

Social reforms

During its time in office, Papandreou's government carried through sweeping reforms of social policy through measures such as the introduction of a welfare state, significantly expanding welfare measures, and funding social establishments for the elderly. Rural areas benefited from improved state services, new rights for workers were introduced, and refugees from the Civil War living in exile were allowed to return with impunity. He also officially recognized the role of leftist partisan groups in the Greek Resistance during the Axis Occupation. The first law recognizing the Greek Resistance was passed in 1949, excluding partisan groups that fought against the Greek State in the Greek Civil War (A.N. 971) In 1982 his government passed the 1285 law that abolished this exception.

A more progressive taxation scheme was introduced and budgetary support for artistic and cultural programmes was increased. The role of OAED in vocational guidance and training was also strengthened. Saturday working was also abolished for certain groups of workers.

In a move strongly opposed by the Church of Greece, Papandreou introduced, for the first time in Greece, the process of civil marriage. Prior to the establishment of civil marriages in Greece, the only legally recognized marriages were conducted in the Church of Greece. Couples seeking a civil marriage had to get married outside Greece, generally in Italy. Under PASOK, the Greek State also appropriated real estate properties previously owned by the Church.

A major part of Papandreou's allagi ("change") involved driving out the "old families" (tzákia, literally "hearths", using the traditional Greek expression for the genealogy of families), which dominated Greek politics and economy and belonged to the traditional Greek right.

Health and welfare

Health care coverage was expanded through the establishment of the "National Health System," which made modern medical procedures available in rural areas for the first time), while state-subsidized tourism (social tourism) for lower-income families was promoted and pensions index-linked. Early retirement was extended to more occupations, and low-income households received housing allowances. Subsidies for returning Greek migrants were also introduced.

Social aid became available to deaf and dumb adults as well as for persons with mental disabilities, minimum pensions were indexed to the minimum wage, a social assistance pension for those aged 68 and over was introduced and, according to one study, "All uninsured employed and self-employed individuals are covered by IKA (social insurance fund)." Social security benefits were also adjusted to price increases, while social assistance disability benefits were extended to more people. Special family allowances were established for certain groups of people, while wages and pensions became automatically adjusted in line with the consumer price index every 4 months on the basis of economic forecasts. A national system against unemployment was set up that granted benefits to young people and elderly unemployed persons. In addition, Law 1545/85 extended unemployed benefit duration for certain groups of people while relaxing entitlement to unemployment benefit.

Elevation of women and their inclusion in the economy

As part of Papandreou's "Social Contract", new liberalising laws were introduced which decriminalised adultery, abolished (in theory) the dowry system, eased the process for obtaining a divorce, and enhanced the legal status of women.

In 1982, Greece ratified the ILO Convention on maternal job protection. According to Act No. 1302/1982, 12 weeks of job-protected maternity leave was provided, which included 6 weeks of post-natal leave. The maternity leave payment represented 66% of earnings. In 1984, maternity leave was extended to 14 weeks, with 7 weeks before and 7 after childbirth. That same year 3 months of unpaid job-protected parental leave for each parent were introduced, which was available until the child was aged 2.5 years. Other major policy changes included the establishment of parental leave for both parents and child care centres, maternity allowances, community health centres, and the encouragement of women to join agricultural cooperatives as full members, an option which previously had not been open to women.

All women with unmarried children under 21 were given the right to retire at 55, and in 1984 women were guaranteed equal pay for equal work.

Constitutional crisis of 1985 and elections

Presidents of the Hellenic Republic, Konstantinos Karamanlis (left) and Christos Sartzetakis (right).

On 6 March 1985, New Democracy announced that they would support Karamanlis' second term for the Presidency, and on the same day, the Communist party (KKE) declared that they would put forward their own candidate. The press anticipated that Papandreou would also support Karamanlis, since he had assured Karamanlis his support in person. However, Papandreou changed his mind at the last moment, siding with the left wing of PASOK, which did not want Karamanlis, and instead backed Christos Sartzetakis (a Supreme Court of Greece judge known his case of the assassination of Grigoris Lambrakis and viewed favorably by the left, and a protagonist in the 1969 movie "Z"), surprising some of his ministers, much of the rank-and-file of his party, and even Sartzetakis himself who was not counseled in advance. Later on, it was revealed that the spontaneous change of mind was to camouflage Papandreou's long-making constitutional designs since Sartzetakis not only knew well in advance but also there had been two more judicial figures who rejected Papandreou's offer. At the same time, Papandreou announced plans for constitutional reform, and he argued that it would be illogical for Karamanlis to preside over any constitution reform since much of the constitution of 1974 was heavily influenced by Karamanlis. Papandreou's proposals were designed to ease future changes to the constitution and reduce the powers of the President, e.g., the right to call elections, appoint a government, dissolve Parliament, and on important national questions to call referendums. While the former was eventually abandoned, the latter was considered "unnecessary" by scholars since no president (Konstantinos Tsatsos 1975-1980, Karamanlis 1980-1985) had utilized these powers in the course of the Third Hellenic Republic by the time Papandreou raised the issue. Moreover, these changes would make the Prime Minister the most powerful ("autocratic") position in the Greek state, sparking fears of prolonged political instability. Papandreou informed Karamanlis of his decision via his deputy, Antonios Livanis, as he could not bring himself to do so in person. Karamanlis resigned from the Presidency on 10 March 1985, two weeks before the termination of his term, and was replaced by a PASOK's deputy, Ioannis Alevras, as acting president. This course of action divided constitutional scholars on whether the acting President could vote for president; in the end, the parliament took the decision, with New Democracy deputies leaving the chamber.

