Mitsotakis, Simitis and European convergence

ProjectGreece.

The History of Modern Greece, from 1800 to today.

A twenty-part series narrating the journey of modern Greece with sobriety, composure, and documentation.

Eighteenth episode.

Welcome to another episode of the series "The History of Modern Greece, from 1800 to today."

In the previous episode, we reached the end of 1989. Greece had gone through the first PASOK government, the recognition of the National Resistance, social reforms and the expansion of the state, but also economic imbalances, scandals, and two parliamentary elections without a majority government. The Prime Minister was Xenophon Zolotas, head of an ecumenical government.

In the elections of 8 April 1990, New Democracy came first. With marginally secured parliamentary support, Konstantinos Mitsotakis formed a government on 11 April and ended the prolonged period of coalition governments and repeat elections. The President of the Republic was Christos Sartzetakis. On 4 May, Parliament re-elected Konstantinos Karamanlis, who took office on 5 May.

The government sought to limit deficits, privatise, liberalise markets, and restructure public enterprises. Changes in transport, labour relations, and the pension system triggered strikes and major reactions. Privatisation was not a single act: it included sales, liquidations, concessions, and partial entry of private entities, with different outcomes in each organisation.

The conflict also reached education. In January 1991, amidst a wave of school occupations, teacher Nikos Temponeras was murdered in Patras by an official of the New Democracy youth organisation during a violent attempt to reclaim a school. The mass demonstrations that followed led to the withdrawal of key educational measures and the resignation of the Minister of Education. The event showed how quickly an institutional disagreement could turn into political violence.

Following the collapse of the communist regimes, tens of thousands of people, mainly from Albania but also from other countries, crossed into Greece for work and security. Many lived without legal documents, exposed to deportation, exploitation, and racism, while their labour became critical in agriculture, construction, domestic services, and small businesses. Greece was rapidly transformed from a country of emigration into a country receiving immigrants.

The dissolution of Yugoslavia created wars on the northern borders. Greece participated in European and international institutions and applied sanctions, but public opinion often displayed a strong pro-Serbian stance, influenced by religious and historical references and distrust of the West. State policy, social solidarity towards Serbs, and individual sanctions violations should not be conflated into a single picture.

In April 1993, the new state was admitted to the UN under the provisional reference "The Former Yugoslav Republic of Macedonia." The dispute was not resolved. Within New Democracy, the clash between Mitsotakis and Antonis Samaras over the issue contributed to the loss of the government's majority. Elections were called for October.

On 10 October 1993, PASOK won the elections. Andreas Papandreou returned to the premiership on 13 October. The new government abandoned certain privatisations but did not fully return to the model of the 1980s. Fiscal adjustment and the European orientation remained, albeit with a different political vocabulary and pace.

In February 1994, Greece imposed a trade embargo on the neighbouring country, with the exception of humanitarian goods. The act triggered international criticism and a challenge by the European Commission.

On 10 March 1995, Kostis Stephanopoulos succeeded Karamanlis as President of the Republic, having been proposed by Political Spring and supported by PASOK. His election prevented the premature dissolution of Parliament and showed that the office could function as a field for broader consensus.

On 13 September 1995, the Interim Accord was signed in New York: the neighbouring country changed its flag and confirmed that its Constitution did not form the basis for territorial claims, while Greece lifted the embargo and did not prevent its participation in organisations under the provisional reference. The definitive name remained open.

Papandreou's health deteriorated. In November 1995, he was admitted to the Onassis Cardiac Surgery Centre and remained hospitalised, while the government operated without an active prime ministerial presence.

In December 1995, a ship running aground near Imia opened a dispute between Greece and Turkey over sovereignty on the two islets.

In January 1996, Papandreou resigned. The PASOK parliamentary group elected Kostas Simitis, and on 22 January, his first government was formed.

Almost immediately, the dispute escalated into a confrontation of flags, warships, and special forces. On the night of 30 to 31 January 1996, a Greek helicopter crashed, and three officers were killed. Through American mediation, the forces withdrew. The crisis ended without battle but left the disagreement over sovereignty and the term "grey zones" in Turkish argumentation.

In June, Andreas Papandreou died. In the elections of 22 September 1996, PASOK won, and Simitis formed a new government on 25 September. Central keywords were "modernisation" and "strong Greece": infrastructure projects, administrative changes, privatisations or share offerings, and adjustment to the criteria of the Economic and Monetary Union.

In the same year, the collapse of financial schemes in Albania caused armed unrest and a new exodus of the population. Greece participated in the multinational Operation Alba, under a UN Security Council mandate, to protect humanitarian aid. The relationship with Albania now included, simultaneously, security, economic interdependence, the Greek minority, and the daily presence of Albanian workers in Greece.

On 5 September 1997, Athens was selected for the 2004 Olympic Games. The preparation was linked to an airport, the metro, Attiki Odos, the suburban railway, sports facilities, and major redevelopment projects. Not everything was built exclusively "for the Games," nor did all projects have the same funding scheme. This distinction would become critical when costs were discussed.

In March 1998, the drachma joined the European Exchange Rate Mechanism, after its central parity was devalued. The government intensified efforts for lower inflation and deficits. Convergence improved key indicators but was accompanied by high interest rates, wage pressure, tax burdens, and scepticism regarding the sustainability of certain measures.

In the summer and autumn, earthquakes in Turkey and Athens prompted the mutual dispatch of rescue teams and accelerated the Greek-Turkish rapprochement.

