Capitalism in Crisis, Greece in Ruins: austerity measures, state negligence and the deadliest railway accident in the country’s history.

Iuri Nascimento Santiago and Luísa Melina Lima do Nascimento 

1. Introduction 

Although this article focuses on the events that have unfolded within Greece's national borders, it is essential to understand the origins of the crisis which began in a completely different scenario, on the other side of the Atlantic Ocean, in the world's most powerful economy: the United States of America (Evans, 2011). During the 1990s, the U.S. real estate market underwent a period of rapid credit expansion, and mortgage lending was becoming increasingly popular. In particular, many people began taking out large loans at low interest rates. Banks, in their eagerness to expand lending, overlooked standard safeguards and issued loans with no income verification. As property values continued to rise, fueled, in part, by increasing demand from the so-called subprime borrowers, the housing market gave the illusion of unstoppable growth (Evans, 2011). Blinded by this apparent prosperity and unaware of the financial vulnerability of these borrowers, banks began to bundle the mortgages into complex financial instruments known as mortgage-backed securities. These were then sold to other banks and international investors, spreading the risk across global financial markets (Politize, 2020). 

In an effort to contain rising inflation in the United States, banks decided to raise interest rates. However, borrowers were unable to keep up with the payments, as incomes stagnated and household debt had surged due to the widespread availability of credit. As a result, by 2006, small lending firms began to collapse and, by 2008, major banks like Lehman Brothers shared the same fate (Aquino, 2019). This triggered a global chain reaction across financial markets, and European countries were no exception.

Thus, the subject explored in this article highlights its relevance by exposing the structural flaws of the capitalist economic system, whose logic of capital accumulation exposes States and civilians to an alarming vulnerability during times of global crisis, a reality endured by the Greek population as the system prioritized its gains, choosing to safeguard the interest of financial capital over the well-being of its people.  

2. From Wall Street to Athens: the crisis reaches Europe 

After World War II, the European economy became heavily influenced by American capital. This influence was a result of the Marshall Plan, which revealed the United States’ geopolitical interest in rebuilding Europe as a strategic plan to slow down the rise of the USSR during the Cold War (Oshio, 2023). These investments laid the groundwork for a lasting economic interdependence between the USA and the European powers.

In the years leading up to the crisis, Greece was facing conditions similar to those experienced by Brazil in the 1970s and 1980s: high inflation, large fiscal deficits and recurrent currency crisis. In this sense, the country’s adhesion to the Economic and Monetary Union (EMU) and its subsequent adoption of the euro seemed to offer a potential alternative to the economic instability. However, the adherence to the EMU required compliance to the fiscal and economic criteria set by the Maastricht Treaty, standards that Greece failed to meet and ultimately concealed at the time of its entry (Aquino, 2019). Once part of the eurozone, Greece was quickly perceived as a safe destination for international financial investment. 

In 2004, the reality previously concealed began to surface, and the government was soon forced to admit the manipulations it had used to gain entry into the EMU (Aquino, 2019). The external debts continued to rise, as well as the unemployment rates due to the sovereign debt crisis (Cassavia, 2016). It should be noted that the influence of American capital on the European economy, given the advanced stage of globalization and interdependence, endured even after Europe’s postwar recovery. As a result, in 2009, the continent effectively felt the powerful effects of the crisis that had erupted in the United States in 2008 (Oshio, 2023). Greece was then exposed to its deep structural vulnerabilities. As a result, what initially seemed to be a temporary recession soon escalated into one of the most severe sovereign debt crises in recent history, marking the beginning of a decade remembered by the economic recession, social discontent and political instability.

3. Troika’s implementation  

Greece had been facing financial challenges and fiscal problems since its adhesion to the Eurozone in the early 2000s. As the country attracted high levels of investment due to the adoption of the common currency, and the significant participation in trade flows, Greece was, somehow, able to finance its debts at relatively low interest rates (Cassavia, 2016). Nevertheless, with the outbreak of the crisis, the country then began to lose its ability to sustain its fiscal policy, leading to cuts in public spending and the growing need for external intervention.

One of the main problems caused by the creation of a common currency for Europe is the absence of an adjustment system capable of correcting the existing imbalances among member states. As a result, it also prevents some of them from resorting to external devaluation as a means of restoring their international competitiveness. This, what remains is to induce internal deflation through the reduction of prices and wages. This strategy is slower and has more severe consequences than external devaluation. 

