The limits of external empowerment: EMU, technocracy and reform of the Greek pension system

This paper seeks to explain an aborted attempt at reform of the Greek pensi on system, following a series of previous failures. It applies the framewor k of rational choice institutionalism in order to examine the strategy and setting of the relevant actors. The pension system had become a huge fiscal burden on the state, threatening Greece's position in the European Union. Moreover, its gross inequalities of provision and bureaucratic inefficiency were symptoms of the embedded clientelism and 'disjointed corporatism' tha t stood in the way of the government's self-proclaimed 'modernization' prog ramme. In the event, though EMU entry requirements empowered the reform mom entum, a combination of the strategic weakness of key actors and the entren ched opposition of sectoral interests dissipated the initiative. The failur e suggests the relevance of the wider social setting to reform: in particul ar, the weakness of the technocratic community and the relative absence of a supportive 'advocacy coalition', beyond the dominance of the 'party state '. Faced with criticism, the political leadership sought to protect their e lectoral position and postponed pressing decisions. The case study raises i mportant questions about the scope for such reform in Greece and the future stability of the 'Euro-zone'.