Thessaloniki’s Arrested Development: Missed Opportunities

Thessaloniki’s Arrested Development:Missed Opportunities

Lois LabrianidisDepartment of Economics, University of Macedonia, Thessaloniki, Greece;

[email protected]

Abstract: Cities are crucial nodes of global economic networks. A city’s economic successlargely depends on its social capital and the existence of a hegemonic coalition for development.This paper focuses on Thessaloniki, the second largest city in Greece, a country on the Europeanperiphery. The slow pace of development during the last 20 years has placed Thessaloniki in avicious circle. It is argued that given the significant structural problems in Greece, a wide socialcoalition for development that embraces a large segment of the socio-economic, political andintellectual forces is necessary to boost Thessaloniki’s development and ensure that its fruitswill be reaped by all.

Keywords: city competition, development trajectory shift, growth coalition, social coalitionfor development, Thessaloniki

Introduction: Increasing Importance of Cities in a“Glocalised” WorldIn the last 30 years there has been a profound internationalisation offinancial markets as well as a significant (though often exaggerated)delocalisation of economic activities that has affected many cities.The importance of cities has increased, as Castells and Hall (1994)and Scott (1998) argue, in the sense that they have become crucialnodes in the formation and management of global economic networks.Additionally, during the same period mass migration has acceleratedprimarily towards the cities of developed countries, which are becomingmore multi-cultural and cosmopolitan. Cities, but also companiesand economic activities, tend to become “glocal”, ie simultaneouslyintensely local and intensely global (Dicken et al 2001; Swyngedouwand Baeten 2001:829–830).

Cities are the places of renewed economic dynamism and engines ofnational prosperity. Research on “industrial clusters” based on theoriesof “global competitiveness” and “absolute advantage” (Porter, 1990) hasled to the identification of additional factors crucial to the concentrationof innovation processes in certain cities (cooperation among businesses,relations of trust between employers and skilled employees andsupportive local institutions). Progressively, the advantages or thespecialisations of cities produce a unique set of conditions and normsAntipode Vol. 00 No. 0 2011 ISSN 0066-4812, pp 1–27doi: 10.1111/j.1467-8330.2010.00852.xC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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regarding “how things get done”. This local “culture” of production canfacilitate relationships between the basic economic factors, by ensuringflows of information needed for continuous adaptation and innovation.Hence, the initial advantages become skills that are difficult for otherlocalities to offer (Rantsi 2004:87–88).

Historical events may cause certain cities to specialise in specificindustrial sectors (Doeringer and Terkla 1995; Maskell and Malmberg1999; Storper 2005). Thus a region’s history of developmentpredetermines its future course—only to some degree, however (pathdependence) (David 1985). This specialisation creates economies ofproximity (Krugman 1991a) that are self-fuelled, leading to a spiral inwhich similar businesses seeking specialised personnel are attractedto the respective city. However, as Krugman suggests (1991a and1991b), such advantages (historical factors) may gradually disappear,and specialisation may also lead to problems, ie it may cause certainregions to become “trapped” (see below for the case of Thessaloniki).

Moreover, with the collapse of trade barriers making the worldsmaller, mainly through the increasing efficiency of transport and moreimportantly ICTs, this phenomenon has not led to the diminishingimportance of space, as argued by some (eg Cairncross 1997). Theenduring competitive advantages in a global economy are often heavilylocalised, arising from concentrations of highly specialised skills andknowledge, institutions, etc. Increasing global economic integrationitself leads to heightened regional and local specialisation (Martinand Sunley 2003), as firms agglomerate with other similar firms tobenefit from local external economies of scale (Fujita et al 2001;Krugman 1991a). Globalisation is actually increasing regional economicdistinctiveness, and it is regional economies rather than national onesthat are now the salient foci of wealth creation and world trade (Fujitaet al 2001; Krugman 1997; Martin and Sunley 2003; Scott 1998;Storper 1997). Hence, some advocate the “‘re-emergence of regionaleconomies”, the “localization of the world economy” (Krugman 1997)and the rise of a “global mosaic of regional economies” (Scott 1998).

Since the 1980s, there has been an increasing focus on the significanceof the region as a fundamental basis of economic organisation anddevelopment (Cooke 1997; Storper 1997). A new paradigm has emerged(Amin and Thrift 1995; Cooke 1997; Cooke and Morgan 1998; Morgan1997; Storper 1995) in which regions appear as focal points for learningand knowledge creation. The learning regions are increasingly importantsources of innovation and economic growth. This increasing role of theregion is due to what Storper (1997:5) and others have termed “untradedinterdependencies”, ie region-specific assets of production that are thebasis of their “relational advantages” (Amin and Thrift 1995). That is, asDiez (2001:908) notes, the driving forces behind the economic growthof cities and regions are their social capital, ie formal and informalC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

Thessaloniki’s Arrested Development 3

norms, rules and networks, local tacit knowledge, institutional thickness,long-standing habits that foster reciprocal understanding and mutualconfidence among the agents of a region’s or city’s economy.

A city’s development depends not only on its capacity for valueproduction, but also on its ability to enhance this value and to captureit (Liu and Dicken 2006:1232). Yet the endogenous characteristics ofan economy are not enough to promote development in times whencompetition becomes increasingly globalised (Coe et al 2004). Thus,in relentless competition, cities attempt to attract the largest possibleshare of mobile capital to their own locale. A number of researchers(Begg 1999; Cheshire 1990, 1999) argue that competition betweencities to attract investments is a key factor in changes in the urbanhierarchy. In contrast, Krugman (1996) rightly suggests that competitionis not among cities but among businesses established in differentcities, acknowledging that certain characteristics of cities may affectthe competitiveness of businesses.

At all levels of geographic space there is some sort of urban hierarchy,the result of market mechanisms, of state interventions and of the courseof history itself. Many scholars argue for the existence of profoundeffects of economic globalisation on cities (Amin and Thrift 1995;Sassen 1994). Due to the ability of capital to switch locations, citieshave become interchangeable entities, to be played off one againstanother, forced to compete from positions of comparative weaknessfor capital investment. Perhaps a notable exception are the “globalcities” (Sassen 1994) as well as historic cities that present an enduringpotential (eg Milan and Munich) and have sufficient power to counteractthe volatility of capital. Competition between cities for consolidationand improvement of their position within the global urban hierarchyconcerns not just the few global cities, making the upgrading of a city’sposition in the urban hierarchy a challenging task in a competitivemarket.

