• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Introduction
      • The period of debt escalation: 1980–1993
        • The first fiscal crisis
      • Debt stabilisation and EMU membership
        • The implementation of market reforms
        • Post-EMU fatigue
        • Why debt reduction was insufficient
        • The chronic current account
      • Unprepared for the 2008 crisis
        • Post-election inaction
        • Missing defence and the role of external deficits
      • Two important policy facts
        • Cyclic nature of public spending
        • Electoral cycles
      • An ex post assessment of the Memorandum
        • The failure in fiscal adjustment
        • The limits of structural adjustment
        • The failure of privatisations
      • The second Memorandum conditionality and ways out of the crisis
        • An alternative scenario: walking on a tight rope
        • Is exiting from the euro an option worth considering?
        • Stay in the eurozone and grow more
      • Conclusions
      • Acknowledgements
      • Disclaimer
    • See Also
    • Bibliography
    • How to cite this article

Greek crisis in perspective: causes, illusions and failures

Nicos Christodoulakis
From The New Palgrave Dictionary of Economics, Online Edition, 2015
Edited by Steven N. Durlauf and Lawrence E. Blume
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Soon after the 2008 global crisis, the euro faced its toughest challenge since its introduction as several of the participating Member States faced unprecedented financial problems. Greece was the most severe case, requiring intervention from the EU and IMF to stabilise its economy and repay debt obligations. This article explains the debt process in Greece from the 1980s to date, and describes its main causes and episodes. It also assesses the impact of the IMF/EU austerity programmes and shows that its failure to control recession inhibited the prospects of debt stabilisation. Five years after the bailout agreement, Greece is in a deep contraction, with socially explosive unemployment rates, while public debt is alarmingly higher than the level that triggered the crisis. An alternative scenario is discussed, showing that stabilisation can become more effective and realistic if recession is tackled first and reforms follow on a steadier path.
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How to cite this article

Christodoulakis , Nicos. "Greek crisis in perspective: causes, illusions and failures." The New Palgrave Dictionary of Economics. Online Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2015. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 23 February 2018 <http://pde-test1.pde.pm.semcs.net/article?id=pde2015_G000227> doi:10.1057/9780230226203.3946

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