According to the Constitution of 1975, up to three rounds of the parliamentary vote were permitted for presidential candidates; the first two rounds required more than 200 votes out of 300, and in the third round, 180 votes out of 300. If all three rounds of vote failed, then new elections would be held. Papandreou could only rely upon approximately 164 deputies (he had expelled six of them for criticizing him since 1981), 13 from KKE, and five independent (about 182). The first two rounds failed to elect Sartzetakis for president, which was done under high political tension. At one point, a deputy of New Democracy momentarily grabbed the ballot box. Mitsotakis accused Papandreou of violating constitutional protocol, which required a secret vote, by forcing his deputies to cast their vote with colored ballots, but Mitsotakis was dismissed. Mitsotakis and Papandreou ended up having an oral confrontation, with Mitsotakis showing how Papandreou had no respect for the parliament, and Papandreou firing back that Mitsotakis is the last person to speak about respect invoking memories from the Apostasia of 1965.

In the third round, Sartzetakis was voted president with a decisive vote from Alevras since Papandreou had two more defected deputies, who Papandreou accused of taking bribes from Mitsotakis' party. Papandreou also immediately formally submitted the proposals for constitutional amendments by adding to the previous one the removal of a secret parliamentary vote for president. Mitsotakis considered the vote illegal and claimed that if they won the elections, Sartzetakis would not be president, further deepening the constitutional crisis. Both parties continued their polarized confrontations with the elections of June 1985. Just before the elections, Karamanlis broke his silence and urged the Greeks to be cautious with their vote (without explicitly advising who to vote), commenting that PASOK had brought "confusion and uncertainty," but his statement was not broadcast by the state media (TV and radio). Papandreou was re-elected in the 1985 Greek legislative election with 45.82% of the vote. Papandreou' gamble worked to his benefit because he gained more from far-left voting blocks than the voters lost from the center. After the election results, Mitsotakis accepted Sartzetakis as president and the head of the state. Papandreou's constitutional proposals took effect in 1986.

Stabilization effort & Disillusionment (1985-89)

A traditional cafe (kafenio) in a Greek village in 1986. A poster of Andreas Papandreou is in the background.

Papandreou began his second administration with a comfortable majority in the parliament and increased powers based on the 1986 Greek Constitution. However, his premiership was soon surrounded by numerous scandals and controversial foreign policy decisions while the Greek economy rapidly deteriorated. The retired Karamanlis publicly described the situation at the end of Papandreou's second administration as: "A boundless lunatic asylum," while others refer to the events surrounding 1989 as "dirty 89".

Failed stabilization of the economy

Further information: Euro convergence criteria

Greek inflation (%) in 1974-2000 period. The colored regions approximately highlight the prime minister's reigns; for 1989-1990, there was no stable government due to Papandreou's change in electoral law. In 1987, Papandreou abandoned the austerity measures (the dotted line estimates inflation if he had not) and delayed the convergence of the Greek economy with EEC criteria by more than four years. The 1980-2000 dataset is from the International Monetary Fund website [2], the 1974-1979 dataset is from AMECO Database [3].

In 1985, Papandreou's government applied to EEC for a $1.75 billion loan to deal with the widening foreign trade deficit (8.7% of GDP). However, the EEC imposed the implementation of a package of economic stabilization measures as a precondition for the loan. The stabilization package, implemented by Costas Simitis as minister of Finance, included a 15% devaluation of the Greek currency (drachma), posed limits on government borrowing, and monetary policy became more strict, wages ceased to follow inflation, some tax exemptions were eliminated, effectively the incomes dropped to pre-1980 levels. Papandreou touted the loan as a life savior for the economy of Greece because if they had not, then the International Monetary Fund (IMF) would have imposed much more strict and severe austerity measures. Moreover, Greece signed the Single European Act in February 1986, which required the member states to deregulate and reduce state intervention in economic life for the formation of a single EEC market by 1992. Simitis' policies had the intended outcome, with the inflation reduced from 23.01% in 1986 to 13.5% in 1988, and the Public Sector Borrowing Requirement fell from approximately 18% of GDP in 1985 to 13% of GDP in 1987. However, Papandreou was shaken by a widespread backlash with long-running strikes and demonstrations by farmers and major unions in early 1987. With the elections approaching, Papandreou forced Simitis to resign from his ministerial position in November 1987, and the reforms were abandoned or even reversed, effectively violating the loan agreement. One day before the upcoming elections and as scandals were closing in, Papandreou's populism reached new heights, when on a balcony, surrounded by a crowd that gathered to watch him, gave a public command to the Minister of Finance Dimitris Tsovolas to "give it all [to them]" ("Τσοβόλα δώσ'τα όλα") and "Tsovolas, empty the coffers [of the state]," and the crowd chanted these back. Later on, Papandreou claimed that he was merely joking, but this event became an infamous moment of the era.