In the new milieu of inter-city competition (Brotchie et al 1995;Duffy 1995; Jensen-Butler et al 1997), cities offer incentives toattract capital (eg offering flexible labour markets and tax incentives,curtailing environmental and social regulations), thereby improvingthe tangible and intangible infrastructure. They build “culturalflagships” (eg the Guggenheim Museum in Bilbao), functioning asinternational poles of attraction, and regenerate some of their districts,promoting a new image (eg the London Docklands, La Defensein Paris). They provide high-quality living conditions (remarkablecultural activities, first-class schools, etc). They ensure satisfactorytransportation and telecommunication connections with the immediateand wider surroundings.

Recently a rediscovery of cities as a key site for gaining competitiveadvantage in a more open international competitive environment hasC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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occurred. There is a shift away from a notion of cities as places incrisis facing the greatest economic and social problems (unemployment,social deprivation etc—eg Cheshire and Hay 1989) to cities as placesof renewed economic dynamism and engines of national prosperity(OECD 2001). Cities are now seen as sources of innovation andproductivity growth in advanced economies dependent on high-valuebusiness services, research-oriented universities and firms competingand collaborating through face-to-face contact. Cities are also believedto contain the social infrastructure, amenities and career choices tohelp countries attract population, particularly those with the specialisedskills and creative talent required to generate and exploit knowledgeand thereby secure competitive advantage (Florida 2005; Storper andManville 2006). The present analysis takes into consideration boththese approaches. We are looking for factors leading to innovationand productivity but also to the socio-economic consequences of theirabsence (underdevelopment and crisis).

Significantly, a number of scholars and policy-makers have proposeddifferent developmental strategies for cities competing in such a context.We argue that one crucial component that will help Thessaloniki toovercome its sluggish pace of development is to create a wide socialcoalition for development. However, before addressing this topic, wewould like to distance ourselves from what might be considered a similarnotion, Molotch’s (1976) “growth coalition”/“growth machine thesis”,because sheer economic growth should not be the only concern for a city;there are also other important issues. For example, “growth coalition”might enhance competition between cities at a national and internationallevel, which would facilitate Transnational Companies (TNCs) playingone city against the other. In this sense, it will lead to a “race to thebottom”. The “growth coalition” approach was developed in a growth-oriented society, and hence, despite some people’s wishes, it cannot beeasily implemented in every city outside this socio-economic-politicalcontext. Certainly it could not be applied to Thessaloniki, with itspreponderance of small companies and inflated, middle-class strata (seethe next section).

As Molotch (1976:309–314) argues, the political and economicessence of virtually any given locality, in the US context, is growth.The agenda of urban elites is to secure the preconditions of growth,to generate solidarity among growth-receptive interests and to unitelocals around the goal of growth. They have to convince people ofthe importance of growth to their well-being in order to bring togetherotherwise competing interests and foster within the locality a sense ofcommunity.

As Jonas and Wilson (1999:3) argue, at the heart of “growthmachine thesis” is the rentier cluster of actors (ie those centring aroundlandowners and land developers, realtors and banks who have an interestC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


in the exchange of land and property) supported by a number ofauxiliary players (ie the media, universities, utilities, professional sportsfranchises, chambers of commerce and the like). In the USA, growthelites, Molotch (1999:255) argues, are overwhelmingly white, affluentmales to the right of the political spectrum.

The growth coalition, Molotch (1999:249) suggests, puts localitiesin chronic competition with one another in ways that harm the vastmajority of their citizens as well as their environments. Fosteringcommunity solidarity around growth is not easy (Logan and Molotch1987). It anticipates an ideological structure that naturalises growth as abackground assumption of civic life. Thus, as Molotch (1999:259) pointsout, international competition supposedly requires places to restrainregulation and keep down wages to grow their economies. The “growthcoalition thesis” calls for cities to be “run like a business”, which reallymeans (Molotch 1999:258) “being run for business”. Thus, growthcoalitions in different cities lead these cities to compete with each otherin order to attract mobile capital to their respective localities, and thusprovoke an ever-widening “race to the bottom” by following the logic:if we don’t lower our standard first, somebody else will beat us and theywill surpass us.

Arguments made for the efficacy of interurban competition frequentlyutilise the metaphor of a “level playing field” on which cities shouldcompete. Porter (1990) for example, argues that any city has the potentialto create prosperity (ie simultaneously achieve economic growth, high-wage jobs and a desirable social and physical environment) simplyby identifying and exploiting its competitive advantage. But of coursethings are not that simple.

In fact, as Leitner and Sheppard (1999:229) argue, the playing fieldis far from level; it systematically favours some cities over othersfor significant periods of time. Hence, initiatives undertaken by localactors to improve conditions within their territory are shaped by broadereconomic and political factors which “create conditions of possibility”.That is, each city is embedded in a social system of production ora mode of regulation, occupying a unique geographical trajectory asa consequence of its historical role and location within the broaderevolving political and economic system, and political favouritismexercised by higher levels of the state create unequal conditions ofpossibility with which cities must struggle.

The above review of the literature points to the importance of socialcapital as well as of human capital; hence, cities that act as learningregions will be more able to attract high value-added, economic activitiesthat are crucial for their development. Thus, in order to trace a city’sdynamism, one has to study factors such as the percentage of graduatesin the workforce, and whether the city can be attractive to companies thatoperate in the upper part of the value chain (eg company headquarters,C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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the most important enterprises in the country—ie the largest ones,the TNCs, etc). Also the existence of a satisfactory infrastructure(physical—eg international airline connections—and intangible) is vitaland, needless to say, it must not be taken for granted, especially incountries that are not in the forefront of international development.Finally, though cities in a globalised world are facing increasingcompetition from other cities within as well as outside their owncountries, this situation does not mean that cities cannot improve theirinternational positions. On the contrary, we argue that cities that canproduce successful development plans might be able to achieve a betterposition in such a competition.

Most of the above issues, though they present significant spatialdifferentiation, are set within the context of the particular society. Thus,in the following section, background information on Greece is provided.The next four sections focus on Thessaloniki’s development path duringthe last 30 years. There is an attempt to understand why the city has failedto take advantage of major opportunities that have existed since the early90s. This failure, it is argued, is due to an inability to effect a shift inits development trajectory (ie towards the production of value productsand services) and to the lack of hegemonic elites.1 In a further sectionit is argued that a wide social coalition for development might help,in the sense that it is a prerequisite but not sufficient to accelerate thepace of the city’s development. The final section provides a conclusion.Clearly the present analysis faces certain limitations, the most importantof which is the lack of data for specific groups and/or segments ofthe city’s populations. As a result, we have considered Thessaloniki’soverall economic development. This approach does not imply adoptinga homogenous representation of the city and its social structure. Itis for future research to clarify the situation on a more societallevel.

