The Economics of the Third Way

The Economics of the Third Way

Experiences from Around the World

Edited by Philip Arestis and Malcolm Sawyer

The ‘third way’ is a term often used by politicians and others to indicate a set of new policies adopted by former social democratic parties throughout the world. This book is an attempt to dissect the ideas and economic theory behind the rhetoric of the ‘third way’ through a critical evaluation of the experiences of ‘third way’ administrations in a diverse range of countries.

Chapter 11: The Greek experiment with the Third Way

Thanos Skouras

Subjects: economics and finance, post-keynesian economics, public sector economics


Thanos Skouras* 11.1 INTRODUCTION AND HISTORICAL BACKGROUND The aim of this chapter is to provide an assessment of PASOK’s (Panhellenic Socialist Movement) economic policy to date and to comment on the relationship of this policy to Keynesianism and the economics of the Third Way. PASOK was created in 1974 and first came to power in 1981. Since then it has been in power continuously, with a break of only three years between 1989 and 1993. It has won five electoral contests in 1981, 1985, 1993, 1996 and, most recently, April 2000. Three phases may be distinguished in PASOK’s long period in office. These phases relate to PASOK’s stance vis à vis the European Union. Though PASOK’s relationship to Europe has been of importance to most of its policies, it has had a particularly strong connection with its economic policy. Thus, it may be argued that the clearest way of examining the broad contours and orientation of PASOK’s economic policy is through its position with respect to Europe. The three phases characterising PASOK’s relationship with Europe may be designated as those of contrariety, rapprochement and embracement. The phase of contrariety began before PASOK’s first electoral victory in 1981 and was, in fact, instrumental in its success at the polls. A brief historical detour may be in order here. PASOK was established in 1974 after the fall of the military dictatorship (1967-74). The same year it captured 13.6 per cent of the electoral vote. This was raised to 25 per cent in 1977...

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