The 1970s found the Greek society moving in the maelstrom of
the colonels’ dictatorship, who tried to disguise the oppressive regime that they had imposed through strongly
expansionist economic policies (creation of high growth rates). A characteristic of that period was the generous
funding of various economic activities, in order to secure usually foreign investments. At the same time, the
adoption of a corrupt dominating pattern of economic relations (without giving any emphasis on competition and
productivity) created explosive inflationary pressures during the first years of the 1970s.
The international oil crisis of 1973 led to a general increase of goods and a two-figure inflation, which would
constitute an inherent phenomenon in Greek economy for decades. High recession affected sectors of activity, such
as building and construction, while emigrant and foreign travel exchange had been temporarily reduced along with
public investments. Enormous expenses on heavy military equipment meant that reforms in state infrastructure
(e.g. education, health) would be of a secondary importance. Conditions in employment would not develop normally
during the second half of the decade with unemployment rising, strike mobilizations intensifying etc.
With the international crisis of 1979 and the ensuing recession, inflation soared once more. In 1981, year
of change in the political scene, the country was in a state of stagflation, reduction of the real income of
employees and large budget deficits. The large number of private enterprises that had passed to the control
of the state, ‘the problematic’ enterprises as they were called, undermined any perspective of economic improvement
and growth, while debts from foreign loans cancelled any form of financial planning.