Greece: A Developed Country with Significant StructuralProblems NeverthelessIn terms of GDP/capita Greece is among the most developed countries(according to 2008 figures the country ranked 28th in a world league(UNCTAD 2009) and 25th on the Human Development Index based on2007 data (UNDP 2009)). On the other hand, Greece lags in innovationand competition (PRO INNO Europe 2010; WEF 2010). Greece isstill characterised by some considerable structural problems, such asthe significant role of the gray economy (36.7% of GDP in 1997and 26.1% in 1960) (Tatsos 2001), oversized and weakly structuredagriculture, while manufacturing remains based on a plethora of smallfirms and traditional industries, and is marked by a low “structuralcompetitiveness” (Ioakimoglou and Efstathopoulos 2001:4–5).C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


There is a need to increase labour productivity and improve thestructural competitiveness of the Greek economy (Labrianidis et al2004) through what Sengenberger and Pyke (1992:12–13) call the“high road” to restructuring; Hudson (2002:263) terms this “weak”and “strong” competition respectively. The key point for achieving sucha development perspective is to recognise the importance of humancapital, in the sense that knowledge becomes the strategic resource andthe learning process becomes the most important activity.

The literature on the Greek economy advances several explanations.According to the “underdevelopment thesis” (Fotopoulos 1985), it wasthe low starting point of the Greek economy that led to a constraineddevelopment trajectory. Alogoskoufis (1993) sees it as a result of“low productivity” caused by market inefficiencies, inflexible labourmarkets, distortionary taxes, etc. Another approach lays emphasis onweak indigenous technological capability and the poor innovation recordof the Greek economy (Giannitsis 1993), while Spraos (1997) putsforward a “Dutch disease”-type explanation, according to which theavailability of funds (migrants’ remittances, foreign capital inflowsand EU funds) has contributed to an overvalued currency inhibitingproductive investment. Others see the fact that Greece lags behind asdue to abrupt policy changes that took place either after the fall ofthe dictatorship (1974) (Alogoskoufis 1995) or after the socialist turn(1981) (Christodoulakis 2000). According to Iordanoglou (2003:99),during the last 50 years economic growth in Greece was mainlysought through expansive monetary and fiscal policy, which had onlydiminutive and temporal positive effects on GDP and employment,but crucial and permanent negative impacts on inflation rates andbalance of payments, thus undermining economic development in thecountry.

Finally, the explanations most often associated with sociologists andpolitical scientists generally attribute the fact that Greece is outpacedto the problematic condition of its society. They view Greek society asdeeply culturally divided (Diamandouros 2000) and characterised byshort-termism, defensive attitudes vis-a-vis change, and vertical andfamilial links (Lyberaki 2000). According to Tsoukalas (1993), thecountry’s political history has resulted in an incomplete state/societyseparation, and consequently, social values are much less influencedby market rules. This trend has led to the domination of personifiedreciprocity and solidarity and prohibits structural reforms.

Mouzelis (2009) argues that cliental relations between political partiesand their voters have a great impact on every aspect of institutions,undermining their sovereignty and preventing the formation of a strongsociety. The domination of political clientelism creates a field ofconflicts which makes it impossible to create the premises for broadersocial consensus that would allow a series of reforms.C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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Politics has never ceased to have the dominant role in determining therules governing the operation of the economy, and the market has neverbecome relatively autonomous from politics. Thus political criteria,operating within the network of political patronage and clientelism,not only distort the economy but also play a very important rolein the distribution of wealth (Tsoulouvis 1987). The fact that somebusinessmen can make money by noneconomic means impedes attemptsto improve the competitiveness of the economy and also creates a climateof uncertainty among potential investors.

Greece is a centralised, bureaucratic state. According to Kamaras(2008:378), during the past 20 years, regional actors outside the capitalcity lack any other option aside from relocating to Athens, which has ledto a form of dependence on migration to the capital for advancement.Moreover, those cliental relations between the capital and the peripheryhave extended over time, since small-scale replications of projectsfor Thessaloniki are modelled on those of Athens, thus creating theproverbial “Potemkin villages” (eg Olympic Games 2004 in Athens;EXPO 2007 in Thessaloniki; the financial hegemony of Athens; the“opening towards the Balkans” with Thessaloniki playing the leadingrole as the “Metropolitan City of the Balkans”; etc). Furthermore, these“Potemkin villages” (Kamaras 2008:363–4) enjoyed the support ofboth the economic and political leadership of Thessaloniki. The formersponsored these projects because the leadership lacked the means andknowledge to promote something more meaningful, whereas the latterembraced them in order to create the impression that the city was active.

Thessaloniki’s Declining Dynamics2

The dynamics of a city depend to a large extent upon those of other citieslocated in its (national and wider) area which function—somehow—ina simultaneously competitive and complementary way. Since Athensis the capital of a primarily centralised state and at the same timehas a large concentration of economic activity and population, it wasexpected to do far better than Thessaloniki within the national urbanhierarchy. The paper does not envisage a “zero sum game”; on thecontrary, the growth of Athens can have spill-over effects on the rest ofthe country, Thessaloniki included. This fact explains why Thessalonikiis so frequently compared to Athens in the paper. It must be clearthat competition between Thessaloniki and other cities in the widerregion (Sofia, Skopje, Istanbul) has only recently been initiated due tothe lack of a common transnational context in the southern Balkans.The Cold War and problems in Greek–Turkish relations have prohibitedthe development of such a context. The situation has recently changed(in the 1990s), causing a deterioration in the developmental prospectsof the city (discussed below).C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


Table 1: Industrial enterprises in Thessaloniki, Athens and Greece

1969 1973 1978 1984 1988 2002

Athens (%) 28.0 35.4 42.9 34.4 33.6 38.3Thessaloniki (%) 10.2 9.3 11.9 12.3 12.6 12.7Thessaloniki (no) 12,707 11,272 13,082 17,797 18,234 12,277Greece (no) 124,651 121,357 110,333 144,463 144,717 97,011

Source: NSSG (1969, 1973, 1978, 1984, 1988). For 2002: NSSG, Industry Directorship(unpublished)

Thessaloniki is regarded as the second most important city in thecountry and has experienced a continuous increase in its population.3

Until the 1990s it represented a dynamism that has been reducedsubstantially since then. Thessaloniki’s purchasing power parity was106.2% in comparison to the Greek average in 1995, at 92.8% in2000 and at 92.9% in 2005, while Athens’s was 107.8%, 126.2% and136% respectively (UN http://unstats.un.org/unsd/snaama/; Eurostathttp://epp.eurostat.ec.europa.eu/).

