Aliki Mouriki
6.1. The socio-economic context
6.1.1. Structure of the economy
A country’s ability to address the challenges of intensified international competition and sustain
or improve its competitive advantage in the world economy largely depends on the structural char-
acteristics of the economy.
Greece and Spain share a common historical legacy as semi-peripheral, late industrializing coun-
tries, ruled during long periods by an authoritarian central state, and characterized by a number of
common structural weaknesses, such as:
• a late de-ruralisation and tertiarisation of the economy;
• a not fully proletarianised manufacturing working class;
• a strong economic role of the family;
• high incidence of SMEs, of which a large number of family-run micro-firms;
• tolerance of tax evasion by SMEs
• traditional forms of work organization; 29
• protected internal markets.
After their accession to the EEC, however, Spain and Greece have followed a different develop-
mental path. In Greece, successive governments in the post-dictatorship era have opted for the low
road to competitiveness, based on low-cost and low-quality products and services, rather than invest-
ing in the development of human capital and innovation capacity. This production “paradigm” has
now reached its limits, as rising competition from countries with significantly lower labour costs is
driving out of business a growing number of firms, especially SMEs.30 What once was a comparative
advantage (low labour costs / low wages), has now become a burden and a trap.
29 Spain and Greece score the highest incidence amongst all EU countries of those working under taylorist or traditional
forms of work organisation (European Commission, 2007).
30 Average wages in Greece are still low compared to the EU-15 average, standing at about 68%, but they are consider-
ably higher than wages in the other Balkan and Eastern-European countries, not to mention the emerging econo-
mies.
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