Economic policies of Andreas Papandreou

The economic policies of Andreas Papandreou during his terms as Prime Minister of Greece (1981–1989 and 1993–1996) represented a significant restructuring of the economy of Greece, which was under pressure from 1970s oil crisis and the increased competition by its entry to European Economic Community (EEC) in 1981.

Papandreou's government pursued expansionary, populist, and redistributive measures designed to promote social justice and strengthen state-led development. However, these policies also created substantial macroeconomic imbalances, particularly in the areas of public debt, unemployment, and inflation. Moreover, his populism, under the guise of inclusionist social policies, became part of his political party's (PASOK) patronage, greatly expanded through the misuse of EEC funds and an unprecedented rate of foreign borrowing, which brought the Greek economy to the verge of bankruptcy.

At the beginning of his second term (1985–1989), Papandreou introduced a set of austerity measures tied to an EEC loan intended to prevent Greece from bankruptcy and help align its economy with those of other European countries. Although these successfully measures were carried out by Finance Minister Costas Simitis, public backlash unsettled Papandreou in view of the 1989 elections, prompting him to abandon the reforms in the end of 1987 and return to populist policies, thereby undoing two years of economic progress. His mismanagement of the country's economic recovery became a significant challenge for future governments.

Papandreou changed course in his third term (1993–1996), where he adopted the austerity policies initiated by predecessor Konstantinos Mitsotakis (1990–1993), as Greece faced limited time to meet the Euro convergence criteria; he did not however abandoned his populist policies. Papandreou resigned in January 1996 due to ill health. Simitis succeeded him as leader of PASOK and abandoned the Papandreou's populist policies and achieved the economic targets, enabling Greece to join the Eurozone in 2001.