Thessaloniki and Athens are by far the two most important cities inthe country, and they constitute a great part of its economic activity,greater than what they represent in terms of population. There wasa huge decrease in manufacturing firms in Thessaloniki in the 1988–2002 period, which must be understood, however, in a context of thedeindustrialisation of the country (Table 1). During this period, manyof Thessaloniki’s firms delocalised in part or entirely to the Balkans(Labrianidis 1996), while others ceased to operate or have been takenover by companies in Athens.

The participation of Thessaloniki in the added value of the country’slarge industries (ie with more than 20 employees) decreased between1981 and 2001 and was approximately one-third of that of Athens(Thessaloniki: 14% in 1981, 15.2% in 1991 and 12.1% in 2001,and Athens 43.9%, 41.9% and 39.7%, respectively) (NSSG, IndustryStatistical Research 1981, 1991; NSSG: Greek Statistical Yearbook2004).

Until the 1990s, Thessaloniki had a series of positive economicindices. Afterwards, through a process of major changes in the Greekeconomy (decline in industrial activity, increase in the service sector,centralisation of the economy, etc), Thessaloniki appears to be the loser,while Athens, being better “equipped”, is the big winner. Moreover,state policies during the 1990s, as Kamaras (2008) argues, broughtabout radical transformations regarding the role of Athens, particularlythrough the sale of shares of state-owned enterprises, which are mainlybased in Athens. This period is also marked by the repatriation of Greekinvestors of the shipping sector to companies established in Athens,C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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which, henceforth, became home to a business elite with an internationalprofile and international enterprising practices.

Thessaloniki is Lagging Behind and Lacking ElitesThessaloniki has two thousand years of continuous urban life, marked, ofcourse, by intense discontinuities and clashes. From the city’s foundationto the Roman and Byzantine period, it was an important commercialstation and a gate between the East and the West (Karadimou-Gerolympou 2008; Vakalopoulos 1985). Until the interwar periodThessaloniki was home to a very significant Christian population, tothe largest Jewish community in the Balkans and to other communities(Muslims, Armenians). It hosted the co-existence of different cultures,populations, doctrines, perceptions and social identities. Of course, allthis diversity was not always under ideal conditions (Mazower 2006:209;Moskof 1978).

All of this changed with the city’s incorporation into the modernGreek state (1912); it ceased to be cosmopolitan and became a bordercity and ever since, as Molho (2001) argues, the imposition of theGreek element has become “a national target in itself”. Another heavyblow came after the Holocaust, when 45,000 Jews, from a populationof 225,000 residents, died in Hitler’s death camps (Mazower 2006:26;Molho and Nechama 1974), and thus the greatest part of Thessaloniki’smiddle class was lost. Finally, after the Second World War and theGreek Civil War (1946–1949), the era of reconstruction began in asocio-political frame characterised by the marginalisation of the Leftand Thessaloniki’s development was further impeded for many years bythe fact that it was located very near the “Iron Curtain” borders.

Of course, a city cannot live on its history and fables of the past.A city lives and develops through its vital forces, and today some ofthe most dynamic of them have abandoned Thessaloniki, seeking abetter future elsewhere (in Athens or abroad) and leading to a viciouscircle of reluctant development. Since the 1990s Thessaloniki hasdisplayed a distinct lack of economic and cultural dynamism, resultingin the loss of large enterprises as well as a part of its human capital.This trend is evident in all sectors. In the media sector, all nationallycirculated newspapers are established in Athens, while the newspapersof Thessaloniki (Macedonia/Thessaloniki and Aggelioforos), once verypopular, have a limited circulation, and the same goes for televisionchannels.4

Thessaloniki has relatively noteworthy cultural activities. However,in comparison to Athens, it lags far behind, both quantitatively butmainly in qualitative elements. Thus, there are minimal employmentopportunities in the arts for residents of Thessaloniki. The highly skilledand highly remunerated jobs are in Athens, a situation, as LabrianidisC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


(2008:328) argues, that forces many of Thessaloniki’s artists either tocarry on their artistic activity as a sideline or to migrate, primarily toAthens and secondarily abroad.

Human capital is the most important factor of growth. As Florida(2005:3, 10, 16) suggests, the key factor in the global economy today isthe competition between locales to attract talented individuals. Takinginto consideration Florida’s analysis, I point out that the creative class5

is the “most powerful magnet” for globalised innovation. Today, thecompetitiveness of a city is determined by its ability to attract andretain such talents. As Florida (2005) asserts, these individuals selecttheir location by taking into account issues such as whether the cityadopts modern values, human rights and the right to self-expression.Tolerance does not just lie in the acceptance of different people; theactual recognition and acceptance of these differences is not a matterof “political correctness” but a prerequisite for economic development.Hence, the flight of some of the “best” from Thessaloniki decisivelycontributes to the vicious circle of the city’s arrested development.

An excessively schematic, traditional, diachronic look into the city’shistory dominates: in the 1960s and 1970s, Thessaloniki was an opencity; it was cosmopolitan, with considerable cultural activity andnoteworthy writers, but also many new enterprising ideas. Conversely,since 1990 Thessaloniki has been labelled the “capital” of intoleranceand neo-conservatism. The city is supposed to have “peculiarities”,to lean towards nationalism and conservatism, while racist behaviouris a “constitutive element of the local society”. These phenomenacorrespond to a period of sluggish development. However, it is hardto tell what the cause is and what the effect is: the economic or politicalenervation of the city.

An exceptionally high percentage of the country’s graduates (73.2%in 1981, 74.5% in 1991 and 78.7% in 2001) and an even higherpercentage of postgraduate degree-holders live in Thessaloniki andAthens; these percentages are much higher than the cities’ shares ofthe total population (43.5% in 1981, 44.7% in 1991 and 45.5% in 2001)(NSSG: Census 1981, 1991, 2001; Statistics of Education 1981, 1991).That is, there is an enormous spatial polarisation, strengthening thedynamics of Thessaloniki and Athens, while all remaining areas aredeprived of a specialised workforce. In addition, there is a polarisationbetween Thessaloniki and Athens. The differences in scale and degreeof complexity in both business and social life between Athens andThessaloniki mean that the capital draws the largest part of thesequalified, highly skilled individuals. At the same time, Athens utilisessuch individuals much more effectively than any other Greek city byproviding better career opportunities and a more secure income. Thisfact in itself creates a virtuous circle for Athens and a vicious circle forall other cities including Thessaloniki.C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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Table 2: Percentage of graduates in total population and postgraduate degree holders

% of graduates intotal population

Postgraduatedegree holders

Unemployment ofpeople aged 25–34

qualified for scientificprofessions

1981 1991 2001 1991 2001 1981 1991 2001

Greece 3.4 5.9 8.5 36,865 55,422 1.9 2.4 3.8Athens 5.5 8.8 13.7 23,643 35,517 2.7 2.5 2.1Thessaloniki 6.3 13.4 18.4 4855 6390 1.8 2.4 4.1

Sources: NSSG (1981, 1991, 2001; 1981, 1991; 1986, 1996, 2004)

In 20 years, Thessaloniki more than tripled its university graduates (ie55,298, 16.8% of Greece in 1981; 130,159, 21.7% in 1991; and 199,472,21.5% in 2001) and its percentage of graduates over its total populationhas also increased. Likewise, the number of residents in Thessalonikiholding postgraduate degrees has increased (Table 2).