Greece started to fall last in terms of convergence with EEC goals, economic competitiveness, dependence on EEC and state subsidies, investment, inflation, and growth. After eight years of Papandreou's rule, the Greek economy was in dire condition with a reputation nationally and in European circles as that of 'black sheep.' Specifically, the economy was burdened by debt that had nearly tripled in size (from 26.7% of GDP in 1981 to 73.3% of GDP in 1990), high inflation rates (ranging between 13% and 23% from 1981 to 1989), rising unemployment (4% in 1981 and reached 8% in 1988), chronic primary budget deficits, and large government expenditures some intended to keep failed companies afloat. This was also reflected in March 1992, when the EEC Monetary Committee produced a report sharply criticizing the Greek government's economic performance and misuse of EU funds.

Reapprochment with Turkey

Further information: 1987 Aegean crisis

Davos World Economic Forum Annual Meeting 1988 - Handshake between Prime Ministers Andreas Papandreou and Turgut Özal.

Greece and Turkey nearly entered into war over a series of miscommunications in late March 1987; Turkey learned that Greece was about to initiate exploration for the drilling oil in the Aegean Sea near Thasos, a Greek island on the north Aegean. In response, the Turkish survey ship Piri Reis (and later the RV MTA Sismik 1) was sent to the area with an escort of Turkish warships. Papandreou threatened to sink any Turkish ship found in Greek waters. Turkey’s reaction was exaggerated by hard-liners since Turkish Prime Minister Turgut Özal was undergoing open heart surgery in Houston, Texas. As the situation escalated, the US (particularly Robert V. Keeley, US ambassador in Athens) and NATO intervened to defuse the crisis. Papandreou wanted to hold NATO, and especially the United States, responsible for the Turkish aggressiveness. He ordered the suspension of the operation of the NATO communication base in Nea Makri, and he sent the Greek Foreign Minister, Karolos Papoulias, to Warsaw Pact member, Bulgaria, for consultations with President Zhivkov. The crisis ended with Greece not pursuing oil drills in the north Aegean Sea and Turkey withdrawing its naval vessels.

In January 1988, Papandreou and his Turkish counterpart, Turgut Özal, met at the annual World Economic Forum at Davos, Switzerland, to improve the relations between their two countries. Papandreou described the meeting as "a great event for the two nations" and "a breakthrough" by Özal. Part of the meeting was a 'no war agreement' and establishing a 'hotline' between the two governments, and joint committees were established to work towards closer political and economic relations. Papandreou sought this agreement to improve his image as a man of peace, while Özal wanted to improve Turkey's image abroad as his country was under evaluation for full membership of the European Community. However, only a week after the Davos meeting, Papandreou was under pressure from Mitsotakis' criticism that Papandreou focused only on bilateral disputes in Davos and effectively "shelved" the Cyprus dispute. Papandreou was forced to denounce the Davos process and famously apologized in Latin ("mea culpa") from the podium of the Greek parliament. Despite some progress achieved on culture exchange and accident prevention over international waters, however, by the end of 1988, Greece reported 338 Turkish violations of the Greek airspace with 42 mock dogfights, making it clear that much of the 'spirit of Davos' was quickly vanishing.

Heart Surgery, Liani, and crowd size

In August 1988, Papandreou (at age 70) underwent major heart surgery in London, but he refused to yield the reins of power. The operation and recovery lasted three months, leaving the Greek state and party without a leader. The opposition described the situation as "government by fax."

However, in London, it was revealed that next to him was not his wife but Dimitra Liani, an Olympic Airways steward aged 33, who had met in 1986, and she was a constant companion in the last months before the surgery. Soon after the revelation, Papandreou divorced his wife Margaret Chant one month before the elections of June 1989 and married Liani soon after. Liani became an influential 'gatekeeper' for Andreas' favor and was involved in appointments in the Prime Minister's Office. The sudden elevation of Liani in the Prime Minister's Office had negative effects on the operation of the government and caused discontent among members of PASOK and his sons had key positions in PASOK.

The return from London after the heart surgery (22 October) sparked another series of controversies. No family member was there to greet Andreas Papandreou, including his eldest son (George Papandreou), who was the Minister of Education and a key member of PASOK. Three days later, there was a sudden strike from the Greek Radio and Television Corporation (ERT) employees, alleging that PASOK gave prepared texts to ERT's employees to read as live reports at the scene of Papandreou's arrival. Moreover, the government spokesman publicly stated that the strike was illegal and accused the ERT's union of not describing Papandreou's arrival (crowd size and enthusiasm) in the same way as Karamanlis's return after the junta's fall.

Koskotas scandal

Early in the second administration, press reports on PASOK's corruption multiplied, with notable ones being the "Yugoslav corn scandal," the "telephone tapping scandal," and the "public utilities scandal." However, Papandreou himself was implicated in the Koskotas scandal, which overshadowed all other PASOK's scandals. George Koskotas was the owner of the Bank of Crete and, in a short amount of time, bought several newspapers, including two of the largest conservative newspapers (Kathimerini and Vradyni), radio stations, and one the top soccer teams, Olympiacos F.C. in the mid-80s. Publishers became suspicious of the rapid changes in the media landscape and started investigating where Koskotas was finding all this money. Moreover, it became apparent that Koskotas had help from the PASOK government in overcoming bureaucratic barriers. Soon, a judicial inquiry found that Koskotas embezzled large sums from the bank's clients and illegally used this money to form a mass media empire to support PASOK exclusively. The Greek court also restricted Koskotas from leaving Greece. To avoid justice, he left Greece for the United States (with an intermediary stop at Brazil) on 5 November 1988 despite being under strict surveillance by Greek security forces.

