Economic Crisis, Troika and the Environment in Greece

Abstract

The article constitutes a preliminary attempt to address the effects of the current economic crisis on the Greek environment. The austerity policies and other conditions imposed by the Memoranda of Understanding with the troika of international lenders are undermining the progress made in the pre-crisis years in the framework of European Union (EU) environmental policy. The latter conflicts with the EU's new priorities in the context of the Greek bailout programme. Examples include the air pollution caused by fuel substitution following a vast increase in heating fuel tax, the escalating environmental conflict related to gold-mining investment, and the crumbling environmental management apparatus. Strictly monitored by the European Commission, European Central Bank and International Monetary Fund, Greece needs to carefully delineate the trade-offs inherent in the country's ‘new’ model of growth. Proper policies are needed to avoid natural resource depletion, environmental decay and further national wealth reduction in the years to come.

Keywords:

• Greece
• EU Environmental Policy
• Economic Crisis
• Troika
• Green Growth
• Environmental NGOs
• Memorandum
• Renewable Energy
• Environmental Action

The fallout of the global economic crisis, whose roots are to be traced to the United States (US) financial crisis of 2008, has impacted severely on Greece, a high-public-debt country of the European Union (EU) which has become the epicentre of global attention. Negotiations with the troika of international lenders—consisting of the European Commission (EC), European Central Bank (ECB) and International Monetary Fund (IMF)—are in continuous process and various centres of global economic influence are still forecasting Greece's default on its debt. Meanwhile, development has become a key issue, as without positive Gross Domestic Product (GDP) growth it will be difficult to service that debt. However, the austerity policies and other conditions of the Memoranda of Understanding signed by Greece with the troika threaten EU environmental policy goals in Greece.

Recovering from the economic crisis should not be at any cost to society and the environment. In the case of Greek environmental quality management, the lack of available resources is becoming intense, while price policies dictated by the troika have exacerbated air pollution in large cities. The price hike in heating oil as a state revenue-increasing measure, for example, has led people to burn (il)legal wood instead of heating oil—and in some cases other material—with harmful public health and environmental impacts. On the investment front, Greek governing elites, occasionally ‘assisted’ by the judiciary, have prioritised ‘developmental’ issues by arguing that environmental impacts are minor and under control. An example concerns the gold-mining operations in northern Greece which have led to a mounting contentious conflict over local environmental resources.1

Thus, the current crisis has forced the four-decade long debate on ‘economy vs. the environment’ to focus on questions regarding the consequences of this serious economic downturn on the environment and environmental policy, and whether there are robust environmentally sustainable strategies that can help Greece exit the crisis. Studying such questions is of special importance for Southern European states, not only given the fragility of Mediterranean ecosystems and the nature of their economies—which are largely dependent on tourism and local natural resources—but also due to their peripheral position vis-à-vis northern and core EU states. Furthermore, the EU and the IMF have assumed overwhelming powers of surveillance and policy constraints on debt-ridden, euro-based peripheral economies such as Greece (Bermeo & Pontusson 2012) whose governments had limited capacities to confront the crisis. Southern European governments, however, were not alone, since the crisis challenged all executive politicians and exposed the hollowed-out state's capacity to respond to financial markets, contagion effects and disappointed electorates; climate change added further to this challenge (Lodge & Wegrich 2012).

Although Greece has already entered its sixth year of the crisis, the environment has received only symbolic attention, overshadowed by the pressing economic priorities of both transnational and national power-holders. This paper constitutes an exploratory attempt to address the effects of the crisis, and the troika-led policies to combat it, on the progress made under European environmental policy harmonisation in pre-crisis Greece. It starts with a review of the scarce evidence of country experiences with past and current economic crises and then centres on whether the crisis will push Greece onto a better or worse environmental trajectory, or a more or less environmentally (un)sustainable path.

Lessons of Crisis

The East Asian Example

The experience of economic crisis in other parts of the world is a good starting point to inform our inquiry. The East Asian crisis of 1997–98 offers an example, although it was mainly a banking crisis lasting for just two years and became contagious only within that region.

Initially, all East Asian countries experienced some modest environmental benefits, followed, however, by high environmental damage (Siddiqi 2000). On the benefits side, there were reductions in the volume of pollution from reduced energy use, replacement of inefficient equipment with more efficient substitutes, and the building of infrastructure using cleaner fuels such as natural gas and renewable energy sources (RES). On the damage side, the crisis had negative impacts on forests as the demand for firewood, timber and agricultural land increased. Other adverse effects included threats to aquatic ecosystems and the marine environment due to environmental expenditure cuts and delays by many countries in implementing plans to build effluent treatment facilities.

Indonesia was a notable case, as in 1998 alone the country saw a 13 per cent decline in its gross domestic product (GDP). The crisis led to significant changes in the country's primary sector and to significant losses of protected forests and biodiversity (Dauvergne 1999; Pagiola 2001; Kato 2005; Gaveau et al. 2009). Agriculture and fisheries grew at the expense of natural forests and biodiversity. Deforestation was caused by overlogging and illegal logging, forest fires, transmigration and the conversion of forests to agricultural land. The process was also assisted by ample support to the mining sector. To cope with the crisis, the government issued an increased number of contracts for coal, nickel, diamond and gold mining and allowed intense non-homogeneous forest clearing by commercial interests to expand exports of rubber and other tree crops. The support given to the commercial fishing industry resulted in a dramatic increase in illegal fishing by poor households. Finally, illegal hunting led to severe consequences for wildlife conservation.

As the crisis subsided, these adverse environmental conditions in East Asia were not ameliorated. In almost all cases, governments and private investors pushed on further with business-as-usual scenarios. Rather than pursue longer-term environmental and financial sustainability, investment projects sought quick returns to compensate for the monetary losses made (Elliott 2011).

The Current Crisis

We will now turn to a review of available evidence on the environmental impacts of the current crisis in other countries and a discussion of environmentally sustainable paths to exit from it.

Output growth and pollutant loads are very often decoupled, yet many researchers believe that there exists a linear relationship between economic activity and emissions at least in the short term (see e.g. Bowen & Stern 2010). This would suggest that the crisis could offer short-term environmental benefits. The medium-to longer-term environmental effects depend largely on structural change policies. As in East Asia, in Latin America too the crisis has led to intense appropriation of natural resources, while the environmental dimension is considered a mere instrumental adjustment that generates the illusion of a benevolent capitalism (Gudynas 2010).

On the institutional front, the crisis has relaxed compliance with environmental regulations. In 2008 the European Council made modifications to its climate change policy, delaying the auctioning of carbon dioxide (CO₂) certificates in the EU-emissions trading system (ETS), as well as delaying CO₂ limits for automobiles until 2015 (Meyer-Ohlendorf et al. 2009). Five years later, in April 2013, with the price of CO₂ certificates very low due to the economic crisis, the EC submitted a bill to the European Parliament foreseeing the delay of certificate auctions and their sale at higher than market prices. The Parliament refused to pass the bill, which sent the price of certificates even lower, making them more attractive to the polluting industry and creating fears of impairment of the EU's climate change policy.2 In North America, the crisis led initially to an environmental deficit, as reflected in US government legislative actions (so-called ‘midnight regulations’) to relax environmental legislation (Klein 2009). Notable such regulations (a) allowed managers of confined animal operations to determine themselves whether they should apply for a waste discharge permit; (b) excluded certain hazardous secondary materials from the Resource Conservation and Recovery Act; (c) created exceptions to the buffer-zone rule, by allowing mountaintop coal-mining wastes to be deposited into perennial and intermittent streams; and (d) revoked Congressional authority to withdraw public lands from development under emergency conditions.

