During the 90s, PASOK, in common with the other European social democratic parties, has advocated Third Way revisionism and has placed the ‘modernization’ of the Greek society high on its political agenda. By focusing on a series of conflictual incidents between the teacher unions and the Greek government, this paper exemplifies the repercussions of this process on teachers-state relations. Building upon the dialectics of path shaping and path dependency, we suggest that the particular development of the modernization project and the reactions it has triggered are to be attributed to the historically determined, nationally specific, contingently activated institutional legacies and structures that, on the one hand, stand in the way of the incorporation of Greece to the EMU/ESM and, on the other, are employed by the unions to defend industrial and social citizenship.