Koskotas was arrested on 24 November 1988 in Massachusetts for unrelated crimes and was jailed in the United States. In December 1988, after the opposition and various respected former ministers called for a clean-up, Papandreou reshuffled the ministers and yielded under pressure to a parliamentary commission inquiry. Demetrios Halikias, the governor of the Bank of Greece, testified to the commission on 7 December 1988 that two senior PASOK ministers had tried to prevent an audit of the Bank of Crete. Resignations followed (Stathis Yiotas, Deputy Defence Minister, and Theodore Karatzas, Finance Under Secretary) upon the revelations during the inquiry that the members of Papandreou's government were profiteering by illegal arms sales to both sides in the Iran–Iraq War and the apartheid state of South Africa.

In March 1989, Time magazine published an article describing in detail the allegations that Koskotas made to US officials. Koskotas alleged that Andreas Papandreou and other PASOK high functionaries had ordered state corporations to deposit funds (over US$200 million) with the Bank of Crete, which went missing in the form of bribes and acquisition of mass media companies. Koskotas claimed that on one occasion, he had delivered to Papandreou himself US$600,000 stuffed in a Pampers Diapers box. Andreas Papandreou denied the story, accused the US of manufacturing this scandal to destroy him, and even sued Time magazine. Nonetheless, Koskotas's accusations gained international attention. Several months after the arrest of Koskotas, six ministers (including Costas Simitis) resigned in protest of the corruption among the most senior members of PASOK.

There were demands for a vote of no confidence against the government, which Papandreou defeated in December 1988 and another one in March 1989. Still, three members of PASOK voted against the party line, however, Papandreou responded by removing them from PASOK, including Antonis Tritsis who was a founding member of PASOK. Papandreou attacked the judiciary independence by passing a law via emergency procedures, despite massive backlash from lawyers, judges, and clerks, to alter the judicial procedure to avoid or delay the convocation of the Athens Appeals Court, which was responsible for initiating criminal proceedings on financial scandals, like the case of Koskotas.

Political polarization reached a climax five weeks before the scheduled elections of November 1989, where the Greek parliament would start deliberations on whether Papandreou and three of his ministers would be indicted. On this day (26 September 1989) and hours before deliberations began, Pavlos Bakoyannis, a prominent conservative member of parliament and the architect of collaboration between the left and right wings for Papandreou's indictment, was shot by 17 November terrorist group outside his office in Athens. Both major political parties (New Democracy and PASOK) accused each other for the assassination. A few days later, Papandreou stormed out of Parliament, shouting, "I accuse my accusers.", just before the parliamentary vote on his indictment.

Koskotas was extradited to Greece in 1991 for the trial, and Papandreou's trial began in Athens on 11 March 1991. However, as a former prime minister, he exercised his constitutional right not to attend the trial and proclaimed that the trial was a witch-hunt. In January 1992, the Parliament-appointed tribunal of 13 judges of Supreme Special Court, having heard over 100 witnesses and investigated 50,000 pages of documents over ten months, acquitted Papandreou of all charges against him with a 7–6 vote. During the trial, the deputy of the Prime Minister, Agamemnon Koutsogeorgas, who was also accused and a close friend of Papandreou, had a heart attack on live television and died a few days afterward. Dimitris Tsovolas, former Minister of Finance, was sentenced to two-and-a-half jail years. Koskotas was tried and sentenced to a 25-year prison term. When Karamanlis was asked about the verdict, he commented, "In democracies, prime ministers do not go to prison. They return home." by both reaffirming the court's decision while at the same time admitting the existence of both positive and negative implications for the country. The trial was characterized as the "trial of trials" and the most critical judicial decision in modern Greek history since the Trial of the Six in 1922.

Abuse of power

Beyond the financial scandals, the public was getting worried about the government's assertions of arbitrary power. Andreas Papandreou used the national broadcasting organization as a public relations agency. The newspapers that were unfriendly to PASOK were openly threatened by his ministers. In 1989, it was revealed that the National Information Service (EYR), through the state telecommunications organization OTE, had been bugging over 46,000 phones of allies and enemies in politics, press, business, and law and Andreas Papandreou used the information obtained for PASOK's purposes; a former head of EYR claimed that none of these activities would have been possible without the approval of the Prime Minister, involving Papandreou in another scandal. Six months before the 1989 elections, public appointments were bestowed on about 90,000 people as a way to gain additional votes. The abuse of power continued when Papandreou changed the electoral law shortly before the June 1989 general elections, a move designed to prevent the absolute majority of a rival political party. Papandreou's action prolonged the instability because no stable government existed to address the mounting economic problems for nearly a year and three national elections.

Catharsis (1989-1990)

Charilaos Florakis took the decisive step to collaborate with conservatives, closing the chapter of the Greek Civil War, to indict Andreas Papandreou for the PASOK scandals.