Civil society concern is a factor that weighs highly in environmental policy determination, but which has only recently received scholarly attention. During 2008–09, global public concern about climate change fell sharply, as it also did in the US in the context of the recession (Tienhaara 2010). The environment appears to be fading as a central issue in contemporary political debates. In the Netherlands, for example, a country where environmental concerns have been a political issue in the past, the environment played a very marginal role in the national election campaign of 2010, one of the main reasons being the public's concern about the economic crisis and the prospect of cuts in government expenditures (Van der Heijden 2010).

The current economic crisis is seen as a good opportunity for governments to boost the public-spending component of environmental policies with a focus on socially profitable investment in natural capital and its preservation (Bowen & Stern 2010). The crisis allows governments to do this at reduced financial costs and relatively stable environmental benefits. Several countries already use ‘green’ fiscal stimuli to implement programmes such as house ‘weatherisation’, energy efficiency in buildings, renewable energy technologies, and smart metering of electricity use. The proportion of fiscal stimuli devoted to environmental measures is difficult to calculate accurately. Any stimulus that promotes energy efficiency, and some forms of renewable energy, waste reduction and recycling, as well as various emission control technologies, could be termed ‘green’ (Berghäll & Perrels 2010). Ecological tax reforms are seen as viable green instruments and they should aim to tax environmentally burdening activities more and labour income less. However, environmental taxes are, in general, not good candidates for use as fiscal tools because they are likely to distort relative prices away from their shadow (true market) prices (Bowen & Stern 2010).

The Way Out: From Sustainable Development to Ecological Modernisation and the Green New Deal

Many of the proposed routes to exit the current economic crisis fall within the classic scientific debate on ‘economy vs. environment’, in which three main paradigms dominate: sustainable development (SD), ecological modernisation (EM), and green growth (GG) or Green New Deal (GND).

Since the 1970s, existing environmental policy fixes appear to have helped forge ideas embedded in EM and GND, based on technology in the industrialised world as well as research evidence on issues such as ‘environment vs. employment’. In the early 1980s, before the release of the Brundtland Report on SD, it was becoming clear that environmental policies and programmes in the industrialised Organisation for Economic Cooperation and Development (OECD) countries exerted an overall positive impact on employment and output growth (Lekakis 1991). This was due to the emergence of a new industrial sector producing environmental control technologies. That sector, which in the spirit of GND (see below) is green, was capable of better contributing to overall employment and GDP growth compared with the negative effects of lower competitiveness and labour lay-offs raised by environmental controls (Lekakis 1991; Goodstein 1999). It is for this reason that EM and GND appear to fit better the industrialised world.

Sustainable development was cast in 1987 as a smooth triangular flow of goods, environmental quality and social harmony. The vast array of SD interpretations which surfaced in the 1990s are depicted in four basic approaches (ideal, strong, weak and treadmill) moving from an ecocentric to an anthropocentric scale (Baker et al. 1997). A more recent typology offers six similar scales from neoliberalism's profit motive and high growth rates approach to a radical one focused on limits to growth and societal restructuring towards eco-communities (Davidson 2011).

In practice, more than a decade after its inception, SD has proved to be a symbolic concept, interpreted by national governments and transnational agencies as purely sustained economic growth (Baker 2007; Blühdorn 2011). Economists adopting either weak or strong SD perspectives agree that ecosystems are at risk and that increasing ecological scarcity signals the unsustainability of the current global economic development (Barbier 2011). Neoliberal proponents of market-oriented sustainability incorporate the environment into business and corporate planning (Redclift 2010). A notable shift has been occurring towards the economic dimension, as reflected in the new concepts adopted by the United Nations (UN) as an integral part of SD: sustainable growth and the ‘green economy’.3

Initiated in the early 1980s, the idea of EM was advanced more robustly in the early 1990s, placing critical importance on new ecologically designed products, environmental management, economic evaluation of environmental goods via eco-taxation, environment-inspired liability and insurance, and eco-labelling (Mol 2010). Strong and more transformative EM policies consist of increasing public control and pricing of environmental resources via taxation, cap-and-trade measures, prioritising renewable energy, more public transportation and organic farming (Feindt & Cowell 2010). Ecological modernisation, however, overlooks the North's exportation of high-polluting production to the South's less regulated, less industrialised economies and the accelerated exploitation of their natural resources (York, Rosa & Dietz 2010; Baker 2007). In the international market for environmental technologies, EM leading market countries benefit while laggard countries wishing to green their economies lose, since they must import these technologies (Feindt & Cowell 2010). Simultaneously, EM strategies do not address the social justice, wealth distribution and society–nature issues found in the Brundtland Report (Baker 2007).

The turn towards GND and GG approaches appeared before the global crisis.4 Defined as ‘targeted state investment in activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and ecosystems’ (Schepelmann et al. 2009, p. 10), GND aims to promote climate-change-oriented shifts in energy production and consumption, in the context of economic growth. Following the economic crisis, GG approaches have been embraced by industrialised countries and international organisations, even by green parties, as the new ecological industrial politics and as a ‘third industrial revolution’, centring on fiscal stimulus and environmental investment packages, especially in the energy sector. Nevertheless, as the OECD stresses, GG is not a synonym for SD, since the environment is mainly seen as a source of growth (Hammer et al. 2011).

Through green fiscal stimulus packages, GND is characterised by regulatory standards, state support and price mechanisms, which may lead to a weak EM path focused on sectors under crisis, thus slowing down essential ecological restructuring (Feindt & Cowell 2010). Debt repayment fiscal stimulus diverts policy strategies from those related to the environment. GND strategies become central for economic growth and if growth and supply credit fails, they may recreate past vulnerabilities (Feindt & Cowell 2010). Green economy frameworks are also seen as weak EM approaches by environmental non-governmental organisations (ENGOs), because investing in new economic activities and technologies will marginalise the social dimensions of sustainability (Davies & Mullin 2011).

‘Sustainable green growth’, as promoted by the G20 in 2010, cannot offer sustainable economic development given global ecosystem degradation and biodiversity loss, as well as the funding challenge for ecosystem conservation (Barbier, 2011). Rather than being a new paradigm, green economy practices push ecosystem use and degradation even further, and not towards a sustainable economy (Le Blanc 2011; Tienhaara 2010).

The EU Framework and Greek Environmental Policy

The economic crisis may be interfering with the EU's environmental policy while the Greek environment may be at risk under the troika-inspired austerity policies, some of which are not at all environment-friendly. There is no hard evidence that the EU is relaxing its stringent environmental standards due to the economic crisis. However, a few careful observations on the EU's initiatives indicate that other priorities may in fact interfere with its environmental objectives.

