The Greek unions and the economy : a perspective.

• Main Authors: Goh, Qianlei., Teo, Yi Qi., Loh, Candy Shu Ying.
• Other Authors: Chew Soon Beng
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Social sciences::Economic development::Europe
• Online Access: http://hdl.handle.net/10356/48162
• Institution: Nanyang Technological University

The Greek debt crisis has led to international bodies, unofficially named the Troika (European Commission, European Central Bank and International Monetary Fund), to step in and enforce a bailout package to avoid Greece’s default. A fresh round of austerity measures includes the cut down on pensions, 150,000 public sector jobs, and government spending amounting to 1.5% of its Gross Domestic Product (GDP). What exactly led to such a large public sector and huge accumulated public debt in Greece? This paper seeks to find out whether the Greek trade union is one of the causes for the ongoing debt crisis. Here, we assemble a set of data ranging from the Greek government debt, unemployment rate, trade union density and GDP per capita over the years of 1993-2010. We then formulated a multiple regression model with the government debt as the dependent variable to examine how the other three variables, especially trade union power, correlate to the debt crisis. Our results are significant and show a positive correlation between the dependent variable – government debt, and the three independent variables. It goes on to show that the three independent variables are important in explaining for the continuously high government debt. From our results, we gather that the Greek trade union is indeed one of the factors which led to the Greek debt crisis. With this, we then explore what the Greek government and the trade unions should have done and should do now to salvage the situation through a comparison made to Singapore’s case-study. The conclusion is that the objectives of clientelism, where the trade unions and government have been micro-biased and are focused on self-interest, have hampered the development of the political and economic situation in Greece. Both parties should in fact use this crisis as a chance to work together to revamp their practices.