Unemployment in Thessaloniki quintupled between 1971 and 2004,mainly after 1991 (ie 10,900, 4.8% in 1971; 16,990, 5.6% in 1981;28,438, 7.6% in 1991; 53,180, 11.3% in 2001; and 53,295, 10.4% in2004) (www.statistics.gr; www.economics.gr). Moreover, while in 1981and 1991 Thessaloniki had the largest percentage of degree-holderstogether with a lower rate of unemployment compared to Athens, adecade later it continued to have the highest percentage of graduates butalso a higher rate of young unemployed graduates compared to Athens(Table 2).

Individuals in tertiary education are very important for thedevelopmental dynamics of any city. Thus the evolution over time of jobson offer that require a tertiary education degree is investigated below. Inorder to distinguish between tertiary education and other posts, in theabsence of any official statistical data, relevant data were sought in therecruitment section of the daily press in Thessaloniki and Athens.6 Thepercentage of tertiary education job-listings among the total jobs offeredin Thessaloniki more than quadrupled in the 1981–2006 period (5.7% in1981, 9.2% in 1991, 18.2% in 2001, 23.4% in 2006), showing an overallimprovement in the local economy. However, the dominance of Athensis evident throughout this whole period, and the gap grew between thetwo cities (6.7%, 33.9%, 37.5% and 42.1% respectively).

Thessaloniki is not an attractive location for the headquarters ofimportant enterprises. The analysis of empirical data from 1970 to thepresent illustrates that Thessaloniki does not serve as a home office forenterprises except those active within its boundaries—and frequentlynot even for those. The ICAP records were exhaustively processed forfour years and data were documented for 5577 enterprises. Thus, apartC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


Table 3: Enterprises in Thessaloniki with headquarters or factory/office elsewhere

Headquarters Factory/office 1970 1980 1990 2004

Thessaloniki Athens 9.2 6.2 9.8 2.7Thessaloniki Elsewhere 1.4 39.8 41.8 3.4Athens Thessaloniki 89.4 41.0 37.6 77.8Elsewhere Thessaloniki 0.0 13.0 10.8 16.2Total (%) 100.0 100.0 100.0 100.0Total (no) 218 161 194 2168

Source: ICAP, processing by author

from the 3409 enterprises with headquarters and a factory/office onlyin Thessaloniki, another 2168 appeared; they can be categorised intofour basic types, the predominant of which throughout the years is thecategory of enterprises with headquarters in Athens and a factory/officein Thessaloniki. It was only in the years 1980 and 1990—when thecity’s economy was thriving—that there was a significant portion offirms with headquarters in Thessaloniki and a factory/office elsewhere.Since 1990 there has been a spectacular increase in the percentage ofenterprises with headquarters in Athens and a corresponding shrinkageof enterprises with headquarters in Thessaloniki and a factory/officeelsewhere (Table 3).

Thessaloniki accounts for a small percentage (10.7%) of the 100major enterprises of the country in the 1982–2002 period, while theoverwhelming majority are located in Athens (Table 4). Moreover, someof these companies located in Thessaloniki were either acquired byenterprises established in Athens or today operate below capacity. Thetwo cities combined contained 78.2–86.2% of the 100 major enterprisesbetween 1982 and 2002, demonstrating the country’s large geographicalpolarisation.

The share of Greece to the foreign direct investment (FDI) worldinflow stocks is less than 1% throughout 1981–2004 (0.75% in 1981and 0.2% in 2004) (UNCTAD 2007). The few FDIs that are attracted to

Table 4: Top 100 major enterprises in Greece, by city of headquarters

Thessaloniki Athens Other city Total

1982 7 61 19 871986 17 64 13 941990 8 71 14 931996 9 72 16 972002 10 74 16 100

Total (a.n.) 29 177 65 271(%) 10.7 65.3 24.0 100.0

Source: ICAP (1984, 1988, 1992, 1998, 2004)

C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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Greece are concentrated in Athens, while Thessaloniki largely fallsshort. The examination of the distribution of TNCs in Greece wasbased on unpublished ICAP data for 2006. This database contains1735 subsidiary companies of TNCs in Greece. Of these, 1490 (86%)are established in Athens, while only 107 (6%) are in Thessaloniki.The subsidiary companies constitute 7.9% of Athens’s and 2.9% ofThessaloniki’s enterprises. The total number of employees in subsidiarycompanies is 187,612, of which 90% work in Athens and barely 4.6%in Thessaloniki. In a nutshell, the overwhelming majority of subsidiaryenterprises in Greece, their employees and their fixed assets are locatedin Athens, while Thessaloniki follows in a distant second place. Thepresence of TNCs in Greece intensifies the territorial polarisationbetween Athens and Thessaloniki on one side and the rest of Greece onthe other side.

Thessaloniki’s Infrastructure and Trends towardsLow DevelopmentThessaloniki’s poor infrastructure is yet another indication of its lowlevel of development and not vice versa. Below we will use the exampleof Thessaloniki’s air connections to demonstrate this point.

The international passenger movement for the airport of Thessalonikiincreased almost sevenfold between 1978 and 2005 (from 100,000 to743,000), while in total its percentage domestically only tripled (from5% to 14.4%). Throughout this whole period Athens accounted foralmost 85% of passenger movement. The analysis of internationalflights for Thessaloniki during the period 1993–2001 shows a significantincrease both in quantity and in regard to the connected cities andcountries. However, after 2001, while the number of flights hasremained constant, the connected cities and countries have decreasedconsiderably. In contrast, Athens shows an increase in both the numberof flights and in connected countries (Table 5). Thessaloniki’s air

Table 5: International flights, Athens and Thessaloniki, 1991–2006 (number ofscheduled flights/week)

Thessaloniki Athens

1993 2001 2006 1991 2002 2006

Flights 95.5 141 140.5 506 789 959Cities 23 35 19 84 98 92Countries 17 22 11 56 55 56

Source: Unpublished data: Civil Aviation Authority, Department of Airports, State Airport ofThessaloniki; AIA/Management Information System; CAA, Directorate of Organization andDevelopment, Department of Statistics



connections do not seem to encourage/reflect the growth of Greekenterprises in the Balkans and in the Central and Eastern EuropeanCountries (CEECs). Needless to say, Thessaloniki’s relatively poorflight connections reflect, to a large extent, the low demand for air travel,while at the same time it poses an obstacle for further development: avicious circle once more.

