The political system in Greece has a very long history of clientism that permeates everything in society. When the country gained its independence and the Kingdom was established in 1832, there were three political factions that developed into parties - pro-British (liberal), pro-French (liberal) and pro-Russian (conservative). Gradually the evolution of politics after the revolutions of 1848 took a turn toward an identity that reflected European political developments - from Conservative and Liberal to Agrarian, Socialist, and Communist after the Bolshevik Revolution. Clientism and politics of personality remained at the core of Greek politics and society from Independence to the present.
From 1974 when the military junta fell until the present, Greece has had more than two dozen political parties. Like so many others in Europe and Latin America, Greece in the last half century is a two-party country, with smaller leftist and rightist parties usually receiving single-digit percentages in national elections. Like Spain, Portugal, and France, the Socialists in Greece that represent the 'center' of the electorate are committed to essentially the same foreign, defense, economic, fiscal, and social policies. There are very few differences between the main parties that take turns governing.
More significant, politicians rarely carry out a public works/services programs in the absence of substantial bribes that go from ministerial level all the way down to trade union officials. This situation was widespread for example in Batista's Cuba and throughout Latin America as well as Muslim and sub-Saharan Africa. In the US, a situation of this type can be studied in New York during the Tammany Hall era in the 119th century or in Chicago under 'his Honor Mayor Richard J. Daley' in the 1960s. In New York and Chicago, however, political and business corruption did not necessarily exclude efficiency 'getting things done', although at a huge cost to society and to democracy.
This is not the case with post-WWII countries operating under clientism. For example, if the city of Athens needs 10 buses for public transport and MANN corporation sells them at 200,000 each, the total charge will be between 50 and 100 percent higher owing to bribes that start with the minister and filter down to lower ranking officials. It is the same with public works, pharmaceutical products, and literary every product and service. Such widespread bribery adds substantially to the budget and the need to borrow to finance corruption.
At the same time, Greece has a problem of widespread tax evasion that is at levels of many Third World countries. Tax evasion works in similar ways as bribery. For example, I own a mid-sized construction company and I have a gross income of two million euros annually. The process of tax evasion starts with my political representative, accountant, and at least one of the several tax local officials that will require bribing so that my tax liability is reduced substantially if not eliminated altogether. At the lower levels, tax inspectors may ask me as a construction businessmen to have my crew do some jobs on their properties free of charge for labor and materials. In this manner, there is no trace of a bribe changing hands. Tax evasion is so deeply ingrained into the culture that people ask their accountants to bribe officials rather than pay taxes, even if taxes are lower than the total sum of the bribes.
From the War of Independence to the present, politicians have been interested in maintaining the medieval fiefdom system across the country in all institutions that rarely operate on a merit basis because it means:
b) money directly or indirectly for them; and
c) political power that is seemingly just as significant as that of the business elites.
Like many semi-developed and underdeveloped nations, Greece has used the public sector to absorb the surplus labor force, because the economy is grossly underutilized and directionless if not semi-chaotic in comparison with Norway. Based on tourism, shipping, agriculture, and light industries, the economy fails to serve the needs of the domestic market, thus there is a chronic balance of payments problem owing to heavy reliance on imports. As a recent World Bank economist recently said of Spain, the problem is not so much the public sector as it is the private sector that is a mess. This applies much more to Greece, but also to Portugal and many semi-developed and underdeveloped nations.
The public debt problem - now a full fledged crisis - has been around from the War of Independence that was carried out with loans from the Great Powers that used the loans as political and economic leverage to exert hegemonic influence on policy to the present. There is nothing wrong with public loans per se. After all that is how the US developed its economy in the 19th century when it was a net debtor nation. Public borrowing however, assumes that the funds are used toward 'meritorious' economic and social projects that society needs and that serve the public.
There is something seriously wrong when the Greek government purchases German railroad trains whose wheels are wider than the tracks designed to accommodate narrower trains, and when such trains are never used and cost twice what they would for one of the industrialized countries where the chance of bribery would be a great deal less.
Such cases as overpaid trains that never become operational illustrate not just what goes on in Greece, but a more general pattern of 'political bribery and dumping' that involve public officials and large corporations backed by their host government. In short, the German government lobbies hard to have its companies do business in countries around the world where Germany extends government loans as part of 'consortium lending'. If Germany's share is 25% of a consortium loan, then the debtor nation must extend contracts that amount to 25% for purchases, and not offer such contracts to a company whose nation has not provided any loans. There is linkage between loans and trade and that has been the case from the 'Age of Imperialism' to the present.
Finally, how do austerity measures fit into the politics of clientism? The US and the other advanced capitalist countries have used austerity in the last six decades to 'punish' a periphery country politically or economically and to force it into political and economic compliance with the metropolis. The politics of clientism actually help to perpetuate dependent capitalism and the transfer of capital from the periphery to the metropolis. It is in the interests not only of the national political elites to maintain fiefdoms but of the comprador bourgeoisie, foreign capitalists doing business in the periphery and governments in the metropolis.