(Cassavia, 2016, p. 13, our translation)

Faced with an unsustainable monetary situation,  Greece saw no alternative but to turn to external institutions for support. Therefore, the tripartite creditor commission that addressed the Greek case was conventionally named Troika, composed by the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (Dorneles and Junior, 2016). The first step toward forming the commission took place in March 2010, when Eurozone leaders granted loans to Greece in a package that involved substantial financing from the IMF. The subsequent financial aid was also provided by the European Commission and the European Central Bank (Soares, 2015). Overall, in this case, Troika can be comprehended as the group responsible for negotiating financial assistance with Eurozone countries that experienced liquidity problems.

4. The “solutions” imposed by the Troika and their consequences for the Greek economy 

The initial bailout packages generated significant repercussions. The first one was formalized in May 2010 with the signing of a memorandum between Prime Minister Papandreou, the IMF, the European Central Bank, and the European Commission (UNION, 2010). The agreement granted Greece a €110 billion loan. From the initial amount, €80 billion was subsidised by the Eurogroup, and the other €30 billion by the IMF, conditioned by the implementation of strict austerity measures (UNION, 2010). These included, primarily, the freezing of wages across the entire public sector, the elimination of bonuses and overtime payments, as well as a significant increase in taxes, such as the VAT (Value-Added Tax).

In addition, it is important to understand what austerity measures are in order to fully comprehend the impacts that took place during the Greek crisis. Austerity measures are economic policies adopted by governments, generally in emergency situations, aiming to reduce fiscal deficits and delay state debt. These measures often involve public spending cuts, tax increases and other actions designed to reduce government expenditures (Retorno, 2019). They are commonly required by international creditors — such as the IMF — as a condition for financial assistance.

Later in 2010, a third austerity package was announced, attempting to save €38 billion that would be spent in the following years. These measures triggered strong public reactions, resulting in a general strike, massive protests and violent manifestations (Cassavia, 2016):

The unprecedented measures included an additional 8% cut in public subsidies, a further 3% cut in public sector salaries, the elimination of bonuses for those earning more than €3,000 per month, a cap of €500 for Christmas and Easter bonuses, a monthly pension ceiling of €800, the reinstatement of a tax on high pensions, extraordinary corporate profit taxes, further VAT increases, equalization of retirement age between genders, an increase in the retirement age, the reduction of public enterprises (from 6,000 to 2,000), and a decrease in the number of municipalities (from 1,000 to 400).

(Cassavia, 2016, p. 15, our translation).

In February 2012, the second bailout agreement was signed by the Prime Minister Papademos. Under this agreement, Greece received an additional €100 billion, and more austerity measures were implemented: the minimum wage was reduced by 22% (and by 32% for newcomers to the labour market), and the government committed to eliminate 150 thousand public sector jobs by 2015 (UNION, 2012).

Although presented as inevitable technical solutions, these measures exposed the structural limitations of an economic model that prioritizes financial stability over social well-being. As reflected by David Harvey (2005) in his book A Brief History of Neoliberalism, neoliberalism is a doctrine that produces cyclical crises, shifting the system’s burdens into the most vulnerable sectors of society. Thus, the result was a period of prolonged recession, mass unemployment, the deterioration of public services and a decade marked by hopelessness and misery for the Greek population.

5. Greece’s situation after the train accident and the population’s outrage

In 2023, Greece witnessed the most devastating railway disaster in its history, when two trains collided near the city of Larissa, resulting in the death of 57 people, leaving dozens injured (CNN, 2025). This tragic event brutally exposed not only the vulnerability of the country’s railway infrastructure but also a broader collapse of governance and public accountability. Two years after the incident, the Greek population remains mobilized through mass protests and general strikes, denouncing not only the accident itself but also a system that operates with blatant disregard for the lives of its citizens (EL PAÍS, 2025).

The motivations underlying the accident are multifaceted and reflect a longstanding history of state negligence in the railway sector. Critical contributing factors included insufficient investment in infrastructure, lack of routine maintenance, and a shortage of qualified manual labour to manage operations. Furthermore, the pressure to privatize public services—largely driven by European Union demands—has fostered what Laval and Dardot (2016) have defined as a “managerial state,” where public services are subjected to market logic. This shift prioritizes financial targets over the protection of citizens, resulting in an inefficient and unsafe administration of the railway system, as starkly evidenced by the disaster.

This phenomenon can be interpreted as a form of “population murder,” stemming from the failure of competent authorities to assume appropriate responsibility. The lack of effective oversight mechanisms—such as a parliamentary inquiry or a proper judicial investigation—precludes the identification and accountability of political and administrative actors responsible for the decisions that led to the accident (CNN, 2025). The absence of such measures not only perpetuates impunity but also reveals a systemic disregard for the protection of life and public welfare. Without a robust investigative process to identify administrative and political failures, a vicious cycle of negligence and indifference to public safety is maintained.