In the June 1989 elections, PASOK's electoral percentage fell to 38%, owing much to the Koskotas scandal. However, Mitsotakis' party got 43%, but it was insufficient to form a government; Papandreou's last-minute change of the electoral vote law required a party to win 50% of the vote to govern alone. Papandreou hoped that while PASOK might come second in electoral votes, it could form a government with the support of the other leftist parties, but he was rejected. Instead, New Democracy (right wing) collaborated with the Synaspismos (radical left), led by Charilaos Florakis, to form a government; while on the opposite ideological sides (as well in the Greek Civil War), both sought a "catharsis," i.e., investigation and trial of PASOK's corruption is completed. This collaboration was led by first under Tzannis Tzannetakis (2 July-12 October) and then Ioannis Grivas (12 October-23 November). The participation of Synaspismos party in the government marked the end of the militarized politics of the past since there was no reaction from the military. The decision carried additional responsibility because if no charges were brought against Papandreou under the current collaboration between New Democracy and Synaspismos, no future government could do so based on the Greek constitution. The collaboration was soon dissolved after the indictment of Papandreou for the Koskotas scandal (29 September 1989), and the Greek people went to the polls again. In the elections of November 1989, New Democracy got 46% of the vote but could still not produce a government. All the parties in Parliament (New Democracy, PASOK, and Synaspismos) entered a National Union government under Xenophon Zolotas (a retired banker at the age of 85) as a way out of the deadlock and to restore public trust in political institutions. Zolotas resigned in April 1990 due to the inability to reverse the continuous deterioration of the Greek economy from Papandreou's handling of the economy in previous years. In the elections of April 1990, Mitsotakis received sufficient (by one seat above the threshold) support to form a government, and Papandreou became the opposition leader.

Papandreou in opposition (1990-1993)

Recovering from the Koskota scandals and electoral defeat, Papandreou had a relatively quiet opposition strategy (departing from the radical rhetoric in the 70s and early 80s), effectively letting Mitsotakis implement difficult, unpopular economic and foreign policy choices.

Mitsotakis' government, after taking office, introduced a series of austerity measures (following the footsteps of Simitis in 1985-7), including freezing public-sector salaries and pensions, cutting government spending, and raising taxes on various goods, including fuel oil. It also repealed the wage price index, which kept people's incomes high while fuelling inflation, and it was PASOK's popular law among wage earners since 1982 when it was first introduced. This repeal caused wages and salaries to fall by 13% from 1990 to 1993, resulting in continuous strikes by the affected workers. Certain areas, such as banking, were deregulated to attract capital. Mitsotakis' government also sold or liquidated 44 companies controlled by the "Industrial Reconstruction Organisation," which was created by PASOK and was designed to assist failed firms in recovery. The Greek economy started to recover due to Mitsotakis' economic policies toward meeting the Euro convergence criteria, but this was not enough to balance the rising frustration of the Greek voters with the impact of the austerity measures on their lives.

Constantine Mitsotakis initiated efforts designed to improve relations with the US, which Papandreou's anti-American rhetoric had damaged. In July 1990, a defense cooperation agreement was signed regarding the operation of American bases in Greece for the next eight years. Greece's airspace and naval support during the First Gulf War further improved the relations between Greece and US. Mitsotakis also visited Washington, making him the first Greek prime minister to do so since 1964 by Papandreou's father. The fall of Mitsotakis's government followed after Antonis Samaras left the New Democracy party (June 1993) in protest for Mitsotakis removing Samaras from the Minister for Foreign Affairs (April 1992) for his handling of the Macedonia naming dispute with the neighboring country; Mitsotakis had one seat above the threshold according to Papandreou's electoral law.

Andreas Papandreou was campaigning by promising to bring back the euphoria of the early 1980s. Moreover, PASOK's campaign program had dropped the past socialist ideals and instead presented itself as a "responsible" political party. The Greek people voted in October 1993 the return of Papandreou to power. Following the electoral results, Mitsotakis resigned from the leadership of New Democracy and was replaced by Miltiadis Evert.

Return to power (1993-1996)

Prime Minister Andreas Papandreou on official visit with United States President William J. Clinton, Washington, April 1994. Dimitra Liani is in the background on the right.

Papandreou's return to power was less vigorous, as he could only work a few hours a day due to his fragile health, and for much of 1995, he remained bedridden. Lianni, now officially part of the government as Chief of Staff, was the person, along with her staff, that Papandreou depended upon, alienating many of his senior ministers. At the same time, Papandreou's position in PASOK was crumbling, and two factions were emerging: the "reformers" faction with a pro-Europe vision led by Costas Simitis, Vasso Papandreou (no relation) and Theodoros Pangalos, and the "loyalists" faction advocating a populist path led by Akis Tsochatzopoulos, Kostas Laliotis, and Gerasimos Arsenis. All of them were long-time (some even founding) members of PASOK. However, Papandreou was said to favor one of the loyalists without specifying which, but rank and file tended to favor the pro-Europe reformers, reflecting Papandreou's losing grip on his party.

Like Mitsotakis, Papandreou had to bring the Greek economy to converge to Euro convergence criteria, but little time remained to achieve them. He abandoned his campaign promises and continued the austerity policies of Mitsotakis with minor alterations, expanding the deregulation and liberalization of the economy. There was less public reaction to these policies because Papandreou found a compromising position between capital and labor, and the pace of deregulation was slower than his predecessor.