Before qualifying this argument, let us note that since the 1990s Greece has been heavily influenced by EU policies and that noticeable improvements have taken place across environmentally oriented institutions at the state and civil society level (Eder & Kousis 2001; Kousis 2004). Yet simultaneously, as a Southern European late comer and a ‘policy taker rather than policy maker’, Greece has neither the environmental policies nor the resources (funds, expertise, etc.) to contribute to European environmental policy (Börzel 2003). Such features are also generated by the different structural positions of southern and northern countries within the EU (Eder & Kousis 2001). Nevertheless, a significant variation in compliance is documented across all European member states and across different policies within one country (Börzel 2000).

The EU itself has embarked on a series of policy agendas that have prioritised growth over the environment, seen in a symbolic and declaratory commitment to SD embedded in its treaties (Baker 2007). The shift towards EM began with the White Paper Growth, Competitiveness and Employment (1993), calling for the development of clean technologies, gaining ground only during the past decade. Although EM was reflected in the Lisbon strategy, it was nevertheless criticised in 2004 by the Executive Director of the European Environmental Agency as a systematic effort by certain sectors towards further and more intense use of the global natural resources (Baker 2007).

Within the framework for a new EU strategic approach to the Cohesion Policy, the National Strategic Reference Framework (NSRF) was adopted for the period 2007–13. The Community Strategic Guidelines urge member states to use cohesion funds in order to promote ‘sustainable growth’, competitiveness and employment—rather than development—as set out in the renewed Lisbon agenda. Green growth, an important element of the EU's 2020 Strategy, adopted by the European Council in June 2010, aims to achieve jobs and smart, sustainable and inclusive growth.

There are a few important caveats to the EU's GG approach which require careful attention. To begin with, fiscal stimuli must be actually green and EU core countries must be the first to set the example. Germany's first and second stimulus packages feature a few problematic components: the car-scrapping scheme boosts short-term demand for new cars, but does not provide any incentives for the development of environment-friendly vehicles; support for transportation infrastructures is geared towards new roads rather than repair of existing ones; and no funds are earmarked for wastewater treatment facilities (Meyer-Ohlendorf et al. 2009). France's package is only around eight per cent green. Through a lump sum payment for every new car purchased, it subsidises both car production, independent of its environmental performance, and consumption (Meyer-Ohlendorf et al. 2009).

In addition, to sustain the EU's economic growth, green technologies must be produced within its borders, thus making the EU a protectionist economic bloc in a world of free trade. Regarding renewable energy projects, for example, while government support is not a very efficient way of creating additional short-run employment in high-income countries, the effects per unit of spending could be smaller in low-income ones when such projects, instead of helping the local industry, lead to increased imports of the new technology (Strand & Toman 2010). In fact, the evolution of global production and marketing processes of relevant systems—e.g. photovoltaic (PV)—is so dynamic that no certain conclusions can be guaranteed. China's PV production is the most dynamic compared with all other producers (Poulikkas 2010); simultaneously, competition on PV system prices will continue, caused by relentless pressure through low-cost manufacturing (Seeliger 2009). Competition is stiff, the Chinese being 44 per cent more cost-efficient, and market penetration at literally any cost will annihilate European profits. China accounts for 40 per cent of global production and sales, and although close to 80 per cent of raw materials and manufacturing equipment used in Chinese production are imported, more than 90 per cent of PV systems are exported to other countries (Poulikkas 2010).

It should also be noted that many green energy technologies are not necessarily environmentally sustainable. Hydroelectric projects have been historically regarded as ecosystem destroyers. The Boliden Dam rupture in southern Spain in 1998 and the now recognised environmental threats of the Four Rivers project in South Korea and China's Three Gorges Dam are notable examples. Geothermal energy projects bear serious environmental and social impacts too, such as those of the geothermal project on the Greek island of Milos in the late 1980s (Kousis 1993). Some biofuels may require more energy to produce than the energy they offer. A most recent report of the EC's Joint Research Centre (Marreli et al. 2011) reveals that green projects based on biofuels may have devastating impacts on the EU's biodiversity. The authors estimate that as a result of EU biofuel targets, about 85 per cent of biodiversity will be damaged across 17,000 square kilometres of natural habitats that risk being converted to farmland. Natural habitats will not be protected under current EU legislation for biofuels and it is likely to contradict EU's commitment to reverse biodiversity loss by 2020.

Finally, while the global recession did lead to substantial Greenhouse Gas (GHG) reductions in 2008 and 2009, the 2010 picture was different. GHG emissions increased by 2.35 per cent compared with 2009 for the EU15, mainly due to the recovery from the economic crisis (European Environment Agency [EEA] 2011a). GHG emissions from Greece, Ireland and Spain decreased but there was an increase from the UK and Germany (EEA 2011b). On a global scale, while CO₂ emissions decreased by 1.4 per cent in 2009, this reduction was more than offset by a 5.9 per cent increase in 2010, owing to strong emissions growth in emerging economies, a return to emissions growth in developed economies and an increase in the fossil-fuel intensity of the world economy (Peters et al. 2012).

Keeping the above in mind, the discussion on Greece must take into account two key elements of the EU as a source of policy development. First, since the 1990s the EU has significantly improved environmental policy and politics in Greece through legislative and funding opportunities (Kousis 2004). Inheriting this context, local and regional authorities now share in environmental policymaking and implementation, yet lack the required fiscal and administrative capacities and also evince signs of clientelism and corruption (Koutalakis 2011).

Second and most important, the EU has now taken a decisive new role through its participation in the troika of international lenders, drastically influencing Greece's growth and environmental conditions since early 2010. Greece and the troika signed the first Memorandum of Understanding in May 2010 (centred on internal devaluation and a series of taxes and accompanying the first Greek bailout programme) and the second Memorandum in February 2012 (furthering austerity and liberalisation measures, accompanied by the second bailout agreement including the debt-restructuring agreement entailing private-sector involvement) (Markantonatou 2013). Implementation of the Memoranda has been accompanied by a long series of legislative changes, including ones aiming to facilitate investments and boost the national economy.

The remainder of this paper examines the Greek case, focusing on: future pollutant emission trends; anticipated environmental impacts of structural change policies; impacts on the role and efficiency of environmental protection agencies; and the potential of GG measures to facilitate an exit from the crisis.

Troika, Austerity and the Greek Environment

Greece constitutes a particularly interesting case study of the relationship between economic crisis and the environment, given the extraordinarily rapid drop in economic growth which the country is currently experiencing as a result of rapidly contracting national consumption.

Short-Term Environmental Benefits for Greece?

