Eight years after the fact, a new debate has erupted regarding the responsibility for Greece's fiscal collapse in 2009-10. Was ND the culprit or was it PASOK in the first place?

That is quite a change over recent months because until not too long ago, it seemed clear that Greece's financial collapse was caused singlehandedly by Andreas Georgiou from ELSTAT. Now the two traditional Greek parties, ND and PASOK, have replaced Georgiou in the defendants' dock. That's progress!

At first glance, the case seems clear: Greece may have been on the wrong track for some time before 2004 but the true derailment came at the end of the ND government from 2004-09. The deterioration throughout this governing period was extreme and during the last year, 2008-09, foolish extremism exploded. Case closed.

Or perhaps not? After all, Greece had been in relatively good shape by the time it joined the EU in 1981. Perhaps relatively poor when compared to Central European countries but in relatively good shape, nevertheless: public debt stood at 28% of GDP; the budget deficit was less than 3% of GDP; and the unemployment rate was 2-3%. Something must have happened after 1981 which set the stage for the final orgy from 2004-09, and that something had a first and last name: Andreas Papandreou (and his PASOK).

The best analysis that I know of comes from Prof. Aristides Hatzis who writes:

"PASOK’s economic policies were catastrophic; they created a deadly mix of a bloated and inefficient welfare state with stifling intervention and overregulation of the private sector. The political legacy of PASOK was even more devastating in the long-term, since its political success transformed Greece’s conservative party, ND, into a poor photocopy of PASOK. From 1981 to 2009 both parties mainly offered welfare populism, cronyism, statism, nepotism, protectionism, and paternalism. And so they remain. Today’s result is the outcome of a disastrous competition between the parties to offer patronage, welfare populism, and predatory statism to their constituencies."

In conclusion, the search for responsibility does not result in an either/or explanation (either ND or PASOK). Instead, it is a clear case for an as-well-as explanation (ND as well as PASOK) and substantial progress will have been made if and when both sides accept this fact.