In the same year, the rise of the Athens Stock Exchange attracted hundreds of thousands of small investors. The sharp drop that followed wiped out savings and generated allegations of manipulation and political responsibility. There is no single "lost money" figure that measures realised losses, market capitalisation drop, and opportunity profit in the same way.

In December, the Helsinki European Council, with the consent of Greece, recognised Turkey as a candidate for accession, within a framework of conditions and peaceful resolution of disputes. The approach did not solve the Aegean or the Cyprus issue, but it changed the diplomatic method.

The decade also changed news media. Private television, already present since 1989, gathered power, turned political confrontation into a daily spectacle, and became linked to business interests. Radio stations, magazines, and later the first news websites multiplied voices, without solving the problems of ownership, licensing, and intertwined interests.

On 8 February 2000, Kostis Stephanopoulos was re-elected President with a very large parliamentary majority. In the elections of 9 April, PASOK narrowly defeated New Democracy, and Simitis formed his third government on 13 April.

On 19 June 2000, the Council of the European Union decided that Greece met the conditions for the single currency. From 1 January 2001, the euro became the official currency of the country, initially in accounting and electronic transactions, with an irrevocable exchange rate of one euro to 340.75 drachmas. Drachma banknotes and coins remained in daily circulation.

Women increased their presence in universities and paid employment but continued to be underrepresented in politics and senior positions, and to bear a disproportionate burden of care. The constitutional revision of 2001 allowed for positive measures for equality, and legislation introduced quotas for certain collective bodies and on the ballots for municipal and prefectural elections. Legal progress does not equate to full equality in practice.

On 1 January 2002, euro banknotes and coins were released. For two months, the drachma and the euro coexisted; from 1 March, the euro was the only legal tender in transactions. The change facilitated payments and borrowing within the eurozone, but many citizens perceived price increases. Measuring the cost of living differs from the experience of specific daily purchases, which is why neither the official average price nor the generalisation that "everything doubled" is sufficient.

On 29 June 2002, after the injury of one of its members in a failed bombing attempt, the police dismantling of "17 November" began. Arrests followed, along with the discovery of the organisation's hideouts and materials. The dismantling closed a cycle of political violence that had begun in 1975, without making every accused person or relative collectively responsible.

In July 2002, a milder pension regulation was voted into law. The withdrawal of the initial proposal did not make the problem disappear; it postponed and reshaped the conflict.

By the end of this period, digital change had accelerated. Mobile telephony, which began commercially in 1993, became mass-market. The internet moved from universities and businesses into homes, while TAXIS and other electronic services gradually changed the relationship between the citizen and the state. Access, however, remained unequal by age, income, education, and region.

In March 2003, the major trial for "17 November" began. The proceedings were public but accompanied by intense confrontation over anti-terrorism legislation and media coverage.

On 16 April 2003, the Republic of Cyprus signed the Treaty of Accession to the European Union. Negotiations for the plan of UN Secretary-General Kofi Annan continued. Athens supported a solution within the European framework, but the final decision belonged to the two communities of Cyprus.

During the Greek presidency of the European Union, the Thessaloniki Summit in June 2003 confirmed the European perspective of the Western Balkans. It was an important political commitment, not a guarantee of automatic accession. Domestically, new immigration legislation attempted to link residence and work permits, but repeated legalisations showed that the administration did not yet have a stable integration mechanism.

In December, the first-instance trial concluded, with convictions and acquittals. The decision was not yet final.

On 7 March 2004, New Democracy won the elections, and on 10 March, Kostas Karamanlis became Prime Minister. On 24 April, separate referendums decided on the Annan plan: the vast majority of Greek Cypriots rejected it, and the majority of Turkish Cypriots approved it. On 1 May, the Republic of Cyprus joined the European Union, but the application of the acquis communautaire was suspended in the areas not under its control.

From 13 to 29 August, Athens hosted the Olympic Games, and in September, the Paralympic Games. The event was completed without the major failures many had feared and left behind new infrastructure and international visibility. By the end of 2004, however, the sustainable post-Olympic use of several facilities remained an open question.

The cost of the Games does not have an indisputable figure. Some assessments count only the organisational budget, while others add security, expropriations, transport, or projects that would have been built in any case. It is certain that there were overruns in individual components and that the facilities created long-term maintenance obligations. It is not accurate to retrospectively attribute the entire debt crisis to one event without an analysis of public debt, deficits, and statistical revisions.

On 31 December 2004, Kostis Stephanopoulos remained President and Kostas Karamanlis Prime Minister. Greece was a member of the eurozone, Cyprus a member of the European Union, and the major Olympic infrastructure had just been tested. At the same time, productivity, debt, regional inequalities, the integration of immigrants, transparency, and reliable public accountability remained open issues.

The period is not adequately described either as an uninterrupted "strong Greece" or as a simple preparation for a future collapse. European integration, infrastructure, the expansion of consumption, and digital change were real. Equally real were institutional delays, the unequal distribution of benefits, cheap borrowing, and fiscal risks. 2004 ended with self-confidence, but not with all problems solved.

In the next episode, from 2005 to 2015, we will see how these weaknesses met with the global financial crisis, the bailouts, and the deeper social and political upheaval of the post-junta era.

Find all episodes at ProjectGreece.gr,

along with references, additional material, explanations,

sources, and bibliography.

All episodes of the series are available for free

on Spotify, Apple Podcasts, and YouTube Music.

ProjectGreece.

So the story can continue.