Assuming a linear relationship between economic activity and emissions in the short term, so long as it lasts, the economic crisis in Greece may indeed generate some environmental benefits in the form of reduced damage owing to the release of lower loads of various pollutants from production and consumption activities. Table 1 shows per cent changes in production and consumption in Greece between 2006 and 2012, while Table 2 shows the intensity of four selected air and water pollutants during 2007–10. Of these four pollutants, sulphur dioxide (SO₂), an input to sulphuric acid and CO₂, is a known GHG, and total phosphorus and total nitrogen are known agents of river and lake eutrophication. Although all production and consumption items have been following a downward trend during the crisis years, especially 2009 and 2012 (Table 1), the load intensities of these four pollutants have not been decreasing uniformly over the crisis years 2008 and 2010, as Table 2 indicates.5

Table 1 GDP growth, 2006–12 (%)

Estimates	2006	2007	2008	2009	2010	2011	2012
Based on production
Production	6.3	3.5	− 1.5	− 2.9	− 8.0	− 6.9	− 7.2
Intermediate consumption	8.9	4.2	− 3.3	− 3.6	− 11.4	− 7.2	− 8.5
Gross value-added	4.1	3.0	0.0	− 2.2	− 5.2	− 6.6	− 6.2
Based on consumption
Final consumption spending	4.1	4.3	2.9	− 0.3	− 6.8	− 7.2	− 8.2
Households	3.9	3.7	4.7	− 1.9	− 6.4	− 7.9	− 9.1
General government	3.1	7.1	− 2.6	4.9	− 8.7	− 5.2	− 4.2
Gross capital formation	21.1	12.9	− 10.4	− 25.0	− 8.3	− 16.4	− 17.6
GDP at market prices	5.5	3.5	− 0.2	− 3.1	− 4.9	− 7.1	− 6.4
Source: Data published by the Hellenic National Statistical Service (www.statistics.gr). Data for 2008–12 are provisional.

Table 2 Economy-wide select air and water pollutant intensities (1,000 tons/billion € GDP)

Year	SO2	CO2	Total phosphorus	Total nitrogen
2007	1.127	191.0	0.004	0.015
2008	0.962	176.3	0.004	0.014
2009	0.865	164.7	0.002	0.007
2010	0.502	170.1	0.003	0.010
Source: Data from http://prtr.ec.europa.eu and the Hellenic National Statistical Service (www.statistics.gr).

The issue is what happens to total pollutant emission loads and concentrations in the longer term. One answer is provided by the 2009 Environment Ministry's report to the EC (Ministry of the Environment, Physical Planning & Public Works [MEPPPW] 2009), which lists projections of GHGs under certain growth scenarios and separate packages of measures up to 2020. According to the report, emissions tend to increase in general as a result of anticipated positive GDP growth. Nevertheless, forecasts of real GDP growth in Greece until 2015 diverge significantly, as Table 3 shows.

Table 3 Real GDP growth forecasts for Greece, 2012–15

Forecast by	2012	2013	2014	2015
IMF^*	− 6.0	− 4.0	2.1	2.7
Citigroup†	− 7.2	− 7.4	− 11.8	− 3.7
E&Y/Oxford Economics‡	− 6.4	− 5.2	− 0.1	0.6
* www.imf.org/external/country/GRC/index.htm
† https://ir.citi.com/mqeOWwdfuIhTipFGBmwmXnIJaqm7LFATmmZlGc64vTeE%2F3X9ERaC7w%3D%3D [estimates draw from citi forecasts that Greece will default]
‡ http://www.ey.com/Publication/vwLUAssets/EEF_Sprin2013_Greece/$FILE/EEF_Sprin2013_Greece_LH_V4.pdf

On the basis of such forecasts and the likelihood that additional austerity measures could bring their levels down, we can draw no definitive conclusions about the future growth of any pollutant emission category in Greece.

Although GDP growth is not easily predicted, the Memoranda of Understanding the Greek government has signed with the troika have various observable impacts on environmental quality. The second Memorandum package, for example, demanded an increase in the price of heating fuel as a state revenue-raising measure. This has led to a massive substitution of central heating oil with wood, other fuel and, by some, even dangerous but available materials including, for example, old furniture and plastics. The result has been a new smog over Greek cities on all cold nights, containing particulate matter (PM2.5), sulfur dioxide, carbon monoxide and other harmful pollutants, at least five times higher than acceptable levels (National Observatory of Athens 2013), with considerable health and climate effects. However, at the time of writing in April 2013, the troika has so far refused to allow this tax to be reduced, despite the fact that as a revenue-raising measure it has not brought the expected results.

Structural Changes and the Environment

Greek governments have historically tried to invigorate GDP growth via structural policies that are not well studied or planned and tend to operate at the expense of the environment. One classic example is the support for intensive agriculture and the diversion of the river Acheloos to irrigate the Thessaly plains with financial assistance from the EU (Close 1998; Houck 2010; Koutalakis 2011). The Acheloos case remains highly controversial, given that such policies and projects are in direct conflict with fragile local ecosystems and EU's Natura 2000 protected zones. Even though in September 2012 the European Court of Justice ruled on 14 inquiries by the Council of State (the highest Greek administrative court), a coalition of five Greek ENGOs voiced concerns about the huge costs of the project in times of austerity (World Wildlife Fund Greece [WWF-GR] 2012a). Another example concerns the generous state funding supporting large infrastructural projects for the 2004 Athens Olympic Games, which impaired public finances and impacted negatively on local ecosystems (Tsaltas & Rodotheatos 2011).

Greece's (in)visible priorities on economy vs. the environment are in doubt, yet its efforts to meet its environmental obligations and institutional commitments to the EU and the UN should also be noted. The question is whether the crisis is going to affect this pattern. The answer is difficult to decipher, for it will depend on the types of structural change policies to be pursued in response to the Memoranda of Understanding. The road is a challenging one, since during past economic crises most countries have adopted structural changes that have led to devastating environmental impacts.

As Greek austerity policies and troika measures proved ineffective to combat the financial crisis, a June 2011 cabinet reshuffle led to the replacement of the Environment Minister by the former Minister of the Economy. In his first speech to the Greek parliament the new Environment Minister stated, ‘Green Development is first of all—and beyond all Development, with a capital D. Development that will create jobs, that will transform the advantages of our country into a source of wealth.’6 This public statement underscored the government's urgent and high development priorities.

The environmental effects of an intensive and widely publicised government agenda for the potential exploitation of air, land and water resources, through fast-track investment projects, may be nature-offensive despite legal requirements for environmental safeguards. Mining, gas and oil extraction projects, which feature high on the governmental agenda, are all known for their capacity to produce environmental threats. In addition, these projects appear to be economically unsustainable under the current legislation, which, unlike the norm, foresees a flat one per cent royalty across all mining activities. For some activities, like gold extraction in northern Greece, projects are rather provocative, given that other countries (e.g. in Africa) have legislated a five per cent-gold mining royalty (Gajigo et al. 2012). The expected environmental, health and economic impacts of gold mining in the birthplace of Aristotle have led local communities to mount sustained mobilisations; they are supported by members of the scientific community.7 Yet Greek governing elites as well as a March 2013 Council of State decision concerning gold mining have prioritised ‘developmental’ issues, claiming that the environmental impacts are minor and under control.

