Manipulating rules, contesting solutions: Europeanization and the politics of restructuring olympic airways

Government and Opposition

Volumn 42, Issue 1, 2007, Pages 46-72

  Featherstone, Kevin ^a   Papadimitriou, Dimitris ^a  

^a NONE

Author keywords

[No Author keywords available]

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EID: 33846195488     PISSN: 0017257X     EISSN: 14777053     Source Type: Journal    
DOI: 10.1111/j.1477-7053.2007.00212.x     Document Type: Article

References (94)

1. The present article is part of an ongoing research project on Europeanization and structural reform in Greece. The authors would like to express their gratitude to the large number of actors within the sector in Athens - from government, unions and management - who made themselves available for personal Interviews. The authors have respected their desire to remain anonymous. Moreover, invaluable comments have been received from seminar presentations given at the universities of Athens and Sheffield and at the ECPR Joint Sessions, 2005. Any errors remain ours.
2. M. Cini and L. McGowan, Competition Policy in the European Union, London, Macmillan, 1998, p. 223.
3. The individual or collective actors who must agree to the change before it can happen, see G. Tsebelis, Veto Players: How Political Institutions Work, Princeton, NJ, Princeton University Press, 2002, p. 19.
4. G. Tsebelis, Nested Games: Rational Choice in Comparative Politics, Berkeley, University of California Press, 1990.
5. T. A. Börzel, 'Non-Compliance in the European Union: Pathology or Statistical Artefact?', Journal of European Public Policy, 8: 5 (October 2001), pp. 803-24, p. 813.
6. G. Falkner, M. Hartlapp, S. Lieber and O. Trieb, 'Non-Compliance with EU Directives in the Member States: Opposition through the Backdoor?', West European Politics, 27: 3 (May 2004), pp. 452-73;
7. H. A. D. Mbaye, 'Why National States Comply with Supranational Law', European Union Politics, 2: 3 (2001), pp. 259-81.
8. See, for example, C. Knill, 'European Policies: The Impact of National Administrative Traditions', Journal of Public Policy, 18: 1 (1998), pp. 1-28;
9. Knill and A. Lenschow, 'Coping with Europe: The Impact of British and German Administrations on the Implementation of EU Environmental Policy', Journal of European Public Policy, 5: 4, (1998), pp. 595-614;
10. Knill and A. Lenschow (eds), Implementing EU Environmental Policy: New Approaches to an Old Problem, Manchester, Manchester University Press, 2000;
11. T. A. Börzel, 'Why There is no "Southern Problem". On Environmental Leaders and Laggards in the European Union', Journal of European Public Policy, 7: 1 (March 2000), pp. 141-62.
12. Börzel, 'Why There is no "Southern Problem"', p. 141.
13. M. Haverland, 'National Adaptation to the European Union: The Importance of Institutional Veto-Points', Journal of Public Policy, 20: 1 (2000), pp. 83-103.
14. A. Heritier, D. Kerwer, C. Knill, D. Lemkuhl, M. Teutsch and A.-C. Doillet (eds), Differentiated Europe: The European Union's Impact on National Policy-Making, Oxford, Rowman and Littlefield, 2001.
15. Tsebelis, Veto Players, pp. 2-3 and 11-12.
16. G. Falkner, O. Treib and M. Hartlapp, 'Worlds of Compliance: Why Leading Approaches to EU Implementation Are Only "Sometimes-True Theories'"; ECPRJoint Sessions, Workshop 4; Granada, 14-19 April 2005.
17. See Knill, 'European Policies'.
18. See Börzel, 'Why There is no "Southern Problem"'.
19. Haverland, 'National Adaptation to die European Union'.
20. Falkner, Treib and Hartlapp, 'Worlds of Compliance'.
21. G. Falkner, O. Treib, M. Hartlapp and S. Leiber, Complying with Europe: EU Minimum Harmonisation and Soft Law in the Member States, New York, Cambridge University Press, 2005.
22. For further background information, see: http://www.europa.eu.int/comm/ transport/air/rules/competition_en.htm.
23. Cini and McGowan, Competition Policy in the European Union., p. 136.
24. Loyola De Palacio was a leading member of the centre-right Partido Popular in Spain, having previously served as minister of agriculture and as a member of the European Parliament (briefly). She was appointed as vice-president of the Commission, responsible for relations with the European Parliament, alongside the Transport and Energy portfolios, under President Romano Prodi. Previously, Neil Kinnock, formerly leader of the British Labour Party, held the Transport portfolio in the Commission of Jacques Santer, 1995-99.