In foreign policy, Papandreou followed a hawkish strategy. In February 1994, Papandreou ordered an economic embargo on landlocked North Macedonia due to the ongoing naming dispute regarding the name of the then Republic of Macedonia. In April 1994, Papandreou visited the United States to meet with President Clinton, who had recently recognized the new republic, but the visit did not result in any immediate breakthroughs. Papandreou hoped the embargo would have been a bargaining chip, but it backfired since North Macedonia gained considerable sympathy worldwide, damaging Greece's reputation. In September 1995, an interim accord was signed between the two countries to address the matter and the name issue temporarily and ending the 18 months embargo. Papandreou also announced the "Common Defence Dogma" with the Republic of Cyprus (October 1993) and the intention of expanding the territorial waters to 12 miles (November 1994), which further disturbed Turkey and increased the chances for another crisis, as it happened at Imia in January 1996, right after the transition of power from Papandreou to Simitis.

Papandreou was hospitalized with advanced heart disease and renal failure on 21 November 1995 at Onassio Cardiac Surgery Centre and refused to retire from office. Papandreou's refusal to resign paralyzed the government; Costas Simitis resigned in protest, and Papandreou's eldest son joined the call for his father to resign "for the good of the country." Eventually, Papandreou resigned on 16 January 1996, and Costas Simitis was chosen as the new party leader on 18 January. Papandreou died on 23 June 1996.

Government style

Papandreou had lifelong experience in political campaigning, which few could match in the metapolitefsi era (1974-1990), and had commanding leadership in setting the narrative of Greece in the greater context. However, he had little ministerial experience (18 months when his father was prime minister from February 1964 to July 1965), and spent little time preparing on how to govern before the 1981 election victory. The lack of experience was exacerbated by two more choices. First, Papandreou chose ministers with no previous ministerial experience but were also ideologically similar, thus eliminating differences of opinion that could lead to intra-party factionalism. Second, PASOK passed Law 1232/82 in 1982, which purged senior civil servants from all ministries (eliminating institutional memory) based on the allegation that they were hostile to the new regime, and they were replaced by party loyalists who had little knowledge of how the government worked. Papandreou had unchallenged authority in PASOK, often acting as the 'final arbiter,' and did not hesitate to silence his intra-party critics with expulsion from PASOK, less so in his third administration (1993-1996) as his grip on his party was weakening. Limited access to Papandreou (especially in later years), lack of guidance, and fluid organizational structure left his ministers spending valuable time decoding what their 'Leader' wanted. These choices reflected his aversion to institutional development and instead opted for personality (reactive) politics to be the cohesive force that kept PASOK together. Papandreou had to restart the government frequently as he holds the record for the most ministerial reshuffles (13 times in 1981-9, with over 100 people changing various ministerial positions). Papandreou found the day-to-day government management less interesting (especially after 1983) and instead focused on the grant narratives of Greece's democratization process. The result was that Papandreou's governments were dysfunctional and lacked coordination, with ministers having little or no time until the next reshuffle to implement campaign promises. The fluid government style of Papandreou, both in structure and in personnel, also made his governments vulnerable to corruption, as the Koskotas scandal proved.

Economic policies

Andreas Papandreou implemented a transformative economic agenda aimed at restructuring the Greek economy and addressing socioeconomic inequalities. His policies were heavily influenced by his socialist ideology and his leadership. Early in his tenure, Papandreou pursued expansionary fiscal policies, characterised by significant increases in public spending (Which rose by 40% from 1982 to 1988)) to boost social welfare, healthcare, education, and pensions. This approach aimed to improve living standards for Greece’s lower-income and rural populations, aligning with PASOK's vision of economic redistribution.

Papandreou's government also implemented protectionist trade policies and sought to foster economic self-sufficiency, reducing Greece’s reliance on foreign imports. He expanded state ownership in key sectors such as banking, industry, and transport, believing this would stabilise the economy and protect national interests. However, this approach, coupled with a growing public sector wage bill, resulted in substantial fiscal deficits. His administration resorted to borrowing, which contributed to an increasing national debt that became a central challenge for subsequent governments.

While Papandreou’s policies were praised for addressing social inequality and modernising infrastructure, critics highlighted the long-term economic imbalances they created. The combination of high public spending, deficits, and borrowing placed strain on the Greek economy, leading to inflation and a trade deficit. Despite these criticisms, his tenure is remembered for its emphasis on social welfare and efforts to integrate Greece more fully into the EEC, laying the groundwork for Greece’s eventual participation in the European Union. The expenditure programme of the Papandreou government during 1981–1990 has been described as 'excessive' by its conservative critics. The expenditures were not accompanied by corresponding revenue increases and this led to increases in budget deficits and the public debt. Many economic indicators worsened during 1981–1990 and the economic policies of his government were condemned as a failure by his critics. Various nationalizations of enterprises and the increase of the public sector was another point of critic by the conservatives.

According to his supporters they were successful, drastically increasing the purchasing power of the vast majority of Greeks, with personal incomes growing by 26% in real terms during the course of the 1980s. Papandreou's increased spending in his early years in power (1981–1985) was necessary in order to heal the deep wounds of the Greek society, a society that was still deeply divided by the brutal memories of the Civil War and the right-wing repression that followed; furthermore, the postwar government philosophy of the Greek conservatives simply saw the state as a tool of repression, with very little money spent on health or education. Papandreou's governments managed to handle the inflation and unemployment rate, maintain the growth of the economy, while according to his supporters the external debt in 1989 was in normal levels (around 65% of GDP).