The existing lack of coordination across government agencies is likely to increase under the crisis, due to the restructuring of the public sector and drastic personnel cuts. Until June 2011, the Ministry of the Environment did not play its envisaged coordinating role aiming to integrate the environment into all policies and sectors. Development or economy-related ministries, bound by Economic Adjustment Programme commitments, have been submitting legislative proposals aimed to destabilise environmental legislation, disregarding the conservation needs of ecologically important areas (WWF-GR 2011; 2012b).

In contrast to their competitive relationship in the 1990s (Koutalakis 2011), core ENGOs have now united to confront the sweeping changes resulting from the structural adjustment and austerity policies that are threatening environmental protection. As seen in Table 4, the ten large ENGOs or ‘10 sisters’ oppose the drastic changes to environmental protection legislation and infrastructure.8 The claims listed in the table are not exhaustive but indicative of the important environmental issues raised.9

Table 4 ENGO networks’ areas of concern, environmental claims on structural change policies, and targeted governmental agencies, 2009–12

Year	Targeted actor	Areas of environmental concern	No. of ENGO allies	Claims by challenging ENGO network
Legislative changes threatening environmental protection
2011	Ministry of Environment, Energy and Climate Change (MEECC)	Legislative proposal on construction in Natura sites	10	Threatens sustainability of protected Natura areas
2011	MEECC	Key environmental issues needing attention to safeguard a sustainable economy	11	Letter of concern on: easing of environmental permits; biodiversity; energy and climate change; urban planning; funding cuts of environmental agencies
2011	MEECC and two local governments	Removal of hunting prohibition in 2010 and 2011, Macedonia and Epirus Regional Authorities	10	Threatens environmental protection of the Wetlands National Park of Amvrakikos
2011	Government	Removal of the ban on diesel in Athens and Thessaloniki	10	Threatens environmental quality
2011	Government	Revision of Law 4014/2011 legalising illegal buildings in traditional communities	10	Threatens ecological sustainability
2011	MEECC	MEECC Environmental Law	10	Eases the construction of buildings in protected areas
2011	Government	Revision to use up to 95% of the new Green Fund for state needs	10	Effective abolishing of the Green Fund, which was to support environmental protection
2012	MEECC	Draft Law on Waste Management	4	Diverts significantly from the aims of the related EC Directive 98/2008
Funding cuts and restructuring of environmental agencies
2011	MEECC	Key environmental issues needing attention to safeguard a sustainable economy	11	Letter of concern on: funding cuts of environmental agencies; easing of environmental permits; biodiversity; energy and climate change; urban planning
2012	Ministry of Administrative Reform and Electronic Governance (MAREG), MEECC	Merging management agencies of protected areas	11	Threatens the 29 protected areas related to the environmental management agencies
2012	Government, troika	Transfer: Forest Secretariat from MEECC to Ministry of Rural Development and Food (MRDF)	10	Threatens forest protection, taking steps backward in environmental policy and its implementation
Non-implementation of environmental laws
2009	Government	Waste treatment strategy	4	Need to implement environmentally sustainable system of waste management at the municipal level
2010	MEECC, MRDF	EC Directive 1967/2006	6	Request for the implementation of the EU directive to stop aggressive and prohibited fishing methods.
2011	MITN	Request of €14.5 million from the state for maintenance of Acheloos diversion project	5	Threatens the environment and is against Supreme Court ruling on the ceasing of the diversion's construction
2012	MEECC	Illegal waste facility in National Marine Park	4	Threatens protection of Caretta caretta's protected area in Zakynthos; call for state action
Other concerns and proposals for environmental legislation
2009	Government	Proposal for biodiversity legal framework	10	Need to fill important gaps in existing legislation
2010	Prime Minister	Ecologically sustainable development	8	Concern about development and environment issues (e.g. burned forests)
2011	Ministry of Interior, MEECC	Keratea community resistance and waste management	4	Proposal for alternative sustainable waste management, taking into account high resistance of Keratea community to the planned waste facility
2011	Local and central government	Attica free from waste	4	Proposal for low-cost and high-environmental-benefit system for waste management in Attica.
2011	Government	Water culture ministerial decree disregards opinion of National Council of Urban Planning (NCUB) and SD	10	Ignoring the opinion of the NCUB and SD is likely to increase tension given the competing activities of tourism, fishing and fish culture.
2012	MEECC	Public right to environmental information, mines	2	Information access request for residents of Sapes on gold and other ore mining permits
2012	MEECC, Athens Agency of planning and environmental protection	Draft Law on Attica Zoning Plan	5	Concern about the delay in the processing of draft law for approval by Parliament
Notes: Allies: e.g. 10 ENGO ‘sisters’: WWF-GR, Greenpeace, Hellenic Ornithological Society, MOm, Mediterranean SOS Network, Hellenic Society for the Protection of the Environment and Culture, Archelon, Arkturos, Callisto and Hellenic Society for the Protection of Nature. The eleventh ally NGO is the Ecological Recycling Society (ECOREC). Networks of 2–8 ENGOs are combinations of the aforementioned organisations.

Under troika policies, major concerns centre on legislative changes, budget reductions and the restructuring of environmental agencies, and the non-implementation of environmental laws. Table 4 also illustrates the diversity of environmental issues from biodiversity and waste treatment to illegal buildings and renewable energy legislation. For example, core ENGO coalitions hold Parliament liable for easing the construction of buildings in protected areas, thus exposing protected areas and biodiversity, and annulling previous protective measures. Similar concerns are voiced in relation to measures taken to promote renewable technologies, allowing the construction of energy installations in protected areas through fast tracking, or exemptions from the required environmental impact study (WWF-GR 2011; 2012b).10

Finally, Parliament's Special Committee on the Environment defies the resurfacing of the old-fashioned faulty view that, in times of economic crisis, environmental protection is a luxury and hindrance to development. Its 2012 report cites as an example the former national airport site, Hellinikon, the development of which has been left to the candidate investors' own discretion, instead of being incorporated into a broader spatial and development planning framework.11

Less Effective Environmental Protection?

Since the late 1990s, Greece has witnessed some positive institutional changes, including the establishment or creation of: the Greek Ombudsman; the National Centre for Environment and Sustainable Development; the Special Environmental Inspectors Agency; the Special Directorate of the Environment; a new body of Energy Inspectors in the Office for the Prevention and Reparation of Environmental Damage in the new Environment Ministry; and the Special Permanent Parliamentary Committee for Environmental Protection (Tsaltas & Rodotheatos 2011).

During the past two years, however, many of these institutions, along with existing ones, have run the risk of inefficiency, given severe cuts at a time when the environment is viewed as an economic asset. The government's GG programme includes the improvement of environmental governance mechanisms and institutions.12 However, this seems pure rhetoric, as the new Green Fund established in 2010 was in practice short-lived. In October 2011, a revision allowed the use of up to 95 per cent of the Fund to cover other, urgent state needs (see also Table 4). In 2012, another revision further increased this use to 97.5 per cent (Ministry of Finance 2012).

The lack of sufficient funding and the subsequent inadequately staffed environmental protection services under the Memoranda are great obstacles to the implementation of the relevant legal provisions. This applies to all government departments and units (national, regional, local) and is clearly evident in the forest state agencies, undermining successful ecological forest management, and in the operation of the country's 28 management bodies for protected areas (WWF-GR 2010; 2011; 2012b). The same is true for the National Marine Park of Zakynthos13 established to protect the turtle Carretta caretta (Haila et al. 2007).

