The Junta Period, 1967-1974
This chapter will focus on the economic development of Greece for the period 1967-1974, when the government was under the control of the military junta headed by Colonel George Papadopoulos. It is important to separate this period from others in order to help evaluate the effect this this government's policies had on social and economic development. The chapter will also discuss the external constraints on economic development. Social unrest and undemocratic conditions were at their highest since the end of the Civil War. This military coup d'etat was the first since 1935.
It is argued in this chapter that the junta's expansionary fiscal and monetary policies up to 1972, designed to achieve immediate economic results in order to gain popularity amid sharp domestic and international criticism, further increased income inequality with respect to wage income. Small nominal wage increases, largely the result of the suppression of trade unions, also made income inequalities worse. Further, it is contended that these policies, especially credit policies, favored real estate speculation and tourism rather than manufacturing and infrastructure development. Thus, it is argued that while strong economic growth continued during this period, economic development was hindered.
The analysis begins with historical background