International politics

Papandreou was praised for conducting an independent and multidimensional foreign policy, and proved to be a master of the diplomatic game, thus increasing the importance of Greece in the international system. He was co-creator in 1982 of, and subsequently an active participant in, a movement promoted by the Parliamentarians for Global Action, the Initiative of the Six, which included, besides the Greek PM, Mexico's president Miguel de la Madrid, Argentina's president Raúl Alfonsín, Sweden's prime minister Olof Palme, Tanzania's president Julius Nyerere and India's prime minister Indira Gandhi. The movement's stated objective was the "promotion of peace and progress for all mankind". After various initiatives, mostly directed at pressuring the United States and the Soviet Union to stop nuclear testing and reduce the level of nuclear arms, it eventually disbanded.

Papandreou's rhetoric was at times antagonistic to the United States. He was the first western prime minister to visit General Wojciech Jaruzelski in Poland. According to the Foreign Affairs magazine Papandreou went on record as saying that since the USSR is not a capitalist country "one cannot label it an imperialist power." According to Papandreou, "the Soviet Union represent[ed] a factor that restrict the expansion of capitalism and its imperialistic aims". This antagonistic stance made him extremely popular, because the previous conservative governments were seen by the Greek people as slavishly loyal to US interests.

Papandreou's government was the first in post-war Greece that redirected the nation's defense policy to suit its own security needs, and not those of the United States. According to historian Marion Sarafis, from 1947 until 1981, the US had more influence in Greece's military policy than the indigenous Greek high command, largely due to the decisive role played by the US in the Greek Civil War.

Papandreou supported the causes of various national liberation movements in the world, and agreed for Greece to host representatives offices of many such organisations. He also supported the cause of Palestinian liberation, met repeatedly with PLO chairman Yasser Arafat and condemned Israeli policies in the occupied territories. He was a supporter of the two-state solution for the conflict.

Cultural and political image

Among both his supporters and his opponents, Papandreou was referred to simply by his first name, "Andreas", a unique situation in Greek political history, and a testament to his charisma and popularity. Andreas was also famous for wearing his business suits with turtleneck sweaters (ζιβάγκο in Greek), instead of the traditional white shirt and tie; he thus created a new fashion trend, mainly but not exclusively among his political supporters. His first appearance in the Greek Parliament with a black turtleneck instead of a shirt and tie caused a massive uproar in the conservative press, who considered him disrespectful of Parliament; however, the whole issue only added to his popularity.

Legacy

Papandreou's grave in the First Cemetery of Athens. On his grave is written Hellas belongs to the Hellenes.

Andreas Papandreou is widely acknowledged as having shifted political power from the traditional conservative Greek Right, which had dominated Greek politics for decades, to a more populist and centre-left locus. This included the so-called pariahs in politics as of the end of the Greek Civil War, which were given a chance to prove themselves in democratically elected governments. This shift in the Greek political landscape helped heal some of the old civil war wounds; Greece became more pluralistic, and more in line with the political system of other western European countries. Papandreou also systematically pursued inclusionist politics which ended the sociopolitical and economic exclusion of many social classes in the post-civil war era.

Papandreou exercised a more independent foreign policy elevating Greece's profile among non-aligned nations. He affirmed Greece's independence in setting her own policy agenda, both internally and externally, free from any foreign domination.

His opponents on the left, on the other hand, including the Communist Party of Greece (KKE), accused him of supporting, in practice, the agenda of NATO and the United States.

It is also acknowledged that Papandreou, along with Karamanlis, played a leading role in establishing democracy in Greece during metapolitefsi. He is described as both prudent and a realist, despite his appearance as a leftist ideologue, and charismatic orator. His choices to remain in the European Union and NATO, both of which he vehemently opposed for many years, proved his pragmatic approach. Even his approach of negotiating the removal of the US bases from Greece was diplomatic, because although it was agreed to remove them, some of the bases remained. His skillful handling of these difficult policies had the effect of providing common policy goals to the political forces of Greece. Complementing this political realism, Andreas' ability to publicly say no to the Americans gave Greeks a sense of national independence and psychological self-worth. Perhaps his most important achievement was the establishment of political equality among Greeks; during his years in power the defeated left-wingers of the Civil War were no longer treated like second-class citizens and a vital part of national memory was reclaimed.

Papandreou's successor in office, Costas Simitis, broke with a number of Papandreou's approaches.

Papandreou's son, George Papandreou, was elected leader of PASOK in February 2004 and prime minister during the October 2009 general elections. A common slogan among PASOK followers in political rallies, invokes Andreas' legacy with the chant "Ανδρέα ζείς! Εσύ μας οδηγείς!" ("Andreas, you are still alive! You're leading us!").

In two separate polls, conducted in 2007 and 2010, Andreas Papandreou was voted as the best prime minister of Greece since the restoration of democracy in 1974.