Loose forest protection is leading to more illegal logging and forest fires and, thus, to possible deforestation. Illegal logging was a minor problem in Greece before the crisis, and forest fires have been very destructive to the country's forest resources. Forestry department heads in northern Greek prefectures14 expressed the following concerns. Illegal forest logging activity saw a slight increase in 2011. Reduced government funding for operational expenses along with staff exodus from the civil service are leading to the less effective operation of the forest ranger corps. Given that forest rangers carry out forest policing and protection tasks, any threats of forest resource destruction arising from either wildland fires and/or illegal logging activities will become much more serious in the coming years.

As diesel oil prices escalate, the relative value of firewood changes, intensifying illegal logging. Increases in diesel oil prices have been mainly a result of high fuel taxes introduced by the government. Diesel oil is used as fuel both in central heating and in transportation, yet its price as a heating oil had until recently been kept lower, serving as a social policy instrument. However, under the second Memorandum, the prices of diesel oil for heating and transportation were equalised. The higher diesel oil prices coupled with shrinking household budgets forced thousands of families across Greece to replace diesel with other substitutes for their heating needs during the winter of 2012–13. Among other heat sources, old wood-burning stoves and fireplaces are seeing a revival, creating a profitable market for sellers of firewood. Forest managers fear that in the light of a weakening forest ranger service, illegal logging will be almost impossible to control, especially during the weekends, when most illegal logging takes place.

The Potential of Green Stimuli–Green Growth Measures

The idea of GG, which dominates the EU's ‘new growth model’, is well known to Greece. In fact, Greece may be considered a pioneer in this area. During the recessionary period of the 1980s, public-sector-financed environmental projects and programmes generated employment and output, both directly as a result of increased aggregate demand for goods and services and indirectly via mechanisms responding to primary effects. Several green projects contributed to sustaining employment and GDP during that period. The building of the Psytallia wastewater treatment facility serving the Greater Athens region, the establishment of municipal enterprises for water supply and sewage, the building of vehicle inspection stations for all vehicle categories, and the forest fire-fighting programme constitute notable examples of such green programmes. Without that government green stimulus package, the average unemployment rate would have been 8.66 per cent, compared with the 7.71 per cent realised. Therefore, green projects/programmes reduced unemployment by 0.95 per cent during 1983–87 (Lekakis 1991). This figure constituted a lower-bound estimate, as only expenditures through the Public Investment Programme were used, not accounting for any favourable effects of restored ecological imbalances on productive capacities of land- and water-related processes. However, in 1983–87 the budget deficit rose from 11.2 to 16.5 per cent of GDP, chiefly as a result of increased government investment expenditure.

Greece continued to use green stimuli in the 1990s, and especially the 2000s. Law 3299/2004 stipulates state support for green projects, including: organic farming, in-house livestock farming and modern technology aquaculture; production of biofuels or solid fuels from biomass; production of electricity from RES; desalination of seawater or brackish water to provide drinking water; relocation of tanneries from large urban centres to special industrial zones; environmental protection, reduction of pollution of all types and restoration of the natural environment; projects harnessing renewable energy sources, substitution of liquid fuels or electricity with gaseous fuels, processed waste materials from local industries, waste heat recovery and co-generation of electricity and heat; projects for energy savings excluding production equipment; projects for the establishment, expansion and modernisation of laboratories of applied industrial, mining or energy research; and projects importing and adapting environment-friendly technologies for manufacturing processes.

All of these projects received financial support composed of 70–80 per cent national funds in 2005–07 and essentially EU funds thereafter. Table 5 shows government funding for green projects following the passage of Law 3299/2004. Three major points emerge for the 2005–11 period. Firstly, green investment constitutes about a quarter of total investment with most of it concentrated in the RES category. Secondly, the green stimulus package exceeds those included in the packages of core EU countries such as France. Thirdly, additional employment generated by green investment is meagre and thus less socially sustainable, falling greatly behind other types of investment.

Table 5 Green investments (2005–11)

Green project category	No of projects	Total investment cost (million €, actual)^*	Total subsidy (million €)^*	No. of new jobs created
Organic farming, etc	104	205.1	85.8	204
Biomass for biofuels	16	61.0	28.1	63
RES	1,898	4,750.4	1,721.0	533
Desalination of seawater	2	1.4	0.5	3
Relocation of tanneries	0	0	0	0
Reduction of pollution, etc.	27	195.8	70.0	86
Harnessing RES	35	256.6	96.2	151
Energy savings	4	1.6	0.7	2
Modernisation of laboratories	3	18.5	8.6	52
Environment-friendly technologies in manufacturing	4	10.3	3.7	0
Total of green projects	2,093 (21.2)	5,500.7 (26.0)	2,014.6 (23.4)	1,094 (2.8)
Total projects	9,866	21,175.4	8,591.8	39,250
* Based on data supplied in January 2012 by the Secretariat General for Investment and Development, Ministry for Development ([e-mail]). Numbers for investment costs, subsidies and percentages have been rounded. Numbers in parentheses are percentages of total projects items).

Turning now to the current challenge, the 1980s experience of GDP growth via green investment projects cannot be repeated, given the bad financial state of the public sector. In addition, GG initiatives by themselves cannot take Greece out of the crisis, as green stimuli packages are only a fraction of the total stimulus, let alone that such packages now depend entirely on EU funds.

One major policy instrument for what the Environment Ministry calls ‘green SD’ is the enactment of Law L3851/2010 oriented towards renewable energy consumption and production and energy efficiency (Ministry of the Environment, Energy and Climate Change [MEECC] 2010). The targets set by the law aim at a drastic increase in utilisation of renewable energy sources (up to 40 per cent in electricity production in 2020) and a significant decrease in energy consumption (20 per cent by 2020, which is higher than the mandatory level of 18 per cent set by Directive 2009/28/EC). A central role in this policy is given to the Public Power Corporation (PPC), the Centre for Renewable Energy Sources and Saving (CRES) and the Regulatory Authority for Energy (RAE) (MEECC 2010).

The growth-enhancing potential of RES depends on many factors, one of which is Greece's capacity to produce and market relevant technologies. Below are preliminary summaries of the current market conditions for PV, wind power, biofuel and geothermal energy technologies.

Photovoltaics. Photovoltaic systems are enjoying the highest feed-in tariffs (FIT) and were thus excluded from direct state financial support by Law 3908/2011.15 While FITs were enacted in such a way that they will decline over time, they continue to be attractive enough to sustain demand for PVs. The market for PV systems in Greece is growing at a fast pace, but is dominated by countries with strong sectors of industrial PV production, while Greece is dependent on PV imports. A group of five Greek companies are active in the construction of PVs, with a production capacity of about 250 MWp of PV modules per year (Tselepis 2011). Currently, the largest PV market share is held by China (around 80 per cent), followed by the rest of the EU (about 10–12 per cent), Greece (5–10 per cent) and others (2–3 per cent).16 At the end of 2012, the Greek producers received fast-track approval for a 250 MWh PV installation project. They will use domestically produced systems and thus substantially increase their market share.17 However, the market is so dynamic that no sure predictions can be made for the future.