25. R. Doganis, The Airline Industry in the 21st Century, London: Routledge, 2001.
26. European Parliament Questions, 16 November 1999.
27. Ibid.
28. Speech of Loyola De Palacio, World Economic Forum, New York, 3 February 2002.
29. Cini and McGowan, Competition Policy in the European Union, p. 174.
30. K. Button, 'Deregulation and Liberalization of European Air transport Markets', Innovation: The European Journal of the Social Sciences, 14: 3 (September 2001), pp. 255-75.
31. M. Sebastiani, 'Il settore aereo fra liberalizzazione e concentrazione' ('Liberalization and Consolidation in Air Transport Market'), Industria 23: 1 (January-March 2002), pp. 107-26;
32. J. Pelkmans, 'Making EU Network Markets Competitive', Oxford Review of Economic Policy, 17: 3 (2001), pp. 432-56.
33. E. J. Morgan and S. McGuire, Transatlantic Divergence: GE-Honeywell and the EU's Merger Policy', Journal of European Public Policy, 11: 1 (2004), pp. 39-56, p. 45.
34. K. Featherstone, 'Introduction: Modernisation and the Structural Constraints of Greek Politics', West European Politics, 28: 2 (March 2005), pp. 223-41;
35. Sotiropoulos, 'A Colossus with Feet of Clay: The State in Post-Authoritarian Greece', in H. Psomiades and S. B. Thomadakis (eds), Greece, the New Europe and the Changing International Order, New York: Pella, 1993;
36. Constantinos Tsoukalas, (Social Development and the State), 6th edn, Athens, Themelio, 1993.
37. See K. Lavdas, The Europeanisation of Greece: Interest Politics and the Crises of Integration, London, Macmillan, 1997;
38. P. Ioakimidis, H (The European Union and the Greek State), Athens, Themelio, 1998
39. and P. Ioakimidis, 'The Europeanization of Greece: An Overall Assessment', in K. Featherstone and G. Kazamias (eds), Europeanization and the Southern Periphery, London, Frank Cass, 2001, pp. 73-94.
40. Indeed, there is a very limited literature on privatization in general in Greece. Haritakis and Pitelis noted that the 'particularly inefficient and corrupt public sector' creates a need for privatisation in Greece (N. Haritakis and C. Pitelis, 'Privatisation in Greece', in D. Parker (ed.), Privatisation in the European Union: Theory and Policy Perspectives, London, Routledge, 1998, p. 134).
41. Clifton et al. argued that the 'overriding reason for [privatization] was to reach the convergence criterion to participate in EMU (J. Clifton, F. Comin and D. D. Fuentes, Privatisation in the European Union: Public Enterprises and Integration, London, Kluwer, 2003, p. 69).
42. Indeed, Lavdas was surely correct to note that, 'Economic liberalization and Europeanization have been the twin processes gradually reshaping the political economies of the European South since the 1980s'(K. Lavdas, 'The Political Economy of Privatization in Southern Europe', in D. Braddon and D. Foster (eds), Privatization: Social Science Themes and Perspectives, Aldershot, Dartmouth, 1996, pp. 233-60, p. 254).
43. More directly relevant is G. Pagoulatos's study ('The Enemy Within: Intragovernmental Politics and Organizational Failure In Greek Privatization', Public Administration., 79: 1 (2001), pp. 125-46) of the privatization attempts of the earlier (centre-right) Mitsotakis government. He argued that policy failure was the result of such a concentration and the irony of a statist, irnpositional strategy for market liberalization. Pagoulatos's case study highlighted particular features of administrative ill coordination (indeed 'intragovernmental feudalisation', p. 138), lack of policy preparation, the isolation of key technocratic advisers, and the cavalier and arrogant attitude of ministers - key factors undermining effectiveness and coherence. These factors were of little relevance in the present case study, however.
44. Olympic Airways (OA) was founded as a private enterprise in 1957 by the Greek magnate Aristotle Onassis. The company was sold to the Greek state on 26 June 1975.
45. A. O. Krueger, 'The Political Economy of the Rent-Seeking Society', American Economic Review, 64: 3 (1974), pp. 291-303;
46. A. Lyberaki, and E. Tsakalotos, 'Reforming the Economy without Society: Social and Institutional Constraints to Economic Reform in post-1974 Greece', New Political Economy, 7: 1 (2003), pp. 93-114;
