A Bridge To Nowhere

It's a breathtaking sight, vaulting the sparkling waters of the Gulf of Corinth. When the 2.8-kilometer Corinth Bridge officially opens in September, it will fulfill a century-old dream, linking comparatively wealthy northern Greece to the far poorer southern Peloponnesus. Constructed with 370 million euro worth of European Union funds, the project was supposed to jump-start growth, carrying people and goods into a region that has remained stubbornly underdeveloped. Well, carrying goods anyway. In typical fashion, Greek planners forgot to add a rail line to the blueprints. Thus while the Corinth bridge remains a symbol of Greece's aspirations for the future, it's also eloquent testimony to its bungling efforts to get there.

Greece joined the EU in 1981. But the story of its accession holds many lessons for the new countries joining last week. Though Ireland is often hailed as a role model, Greece is in many ways a more instructive case study. It illustrates not only how membership can reshape a country, but what can happen if the benefits are taken for granted. Since joining, Greece has gone from being a poor, peripheral Mediterranean nation to a regional powerhouse with the fastest economic growth rate in the eurozone. But that growth has come only recently, after nearly two decades of stagnation. Greece spent much of its first 18 years in the EU playing continental bad boy, obstructing European foreign policy and milking billions of euros in subsidies out of Brussels--money that many claim has been put to dubious use.

Even today Greeks admit that their strong economic growth is fueled not by new international competitiveness but by construction for the upcoming Olympic Games--not to mention further EU handouts. Just last month the government sharply revised budget-deficit numbers upward to 2.95 percent of GDP, generating a warning from the European Commission about exceeding the Union's 3 percent ceiling. And last week there were more worrying announcements: major overruns on Olympic spending, a 2 billion euro deficit in public health, an investigation into alleged embezzlement at the Ministry of Defense amounting to millions of euros. Finance Minister Giorgos Alogoskoufis now says "urgent measures" are needed to keep the economy from hemorrhaging. "The previous government has left behind a very unpleasant situation."

The conservative New Democracy Party, which took the reins from the socialists in March after being out of power for all but three years since 1981, has reason to find the state of affairs daunting. Many of Greece's current problems have been brewing for decades, and integration into Europe has been fraught from the get-go. In 1979, when Parliament voted to ratify accession, several leftist parties got together to boycott it. During the 1980s and '90s, the socialist government of Andreas Papandreou cultivated an anti-Western foreign policy, strengthening ties with Libya, courting former Soviet bloc countries and using the threat of its EU veto to bloc Turkey's overtures toward Europe. "His party was trapped in a political ideology of North versus South," says Michael Tsinisizelis, a professor at the University of Athens. "Greece felt it couldn't be a member of a club of industrial countries when it wasn't one itself."

But Greece was quite happy to take the industrialists' money. In the past decade alone Athens has received 55 billion euro in EU funds on such projects as the Corinth bridge, an Athens subway, an international airport and new highways. All the concrete has undoubtedly improved infrastructure and helped modernize the country, as well as providing plenty of new jobs. But Greece's use of EU funds has long been suspect. There have been moderate to severe planning blunders, like the Corinth Bridge flub or the subway line built without leaving room for commuters to park. But there have also been major budget overruns, project delays and widespread suspicions of corruption involving Greek politicians siphoning off money. While it's been difficult to point the finger at individuals, "there's a strong feeling that quite a lot of EU money has been misused," says Kevin Featherstone, a professor of Greek studies at the London School of Economics.

What's more, many economists argue that subsidies have ultimately slowed economic progress by propping up an overblown state bureaucracy and uncompetitive industries. Just as massive amounts of aid to East Germany after reunification kept it dependent on the West, the 55 billion euro of EU subsidies coming in over the past decade arguably made the economy worse than before Greece joined the Union. In 1985, public debt was 50 percent of GDP; a decade later, it was 110 percent.