Wind power. Currently the largest market share (50.0 per cent) is held by Denmark, while Spain, Germany and the Netherlands control the remaining 50 per cent. Financing remains an impediment to wind power development.18 China is now emerging as a potential competitor.

Biofuels. The biofuels market is controlled entirely by a group of 13 Greek biodiesel plants. They use oils (basically sunflower oil) which are converted into biodiesel through a simple and non-energy intensive chemical process. These companies help not only to enhance the available stock of liquid fuel, but also to support agricultural income. At present, only 50 per cent of the sunflower oil used by these plants is locally produced, because the flow of supply is not smooth (too many small Greek producers). The companies would operate more efficiently if they could negotiate with only one or two agricultural cooperatives.19 The contribution of biofuels to output growth is bound by diesel consumption, as only five per cent of biofuels can legally be mixed with regular diesel.

Geothermal Sources. Still a Poorly Developed Market

Based on the above, the GG potential for Greece promised through RES raises questions regarding the survival of local producers of relevant technologies. At the same time, the implementation of some green measures may also be problematic, both economically and environmentally. Serious questions can be raised about land clearance and occupation by solar and/or wind farms in geographical areas that have a capacity to contribute to growth in terms of either value-added (e.g. some agricultural or tourist product) and/or the preservation of natural ecosystems. Solar energy systems, for example, can and should be installed only in a way that will serve the electricity needs of an animal husbandry farm or a tourist or other business installation while also being in harmony with the environment.20

Unfortunately, such an ecologically sustainable pattern of RES is not always the norm. Especially since 2010, following citizens' complaints regarding the siting of wind farms, the Greek Ombudsman has emphasised four significant issues: (a) the protection of Natura 2000 areas, (b) environmental compliance, (c) the protection of investors' trust in renewable energy sources and (d) environmental impacts.21

Grassroots community activists against wind farm projects on Aegean or Ionian islands or Crete, as well as in the regions of Sterea Ellada or the Peloponnese, have organised both on- and off-line appeals and sometimes confrontational actions.22 The activists, being fully dependent on local natural resources to sustain pluri-activity involving agriculture, animal husbandry and tourism, point to the unsustainability of these GG projects, which fail to meet the needs of communities while simultaneously impacting negatively on wildlife and protected areas. Related networks were created including Windwatch.gr, the Panhellenic Committee against Industrial Wind Farm Installations and the Cretan Struggle Network against industrial-scale renewable energy projects.23 In addition, a large number of appeals were submitted to the Council of State (Yiannakourou 2011).

The exploitation of geothermal fields on Greek islands such as Milos dates back to the 1980s. Although local communities initially welcomed these initiatives, they subsequently turned against them due to negative environmental and public health impacts (Kousis 1993). As similar concerns are currently resurfacing, the municipal council of the island voted against a ministerial decision authorising PPC-Renewables to exploit these fields.24

Energy and tourism are the top two key production sectors in Greece's new growth model, according to a recent detailed report prepared for the Association of Hellenic Banks and the Hellenic Federation of Enterprises (SEV) (McKinsey & Co. 2012). It appears, therefore, in view of community activism against certain forms of RES technologies in rural and coastal areas, that the implementation of growth strategies in the tourism and energy sectors should be carefully planned according to environmental criteria.

Unlike reactions to wind farms and other forms of RES, the public has responded positively towards the energy-efficient buildings programme, which started in February 2011. With a total budget of €396 million from the EU's National Strategic Reference Framework, the programme subsidises the transformation of energy-intensive buildings into energy-efficient ones. Available subsidies amount to either 35 or 15 per cent of total investment, depending on income brackets. In January 2012, around a fifth of the programme's budget (€83 million) was claimed/received by 8,300 recipients.25 While the programme is well managed, the anticipated amount of investment per year (around €400 million) constitutes approximately only 0.1 per cent of the country's GDP.

An Overall Account: Genuine Savings

An overall account of Greece's future prospects may be drawn using the Genuine Savings Index (GSI). The index measures the true rate of savings in an economy, by taking the sum of net national savings plus investment in human capital and then subtracting the depletion of natural resources and pollution damage. It makes the growth–environment trade-off very explicit, although its main flaw is the assumption of substitutability between human-made and natural capital. A negative GSI implies foremost a decline in total wealth. When a country plans to use economic policies to grow today and protect its environmental resources tomorrow, its wealth will inevitably diminish.

Table 6 shows individual index items and GSI values for the years 2006–10 (for which data were available) as per cent of gross national income (GNI). From 2007, the decline in GNI led to lower gross savings and higher consumption of fixed capital and thereby negative net national savings. Genuine savings also follow a negative trend although marginally milder, as the negative impact of environmental resource decay (which does not include forest depletion) has been offset by the steadily positive investment in education.

Table 6 Genuine savings for Greece, 2006–10

Item as % of GNI/year	2006	2007	2008	2009	2010
Gross savings^*	13.15	10.39	7.47	5.17	4.76
Consumption of fixed capital†	12.49	12.55	12.96	14.75	13.63
Net national savings	0.66	− 2.16	− 5.49	− 9.59	− 8.88
Education expenditure	3.25	3.25	3.25	3.25	3.25
Forest depletion	NA	NA	NA	NA	NA
Mineral depletion	0.11	0.16	0.07	0.04	0.08
Energy depletion	0.09	0.13	0.31	0.14	0.22
CO2 damage	0.26	0.24	0.22	0.23	0.24
Particulate matter damages	0.55	0.54	0.54	0.52	0.52
Genuine savings	2.88	0.01	− 3.37	− 7.27	− 6.69
Source: Data from www.worldbank.org
NA =  not available.
* GNI – (public and private consumption + net current transfers).
† The decline in the current value of the stock of fixed assets as a result of physical deterioration, normal obsolescence or accidental damage.

Under troika policies, however, future GSI values will be influenced even more negatively by expected lower investment in education and accelerated depletion of environmental resources.

Conclusions

As seen in other countries hit by previous economic crises (see e.g. Siddiqi 2000), Greece may be witnessing some environmental benefits owing to lower pollutant emission loads from reduced conventional economic activity. These benefits, however, may be short-lived, depending on the mix of policies and how quickly this Southern European country will recover from its deep recession. Unexpected pollution incidents such as the new smog in Greek cities should also be accounted for.

The key to the fate of the environment under this crisis lies in the type of structural changes that are occurring in the economy. The experience of East Asian and Latin American countries (Dauvergne 1999; Gudynas 2010) indicates that such changes have led to pervasive environmental impacts, especially when it comes to the intensifying exploitation of forest and mineral resources. Greece has not yet felt such impacts, but the course of government action, the troika Memoranda and the reactions of ENGOs indicate that the country may eventually be moving in that direction, back-tracking from the pre-crisis progress made under EU environmental policies. The continuous production of new pro-growth-oriented legislation may facilitate and speed up investment activity at the expense of environmental protection, while simultaneously relaxing environmental controls, something that is observed even in core developed countries (Klein 2009).

