European influences and domestic politics have both played a significant role in the welfare state reforms that have taken place in Greece over the past twenty five years. Although private interests and bureaucratic mechanisms have opposed widespread reform in the welfare system, the influence of the EU has been pervasive encompassing policies including social assistance and public pensions. Greece suffered from high public debt and deficit which it was unable to overcome despite strong economic growth in the years preceding the debt crisis. Funding the Greek government's budget and its deficits created a strong need for borrowing in international markets and Greece entered a Memorandum of Understanding with its prospective lenders, leading to the implementation of reforms sought by the European Commission, European Central Bank, and International Monetary Fund. The adoption of austerity measures and pro-market reforms created significant challenges to Greece's economy which economists have described as a 'political economy of generalized insecurity'. The impact these reforms have had on an already fragile familistic welfare capitalist economy has only deepened the European sovereign debt crisis.