The consequences of the accident transcended technical and administrative dimensions, triggering a profound crisis of trust in governmental institutions and public policies (REUTERS, 2025). The lack of immediate political accountability and the delayed initiation of a parliamentary inquiry contributed to a widespread sense of impunity and neglect. As Foucault (1979) asserts, modern power is exercised through biopolitics—that is, the administration of life and death. In the Greek case, the state’s failure to protect human lives means an abdication of its biopolitical most essential function, exposing citizens to structural precarity and risk. When the state relinquishes its responsibility to guarantee minimal security, it shifts the burden of survival onto individuals in a hostile structural environment.

Achille Mbembe (2018), through his concept of necropolitics, further enlightens this analysis by arguing that the contemporary state, through political choices, determines which lives are worth preserving and which may be discarded. State negligence, in the Greek context, constitutes a form of structural violence and can be seen as a necropolitical exercise. As Mbembe states, “the most explicit form of necropolitics is the deliberate abandonment of specific populations to death, disease, and insecurity” (MBEMBE, 2018, p. 143. Our translation).

The Greek public responded decisively. Protests that followed the tragedy brought thousands of citizens into the streets of Athens and other major cities. General strikes disrupted not only the railway system but also large sectors of public administration, education, and healthcare, revealing a coordinated and persistent social movement (EL PAÍS, 2025). In 2025, two years after the accident, the largest demonstration in contemporary Greek history took place, with hundreds of thousands attending. This movement, marked by a plurality of voices—students, workers, victims' families, activists—expressed a collective demand for justice, accountability, and profound restructuring of the state apparatus. These events align with what Charles Tilly (2004) describes as “repertoires of collective action,” where citizens, facing the failure of traditional institutional channels, resort to mass mobilization as a legitimate form of political engagement. Judith Butler (2015) contributes to this understanding by asserting that bodies in public spaces—gathered in mourning and resistance—challenge institutional indifference: “The public appearance of bodies not deemed worthy of mourning reconfigures the political space, making visible what was previously neglected” (BUTLER, 2015, p. 25, our translation).

Popular indignation then emerges as a form of resistance to abandonment. It is not merely a reaction to the tragedy but a protest against a sort of state logic that enables—and even normalizes—the precarization of life. The general strike and sustained riots represent an effort to reconstruct the social contract on new foundations, where human dignity and public responsibility are central to political decision-making.

This crisis underscores the collapse of a governance model that privileges economic rationality over social protection. As Saskia Sassen (2014) warns, the expulsion of populations from the realm of basic rights is a trend within neoliberal democracies, producing disposable citizens. Greece, by neglecting its citizens in the name of fiscal efficiency, aligns itself with this exclusionary paradigm, highlighting the urgent need for structural transformation.

Therefore, the 2023 railway tragedy must not be understood as an isolated event but rather as a symptom of a deeper and more pervasive crisis of representative democracy in Greece. By evading accountability, the state distances itself from its citizenry, widening the gap between rulers and the ruled. The civil society response, through massive demonstrations, constitutes a legitimate and necessary political action in the pursuit of justice, truth, and democratic reconstruction.

6. Conclusion

The railway collision that occurred in 2023—the deadliest in Greek history—cannot be understood as an isolated incident or merely the result of human error. In summary, it  constitutes the tragic expression of a historical process of state dismantlement and erosion of public policies, which began in the aftermath of the 2008 crisis and was intensified by the austerity measures imposed by the Troika institutions. The trajectory of the Greek economy—characterized by fiscal deficits, dependency on the European Union, and a problematic integration into the Eurozone—created fertile ground for the advance of a neoliberal project that, through the privatization of essential sectors such as transportation, hollowed out social protection mechanisms and undermined the state’s capacity to ensure the safety of its population.

In this sense, the Greek case transcends the boundaries of a national tragedy. It exposes the profound neoliberal logic that reduces human lives to disposable externalities within the machinery of capitalism. The Larissa tragedy illustrates the fractures of an economic model that sacrifices lives in the name of fiscal efficiency and poses a fundamental challenge to democratic systems to rethink their political and moral foundations. The mournings heard from the Greek streets are, therefore, both an ethical and political appeal: it urges a rejection of the normalization of death, while, at the same time, represents a calling  to rebuild a form of state that protects rather than abandons its citizens.

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