As in other crisis-ridden countries, in Greece too environmental policy implementation is in jeopardy as, given the austerity policies implemented under the Memoranda, funding for responsible agencies becomes scarce while the forced exodus of valuable civil servants, with the aim of reducing the size of the state, weakens environmental administration and surveillance mechanisms.

To exit the crisis, Greece will inevitably follow EU's growth model, a strategy of environmental management oriented towards GG, albeit as an importer of environmental technologies. In a globalised competitive world, countries leading in the production and export of such technologies will be the beneficiaries and Greece is not part of this group of countries. Policies targeting the energy sector via state investments may lead to weaker environmental management paths, and Greece is a country that was following such policies before the appearance of this paradigm. More importantly, in times of crisis GND policies are likely to marginalise the social and ecological dimensions of sustainability (Feindt & Cowell 2010; Davies & Mullin 2011). The negative social and ecological impacts of industrial-scale and export-oriented wind farms, for example, appear to be important for rural island and coastal communities of southern Greece.

Greece cannot use the crisis as an opportunity to increase public spending on green investment and increase natural capital, as suggested by some researchers (Bowen & Stern 2010). It must, however, delineate carefully the trade-offs inherent in the country's new model of growth. Tourism and energy, the two sectors whose development could take Greece out of the recession, appear to be in conflict, since the energy sector must rely on industrial-scale investments across the country's rural and marine landscapes. Tourism's trade off vis-à-vis mining, gas and oil extraction projects, which feature high on the governmental agenda, must be carefully considered, given the latter's potentially high environmental impacts.

The environmental impacts of the current crisis constitute part of a wider spectrum of outcomes. As noted by Bermeo and Pontusson (2012), the EU—as the leading participant in the troika—has assumed overwhelming powers of surveillance and policy constraint over Greece. The crisis has challenged the Greek executive and exposed the hollowed-out state's capacity to respond to financial markets, contagion effects, disappointed electorates and climate change, as it has in other countries (Lodge & Wegrich 2012). Without proper government initiatives, resisting the panic the troika has instilled in the Greek executive and the judiciary, Greece may see its total wealth diminishing in the years to come and the environment will be a major factor in this.

Acknowledgements

We are grateful to all those who have offered helpful information and data, as well as to the University of Crete Special Account for Research (project no. 1693). We deeply thank Susannah Verney and Anna Bosco, editors of South European Society and Politics, for their useful comments and advice as well as the journal's anonymous referees for valuable and constructive criticism.

Notes

 [1] http://www.greenmediabox.eu/archive/2013/01/24/pressconference/ http://europeangreens.eu/news/greece-chases-fools-golden-rescue-their-crisis http://www.huffingtonpost.com/huff-wires/20130309/eu-greece-gold-mine-protest/?utm_hp_ref = business&ir = business (accessed 21 April 2013).

 [2] http://www.spiegel.de/international/europe/european-parliament-rejects-reform-of-carbon-emissions-trade-a-894842.html (accessed 20 April 2013).

 [3] http://www.un.org/News/Press/docs/2011/sgsm13867.doc.htm (accessed 20 April 2013).

 [4] The term GG was first coined by the Republic of South Korea at the ‘Ministerial Conference on Environment and Development in Asia and the Pacific’, 23–29 March 2005. GND first appeared in Friedman (2007).

 [5] The slightly higher phosphorus and nitrogen intensities are coincidental due to a higher load of domestic pit sewage delivered to the Metamorphosis segment of the sewage treatment facilities.

 [6] Hellenic Parliament, 21 June 2011, speech by Minister G. Papakonstantinou, available online at: http://www.hellenicparliament.gr/UserFiles/a08fc2dd-61a9-4a83-b09a-09f4c564609d/es20110621.pdf (accessed 10 December 2012).

 [7] Interdisciplinary Centre for Aristotle Studies (Aristotle University of Thessaloniki), press release, 20 March 2013, available online at: http://www.ccf.auth.gr/news/press/15615 (accessed 8 April 2013).

 [8] WWF-GR, Greenpeace, Hellenic Ornithological Society, MOm (NGO focusing on the Monachus monachus seal), Mediterranean SOS Network, Hellenic Society for the Protection of the Environment and Culture, Archelon, Arcturos, Callisto and Hellenic Society for the Protection of Nature.

 [9] Information on ENGOs and the crisis offered by T. Nantsou of WWF-GR and N. Haralambides of Greenpeace is gratefully acknowledged (telephone interviews, 7–20 January 2012].

[10] http://www.wwf.gr/index.php?option = com_content&view = article&id = 683:2010-04-26-10-25-52&catid = 70:2008-09-16-12-10-46&Itemid = 90

[11] http://www.capital.gr/NewsPrint.asp?id = 1389382

[12] www.eea.europa.eu/soer/countries/gr/national-and-regional-story-greece

[13] http://www.archelon.gr/files/2011_ARCHELON_ZAK_Short_Report.pdf

[14] Based on brief telephone interviews (December 2011).

[15] FITs are the prices per MWh of electricity paid by the Public Power Company for purchases of electricity from other producers using RES.

[16] Personal communication, Stathis Tselepis (Researcher, Photovoltaic Systems & Dispersed Production), CRES, Athens (December 2012).

[17] Personal communication, Stathis Tselepis (December 2012, March 2013).

[18] Personal communication, Fragiskos Mouzakis, (Wind Energy Department Head), CRES, Athens (December 2012).

[19] Personal communication, Myrsini Christou (Biomass Department Head), CRES, Athens (December 2012).

[20] Personal communication, EPIA. Eleni Despotou, its Deputy Secretary General and initial proposer of the famous HELIOS project, reiterated that she was expecting PV panels to occupy mainly abandoned Greek lands with no alternative production potential (December 2012).

[21] December 2011 statement: http://www.synigoros.gr/perivallon/fysiko_06.htm (accessed December 2012).

[22] Based on information from the following websites (accessed December 2012): http://stopaiolika.blogspot.com/2010/05/stop.html; http://www.aioliko.com/; http://aiolikoparkokoronou.blogspot.com/; http://aiolikaparkanaxou.blogspot.com/; http://stopaiolika.blogspot.com/; http://troizinia-aiolika.blogspot.com/; http://eyploia.gr/; http://www.karpenissi.eu/; http://apopigadi.blogspot.com/; http://windwatch.gr/; http://www.kandanos.eu/; http://www.phoenix-crete.org/index.php?id = 126

[23] Eight communities of the Pancretan Network against Industrial Renewable Energy Sources participated in the litigation to the Council of State (Nea Kriti, 27 September 2012): windwatch.gr/forum/t-247488/eleytheri-i-egkatastasi-aiolikon-parkon; http://ecolarissa.blogspot.com/2011/09/blog-post_663.html

[24] http://www.neaenergia.gr/index.php/eidiseis/geothermia/neo-oxi-tis-milou-sti-geothermia.html (accessed December 2012).

[25] Based on information supplied by MEECC.