Bibliography

Books

• Papandreou, Andreas (1943). The Location and Scope of the Entrepreneurial Function. Boston: Harvard University.
• ———————; Wheeler, John T. (1954). Competition and its regulation. Summit St. Kent: Prentice-Hall.
• ———————; Sauerlender, Owen H. (1957). A test of a stochastic theory of choice. Oakland: University of California Press.
• ——————— (1958). Economics as a Science. Philadelphia: Lippincott.
• ——————— (1962). A Strategy for Greek Economic Development. Center of Economic Research.
• ——————— (1962). Fundamentals of model construction in macro-economics. Center of Economic Research.
• ——————— (1966). The Political Element in Economic Development. Stockholm: Almqvist & Wiksell.
• ——————— (1966). Δημοκρατία και εθνική αναγέννηση [Democracy and National Rebirth] (in Greek). Athens: Fexis.
• ——————— (1970). Man's freedom. New York: Columbia University Press.
• ——————— (1971). Democracy at Gunpoint. New York: Deutsch.
• ——————— (1972). Paternalistic Capitalism. Minneapolis: The University of Minnesota Press.
• ——————— (1973). Economic Development - Rhetoric and Reality. Vancouver: The University of British Columbia.
• ———————; Zohar, Uri (1974). Project Selection for National Plans. New York: Praeger Publishers. ISBN 978-0-275-08590-2.
• ——————— (1974). The Impact Approach to Project Selection. Toronto: York University.
• ——————— (1975). Ιμπεριαλισμός και οικονομική ανάπτυξη [Imperialism and Economic Development] (in Greek). Athens: Livanis.
• ——————— (1976). Η Ελλάδα στους Έλληνες [Greece to the Greeks] (in Greek). Athens: Karanasis.
• ——————— (1977). Μετάβαση στο σοσιαλισμό [Transition to Socialism] (in Greek). Athens: Αιχμή.

Journal

• Papandreou, Andreas (1950). "Economics and the social sciences". The Economic Journal. 60 (240): 715–723. doi:10.2307/2226710. JSTOR 2226710.
• ——————— (1953). "An experimental test of an axiom in the theory of choice". Econometrica. 21 (3): 477.

Decorations and awards

• Knight Grand Cross of the Order of Isabella the Catholic (1983)
• Star of People's Friendship (1985)
• Order of the Polar Star (1999)

References

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Journals

• Clive, Nigel (1989). "Letter from Greece—mid-December 1988". Government and Opposition. 24 (1): 74–80. doi:10.1111/j.1477-7053.1989.tb00108.x. JSTOR 44482421.
• Clive, Nigel (1990). "The Dilemmas of Democracy in Greece". Government and Opposition. 25 (1): 115–122. doi:10.1111/j.1477-7053.1990.tb00750.x. JSTOR 44482490.
• Clogg, Richard (1982). "The Greek elections of 1981". Electoral Studies. 1 (1): 95–99. doi:10.1016/0261-3794(82)90132-9.
• Clogg, Richard (1985). "The 1985 Constitutional Crisis in Greece". The Journal of Modern Hellenism. 2 (1): 103–112.
• Clogg, Richard (1996). "Andreas Papandreou – A political profile". Mediterranean Politics. 1 (3): 382–387. doi:10.1080/13629399608414596.
• Dimitras, Panayote E. (Spring 1985). "Greece: A New Danger". Foreign Policy. 58 (58): 134–150. doi:10.2307/1148656. JSTOR 1148656.
• Dobratz, Betty A.; Whitfield, Stefanie (1992). "Does Scandal Influence Voters' Party Preference? The Case of Greece during the Papandreou Era". European Sociological Review. 8 (2): 167–180. doi:10.1093/oxfordjournals.esr.a036630. JSTOR 522295.
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• Mavrogordatos, George (1984). "The Greek Party System: A Case of "Limited but Polarised Pluralism"?". West European Politics. 7 (4): 156–169. doi:10.1080/01402388408424501.
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• McDonald, Robert (1985). "Greece after PASOK's Victory". The World Today. 41 (7): 133–136. JSTOR 40395748.
• Melakopides, Constatine (1987). "The logic of Papandreou's foreign policy". International Journal. 42 (3): 559–584. doi:10.1177/002070208704200306. JSTOR 40202471.
• Michas, Takis (2002). "America the despised". The National Interest. 67 (67): 94–102. JSTOR 42897404.
• Nafpliotis, Alexandros (2018). "From radicalism to pragmatism via Europe: PASOK's stance vis-à-vis the EEC, 1977-1981". Southeast European and Black Sea Studies. 18 (4): 509–528. doi:10.1080/14683857.2018.1519686.
• Spourdalakis, Michalis (1996). "PASOK's second chance". Mediterranean Politics. 1 (3): 320–336. doi:10.1080/13629399608414591.
• Tsoukalis, Loukas (Spring 1999). "Greece: Like Any Other European Country?". The National Interest. 55 (55): 65–74. JSTOR 42897144.
• Tsarouhas, Dimitris (2005). "Explaining an activist military: Greece until 1975" (PDF). Southeast European Politics. 6 (1): 1–13.

External links

• "Collection of articles about Andreas Papandreou from Kathimerini" (in Greek).
• "ERT archives; Andreas Papandreou' interview after the 1977 elections" (in Greek).
• T. Pappas (August 2020). "The rise of modern populism". TED.