Regarding the spatial allocation of public spending since 2001, therewas an abrupt increase in public spending in Athens, mainly dueto the preparation for the 2004 Olympic Games, which meant thatThessaloniki, as well as the rest of the country, was neglected (ie in2001–2004 public spending figures were Athens 55.6%, Thessaloniki5.5%, while in the 1976–2001 period they were 31% and 6.7%respectively) (Psycharis 2006). As Thessaloniki falls behind, thepressure for public-spending inflow increases and now includes publicdissatisfaction as well as dissatisfaction among the elites (cf. demandsfor “major projects”—always in favour of tangible investments).However, at the same time, this decline is also to blame for themisallocation of resources, as well as the fact that these resources donot produce desirable results regarding growth. The main issue is notthe volume of investments but the social return and their management;it is in this respect that Thessaloniki falls short, particularly comparedto Athens.

Thessaloniki’s Missed OpportunitiesAs shown above, Thessaloniki in the 1990s does not appear to haveadequately responded to the new challenges nor to have utilised the newopportunities that arose in the wider European area (eg the sweepingchanges of 1989, integration and EU enlargement). The city failed toface the structural problems of its economy and to initiate a restructuringprocess. Thessaloniki appears unable to grasp the new opportunitiesproductively to improve its position within the national and internationalurban network. This section traces the causes of this inability throughthe analysis of three such “missed opportunities”.

Thessaloniki as Cultural CapitalThessaloniki was the Cultural Capital of Europe in 1997 (CCET’97),undoubtedly a very significant event for the city and for Greece,7 in thesense that many venues for cultural activities were built or refurbishedand new cultural institutions were founded, while the city’s public wasoffered an unusually high-quality artistic programme.

CCET’97 was a remarkable opportunity for fundamental changesin the city’s cultural status and Thessaloniki’s international projection.CCET’97 did not manage to create a viable market for cultural productsC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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via the artistic programme nor did it stimulate the city’s residents tocounter the vestiges of widespread “provincialism”. One has to bear inmind, however, that the cultural programme was drawn up under socio-political conditions dominated by the nationalistic component, where thecontroversy over the name of Macedonia with the neighbouring countryhas particularly shaken northern Greece. The Technical Program ofCCET’97 led to the creation of a large number of buildings for culturalactivities. While their construction was quite costly, a large number ofbuildings were not needed,8 and that placed the burden of operatingcosts on the municipal institutions’ budget for culture.

It is doubtful whether CCET’97 was perceived as an ideal opportunityto support, on the one hand, grassroots artistic production, and, on theother, “internationalisation” and amplification of the city’s cosmopolitanimage (as European cities had already done since the 1980s) (Bianchini1993; Sjoholt 1999), as suggested by the team that carried out the ex-ante evaluation of CCET’97 (Labrianidis et al 1996). More importantly,CCET’97 was unsuccessful in grasping the opportunity to implementthose projects that would improve the image of Thessaloniki; this couldbe partially attributed to the lack of a Development Plan that could actas a framework in which CCET’97 could operate. The inability shownby the CCET’97 Organisation Committee to take full advantage ofthis opportunity is not the outcome of coincidental facts or featuresof secondary importance (such as the supposed inability of certainpeople who directed CCET’97), but rather derives from endogenouscharacteristics of the society itself, that is, from the lack of a hegemonicgroup that plays a fundamental role in the development of the city.

The Flight of Greek Enterprises to the Balkans and theImmigrant Influx into GreeceIn the 1990s, Thessaloniki (as well as Greece in general) experiencedtwo phenomena that do not appear to have been used effectively: thedelocalisation of Greek enterprises, mainly from northern Greece andThessaloniki, to the Balkans, and the influx of immigrants, primarilyfrom the Balkans, to Greece. The two processes—sides of the samecoin—create important mutual externalities and reflect the search forcheap labour on the part of Greek enterprises. These events can turn intoeither a blessing (both for the economy and for society) or a Pandora’sbox (in the form of providing an excuse for stagnancy and inactivity). Itis important which approach ultimately predominates, and this dependsnot so much on economic as on social and political factors. Twenty yearslater, the question of how the enterprises will utilise those opportunitiesremains uncertain. There are disquieting indications that an importantshare of the enterprises exploits these opportunities “short-sightedly”C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


(by establishing strategies of zero change and inactivity) (Labrianidiset al 2004).

In the early 1990s there was an influx of migrants into Greece,primarily from the Balkans. Today more than 8.6% of the total numberof migrants in Greece live in Thessaloniki, coming from 132 countriesand constituting 5.7% of Thessaloniki’s population. The influx ofimmigrants represented a remarkable enhancement to the economy ofThessaloniki (Labrianidis and Lyberaki 2005). The world has changedand the city has subsequently changed with it; today, Thessaloniki’spopulation is more culturally, linguistically and nationally diverse. Manyof Thessaloniki’s current residents have lived in other countries, whilea significant proportion of them are either economic immigrants orresidents of Greek origin who arrived from abroad. The familiarisationof Thessaloniki with the “other” can allow the city to become morecreative. However, as already pointed out, identity politics in the localpublic domain are less cosmopolitan and of a more nationalistic andconservative agenda.

The “opening” of Greek enterprises abroad, until then of extremelylimited importance, was an unforeseen phenomenon and a greatchallenge, particularly for Thessaloniki and northern Greece. Atfirst (1989–1998), Greek FDIs were focused in three countries thatreceive 92.7% of total Greek investments (Bulgaria, Albania andRomania). The main motive for this investment activity has been thegeographical proximity and, as a result, most of the Greek investmentsare concentrated in the southern regions of the neighbouring countries.Given that most Greek firms are small, family-based units, this proximityenabled owners and technical staff to commute even on a daily basis,since their physical presence tends to be crucial for the smooth operationof the subsidiary firm. This practice is better ensured when the distancebetween the residence of the owner in Greece and the operatinglocation of the business is the smallest possible (“local delocalisation”)(Kalogeresis and Labrianidis 2008). This proximity is the main reasonthat northern Greece and particularly Thessaloniki had a leadingrole (Labrianidis 1996, 2001a) until the late 1990s, while since thenThessaloniki has relinquished its leading role. It is now the largestGreek enterprises that delocalise their labour-intensive activities out ofGreece.