47. G. Pagoulatos, Greece's New Political Economy, Basingstoke, Palgrave Macmillan, 2003.
48. Lavdas, The Europeanisation of Greece; G. Mavrogordatos, (Between Pitiokamptis and Procroustis: Professional Associations in Today's Greece), Athens, Odysseas, 1988;
49. G. F. Koukoules, 1938-1984 (Greek Trade Unions: Economic Self-Reliance and Dependence, 1938-1984), Athens, Odysseas, 1984;
50. Constantinos Tsoukalas, (State, Society and Labour in Post-War Greece), Athens, Themelio, 1987.
51. Doganis, The Airline Industry in the 21st Century.
52. The proposals of the Greek government for Olympic provided for: (a) the write-off of ECU1.4 billion (GDR427 billion) of accumulated debt; (b) the conversion of ECU209 million (GDR64 billion) of debt into equity; (c) a capital injection of ECU177 million (GDR54 billion) in three yearly instalments between 1995 and 1997; and (d) the extension of ECU300 million (GDR91.6 billion) of state guarantees to Olympic until the end of 1997.
53. Doganis, The Airline Industry in the 21st Century; Commission of the European Communities, 'Decision on Aid Granted by Greece to Olympic Airways', Brussels, 7 October 1994 (OJ L 273, 25.10.94).
54. Doganis, The Airline Industry in the 21st Century, pp. 207-9.
55. Eleftherotypia, 30 April 1996.
56. Commission of the European Communities, 'State Aid C 14/94 - Greece', Brussels, 19 June 1996.
57. Greece entered ERM II on 14 March 1998.
58. Commission of the European Communities, 'Decision on Aid Granted by Greece to Olympic Airways', Brussels, 14 August 1998 (OJ L 128/1), 21.5.1999). During the negotiations Athens accepted the Commission's claims of illegal state aid to Olympic during 1994-98 and agreed a deduction of ECU38.6 million (GDR11 billion) from the second and third instalments. During the same negotiations the Commission also authorized state loan guarantees of $378 million for the purchase of new aircraft for Olympic.
59. Independent, 22 June 1999.
60. Eleftherotypia, 24 December 1999.
61. Observer, 5 July 1999.
62. In 1999 OA employed 7,000 permanent and 3,000 seasonal staff. See To Vima, 14 April 2002.
63. Commission of the European Communities, 'Decision on Aid Granted by Greece to Olympic Airways', Brussels, 11 December 2002 (OJ L 132/1, 28.5.2003).
64. Ta Nea, 19 May 2000.
65. Ta Nea, 3 May 2000.
66. Eleftherotypia, 5 June 2000.
67. Eleftherotypia, 7 July 2000;
68. Ta Nea, 7 August 2000.
69. Eleftherotypia, 9 August 2000.
70. Eleftherotypia, 8 September 2000.
71. Ta Nea, 7 December 2000.
72. Ta Nea, 6 July 2001.
73. Financial Times, 19 February 2002 and 6 March 2002.
74. Eleftherotypia, 22 February 2002.
75. Ta Nea, 7 December 2002.
76. Commission of the European Communities, 'Decision on Aid Granted by Greece to Olympic Airways', Brussels, 11 December 2002.
77. Ta Nea, 12 December 2002.
78. The Times, 12 December 2002;
79. Financial Times, 9 December 2002.
80. Eleftherotypia, 5 February 2003.
81. Eleftherotypia, 9 February 2003;
82. To Vima, 9 February 2003.
83. 60 more pilots agreed to be redeployed in the Civil Aviation Authority.
84. Eleftherotypia, 5 July 2003;
85. To Vima, 20 July 2003.
86. Eleftherotypia, 19 December 2003.
87. Court of Justice of the European Communities, 'Press Release on the Advocate General's Opinion in Case C-415/03', Luxembourg, 1 February 2005.
88. Kathimerini, 13 January 2005.
89. www.in.gr, 15 September 2005.
90. To Vima, 9 April 2006.
91. NET, 20 April 2006.
92. The divestment strategy was consistent with an array of potential solutions: placing OA under a major foreign strategic partner, seeking a foreign purchaser, and creating a new company as part of a radical restructuring plan. Each were intended to bring to an end the continuing drain on the state posed by OA's position; in that sense, they were indeed compatible with an end to state aids and the shift of OA to a fully commercial criteria of operation.
93. Two sets of rational behaviour, shaped by distinct (though overlapping) institutional conditions, produced an outcome that both had worked hard to avoid (K. A. Shepsle and M. S. Bonchek, Analyzing Politics: Rationality, Behavior, and Institutions, London, W. W. Norton & Co., 1997, p. 204.
94. J. Tallberg, 'Paths to Compliance: Enforcement, Management and the European Union', International Organization, 56: 3 (2002), pp. 609-43.