Labour market deregulation, austerity measures, and social unrest: Greece in comparative perspective

Greece experienced near political implosion between 2010 and 2012 with large-scale demonstrations, strikes, riots, damage to public and private property, and multiple clashes between protestors and the police. This paper provides a political economic explanation for unrest in Greece based on the labour market and argues that sudden labour market deregulation imposed by the ‘Troika’ institutions exposed exceptionally immobile labour groups in Greece to a radical degree of uncertainty and risks. The strict austerity measures and external conditionality made the political authority unable to address those rising grievances. As a result, we witnessed severe unrest and instability in the country. Putting Greece in comparative perspective with seven other European bailout programs during the global financial crisis, the paper shows that, as opposed to the existing explanations based on Greek exceptionalism, such severe labour immobility combined with abrupt labour market deregulation would result in unrest in any country.