The garment industry, in particular, was influenced heavily bythe “opening to the Balkans” and contributed to the decrease ofThessaloniki’s developmental dynamics. This sector had grown inGreece in the late 1960s on the basis of subcontracting, as a resultof decentralising strategies followed by developed countries, whichtransferred labour-intensive activities to low labour-cost countries.However, since the mid-1980s Greece ceased to have relatively cheaplabour costs. In the early 1990s, certain enterprises immediately seizedC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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an alternative option that emerged, so they could recover their lostinternational competitiveness. They delocalised part or all of theirproduction in CEECs, and primarily in the Balkans, to decreasethe average unit cost. Thessaloniki was home to the overwhelmingmajority of Greek garment manufacturing firms that were engaged inproduction under subcontracting arrangements from foreign companies.This practice provided an important economic dynamism to the city; itoffered a great deal of employment in the formal and the informaljob market (in-house pieceworkers, etc) (Chronaki et al 1993) andit created synergies that led to significant achievements (eg softwarefor embroidery machines that was sold all over the world). Since thebeginning of the 1990s, this “garment cluster” has gradually shifted tothe southern regions of Bulgaria, Albania and the FYR of Macedonia(Kalogeresis and Labrianidis 2008). Many business units shut down,while most delocalised their production entirely or in part to the Balkans,causing at least in the short term vast unemployment in the city. Sincethen, the city does not appear to have found a new specialisation in orderto replace the one it lost.

“Wide Social Coalition for Development”:A Possible Solution for ThessalonikiThessaloniki’s declining dynamism should be altered and graduallyinverted. However, this undertaking is not an easy task to accomplish;it cannot be accomplished in the short term, and one should not expectthat “market forces”—and their automatic mechanisms—will single-handedly lead to a more spatially-balanced development for the country.Moreover, market forces are by no means able to lead the city alonga route of stable development. According to what we have alreadyclaimed (Kafkalas et al 2002), the fictitious “big-scale projects” arenot sufficient to satisfy the particular needs that they claim to addressand, most importantly, they cannot set the city on a development path(Kafkalas et al 2007).

In order for a city to enter a development path there are manythings that have to be accomplished simultaneously. The existence of a“hegemonic” coalition for development that weaves together public andprivate elites plays a fundamental role in generating and maintainingcompetitive spaces (Swyngedouw and Baeten 2001:830–834). Theenduring economic success of some cities and regions suggests thatthis achievement is not primarily due to the economic structure but tothe particular institutional web, the codified practices of exchange andencounter, and the regulatory environment (Amin and Thrift 1995) aswell as to specific and historically created forms of territorial and socio-institutional organisation (Cooke and Morgan 1998) and to the natureand structure of its political and economic elites. On the other hand,C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


persistent socio-economic decline and failure of regeneration signal theabsence of innovative elites and/or a dominance of traditional elitesthat try to hang on to eroding positions of power, while the centres ofeconomic power migrate elsewhere.

In addition, due to the size and specific history of the city (discussedabove), which makes the direct comparison with Athens ineluctable, thecitizens of Thessaloniki challenge the leadership of the capital city (thesame phenomenon appears in relevant cities worldwide, as mentionedin the first section of this article).

Another thing that must be accomplished in order for Thessaloniki toenter a development path is a Strategic Plan for the city; a plan that isto be supported with consistency and will allow the demand of funding(for projects, concerted actions, etc) by the government in a constituted,persuasive and ultimately effective way—a plan that should be basedon social consensus. This social coalition for development shouldrepresent perceptions that encapsulate the expectations of both thebodies (industrial and commercial chambers, professional associations,etc) and the majority of citizens. Needless to say, it should work infavour of the majority.

Furthermore, while highlighting the necessity for a “developmentalplan” we aim not only at improving the conditions under which labouror capital function (restriction of hyper-exploitation, etc), which willfacilitate the development of the “economy” and the “city” and willultimately allow everyone to flourish, according to the belief thatgrowing the “pie” automatically grows one’s share of the “pie”. We alsoaim to highlight the need for the creation of a development “framework”which will set the kind of priorities for development, knowing that thisendeavour will lead the city towards a higher level of development,which will, on the one hand, be beneficial for most of the people, but,on the other hand, will also benefit some people more than others.

Furthermore, it will give rise to a debate regarding the major issuesconcerning the city, and disclose the very disputes or clashes over whatis the issue at stake in each case. Accordingly, it will clarify the termsof political juxtaposition, and reveal the essential disagreements overthe basis of social inequities as opposed to political promises or clashesbetween political parties.

Consequently, a false dilemma is created in terms of the perception ofa choice between a class conflict inside the city and an improvement ofthe positioning of the city on the national and international divisionof labour along with the upgrading of the position of the masses.Despite the existing social inequities, the social juxtapositions shouldnot necessarily undermine rather than re-orientate the developmentalprocedure.

The contribution of the social partners does not automatically implythe settlement of contests and conflicts; it permits, however, theC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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articulation of the pursuits and the emergence of interests and contrasts.This partnership in fact increases the level of transparency and does notcreate space for backstage pursuits of privileges or the easy emergenceof particularised pursuits on behalf of “general welfare”. The aim is toseek the broadest possible approval of its bodies and citizens. Needlessto say, consent is more easily achieved in situations where everyonewins, even if with different shares.

In the case of Thessaloniki, such goals today could be, firstly, tobecome appealing at the international level to skilled individuals aswell as enterprises that will locate important parts of their structure (egproduction of goods and services of high added-value, regional officesof TNCs) in the city. Here is a suggested targeted approach to investmentattraction and not an endless race to offer incentives to businesses, andthe main focus should be on the spin-off effects of development tosociety. Needless to say, the “territorial embeddedness” (discussed inthe first section of this article) of these investments is of paramountimportance. A second goal could be to play an important economicand political role in the Balkans, and a third one to promote the city’stourist development (through the promotion of its cultural and historicalcharacter, its festivals, etc). Finally, there could also be a goal to establishthe city as a major centre for tertiary education, also addressed to theBalkans.

All these measures will ensure the city’s role within the internationaldivision of labour, increase employment rates and help the city at leastto retain its highly educated human capital. This human capital influxwill inevitably create a more attractive image for the city and contributeto infrastructure improvements. However, the composition of such awide social coalition for development will have to face a series ofgreat impediments. An indispensable prerequisite for the success of thisproject is that it must be formed on the basis of a substantial analysis ofthe city’s strengths and weaknesses and above all the identification of theconstructed advantages that are needed. Greek society seems to overlookthe importance of understanding the impacts of different alternatives.Moreover, there are no “raw data” to verify what is happening; it is avery common phenomenon to see Greece missing from internationalstatistics (Eurostat, OECD, etc), due to lack of data. The absence of dataturns every dilemma into a “political decision” (which has ended upmeaning an unsubstantiated decision) based on “political evaluations”.Adding to this list, “analysis” is also based on econometric models withfew and often unverified data (the gray economy is enough to underminethose models), which result in extremely problematic political actions.

Effective decision-making procedures should be formed regarding themajor developmental issues of the city (including the management ofits urban structure) that can encourage the well-organised contributionand participation of the city’s socio-economic forces. Only in thisC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


manner could a meaningful “developmental objective” be achievedwith a chance of materialisation. There are recent examples provingthat decisions regarding the urban structure of the city with broaderimpacts on its developmental dynamics are in general taken without thesubstantial participation of its actors and its citizens.

Conclusions: A City’s “Flight Forward” Presupposesa “Wide Social Coalition for Development”In the globalised world, cities are becoming more and more important,while at the same time they face more competition from other cities bothdomestic and foreign. Even though external forces such as globalisation,European policies and economic, demographic, social, technologicaland political developments are important, as Andersen and van Kempen(2003:85) argue, good city policy can do something about the situation;policy-makers should not be seen as “puppets dancing to the tune” ofthese forces.

Thessaloniki’s recent history displays the restrictions imposed byprevious developmental phases (path dependence). According to all thebasic socio-economic indicators, Thessaloniki is and always has beenthe second most important city in the country. However, in the 1990s,there was a breaking point after which it faced problems that to an extentare the outcome of multiple factors, such as the failure to modernisethe Greek society, economy and state, the strengthening of networksthat favour the development of Athens, and the low-value productsand services dominating Thessaloniki’s economy (eg internationalsubcontracting in the garment industry). Thessaloniki, like any othercity, has historical turning-points,9 periods in which its intellectual andother forces are less creative. What is alarming is, first, that Thessalonikilags behind mainly because the aspects in which it falls short arethose that can decisively contribute to its development. Secondly, inthe sense that in an era when competition between cities is acute,Thessaloniki trails too far behind Athens, which has absorbed most of theeconomic dynamism of the country. Finally, and most important of all,Thessaloniki is losing the social, economic and intellectual capital thatmight facilitate its step forward. Conservatism has dominated in criticalfields: economic (enterprises that retained a low labour-cost “strategy”that characterised the city’s “dynamic” era in the 1970s and 1980s,rather than shifting to the production of more sophisticated productsand services), and political/social (over-representation of conservativepoints of view, low tolerance for the “other”). Thus, the “vicious circle”of underdevelopment was strengthened.

We argue that the case of Thessaloniki illustrates the need for astrategy so that the city can follow a dynamic development path. Priorityshould be given to the exploitation of particular forces of the city,C© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.

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aiming at the amplification of its role in the national and internationalurban system. It could build advantages, so that it becomes appealingat the international level to skilled individuals as well as to enterprisesthat will locate important parts of their structure in the city. Amongother aspects, the city should make the most of its history, emphasiseits diversity and call attention to the fact that it is the largest centreof tertiary education in Greece. These policies cannot come aboutautomatically; they require planning and the lack thereof is not thereason for Thessaloniki’s developmental problems, but the result. Thereal cause is the lack of economic-social-political features as well as ofpowerful socio-economic and political elites in place to coordinate thecreation of a strategic plan and to guarantee its realisation. Systematicaction is required, with specific and feasible objectives that will ensurewide acceptance and consent of all institutions and citizens involved ina coalition for development.

AcknowledgementsI would like to thank my friends Giorgos Agelopoulos, Chrysafis Iordanoglou andGrigoris Kafkalas as well as the two anonymous referees of the journal for their valuablecomments on an earlier draft of this paper.

Endnotes1 The term elite is used in the plural in relation to those who share a certain social statuscharacterised by access to political and economic power, better education, awareness ofwider socio-political dilemmas, experience in the public domain (local politicians, unionleaders, policy-makers, activists, etc) and cultural influence. Such an understanding ofelites is influenced by Weber’s analysis of power relations (1946, 1994) and differsfrom the views of classical elite theorists such as Pareto, Mosca and Michels (Green2008:201).2 While undertaking this study, we faced insurmountable obstacles in finding officialdata for the city of Thessaloniki. In many cases we had to process data from othersecondary sources (unpublished data from the NSSG, ICAP directories, newspapers,etc—see section 7).3 710,352 or 8.1% of Greece in 1971; 871,580, 8.9% in 1981; 971,067, 9.5% in 1991;1,084,001, 9.9% in 2001; and 1,112,871, 10.1% in 2004 (NSSG Population Censuswww.statistics.gr, www.economics.gr).4 Nationwide television channels are concentrated in Athens and hold 83.2% of theviewership (9–15 April 2007, http://www.agb.gr/gr/data/default.htm). Two nationwidetelevision channels are based in Thessaloniki: ET-3 (2.4%) and MACEDONIA TV(0.7%), as well as a number of small, local television channels—some with far-rightinclinations.5 We understand the creative class (ie scientists, engineers, artists, executives,professionals and craftsmen) as corresponding to the specialised and skilled labourforce that supporters of the knowledge economy suggest and in this sense it is a usefulnotion.6 Athens: newspaper Ta NEA: 14 September 1981, 15 September 1991, 17 September2001 and 23 January 2006. Thessaloniki: Makedonia: 13 September 1981, 15 September1991, 16 September 2001 and 22 January 2006. Given the fact that these data derivedfrom one randomly selected date on each year, they are not able to provide us with anC© 2011 The AuthorAntipode C© 2011 Editorial Board of Antipode.


accurate estimation of the overall situation in both cities. Nonetheless, they are indicativeof the general trend regarding demand for high-skilled labour.7 This section is based on Labrianidis (2001b) and Deffner and Labrianidis (2006).8 In 1997 the multifold performances that were staged (1271), compared to the annualstandards (200), were hosted in fewer places than those of 1996, since a large share ofthe venues were still under construction by January 1997.9 As Leontidou (1995:2) suggests, in modern times cities rise and fall within decadesrather than centuries.

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Thessaloniki’s Arrested Development: Missed Opportunities

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