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Greek government-debt crisis




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The Greek government-debt crisis happened after the financial crisis of 2007–08. In Greece it is known as The Crisis (Greek: Η Κρίση. It started with sudden reforms and austerity measures. But this made people poor and lose money and land.[1][2]

The Greek economy is in the longest recession of any advanced capitalist economy to date. It is even longer than the US Great Depression. Many well-educated Greeks left the country.[3]

A trade deficit means that a country is buying more than it produces, so it has to borrow from others.[4] Both the Greek trade deficit and budget deficit rose from below 5% of GDP in 1999 to peak around 15% of GDP in the 2008–2009 periods.[5] Greece was perceived as a higher credit risk alone than it was as a member of the Eurozone. Thus investors felt the EU would help out Greece.[6]

Reports in 2009 of Greek government disorganization increased borrowing costs. Greece could no longer borrow to finance its trade and budget deficits at an affordable cost.[4]

The Great Recession

The Greek crisis was triggered by the Great Recession, which led the budget deficits of several Western nations to reach or exceed 10% of GDP.[7] Greece had high budget deficit (10.2% and 15.1% of GDP in 2008 and 2009, respectively). But at the same time it had high public debt to GDP ratio.[7] Greece appeared to lose control of this ratio, which already reached 127% of GDP in 2009.[8] Being a member of the Eurozone, the country had essentially no autonomous monetary policy flexibility.[9][10]

Internal factors

In January 2010, the Greek Ministry of Finance published the Stability and Growth Program 2010.[11] The report listed five main causes: poor GDP growth, government debt and deficits, budget compliance and data credibility. Causes found by others included excess government spending, current account deficits, tax avoidance and tax evasion.[11]

Bibliography

      , https://www.palgrave.com/gp/book/9781137369222 
       .
      . https://www.academia.edu/6830440/Crisis-Scapes_Athens_and_Beyond. 
      . http://www.palgraveconnect.com/pc/doifinder/10.1057/9781137271570. 

References

  1. iefimerida.gr (20 July 2015). "BBC: Η Ελλάδα βιώνει ανθρωπιστική κρίση -Εννέα αποκαλυπτικά γραφήματα [εικόνες"]. http://www.iefimerida.gr/news/218032/bbc-i-ellada-vionei-anthropistiki-krisi-ennea-apokalyptika-grafimata-eikones. 
  2. Naftemporiki (26 March 2015). "Η Ελλάδα και η ανθρωπιστική κρίση". http://www.naftemporiki.gr/finance/story/928463/i-ellada-kai-i-anthropistiki-krisi. 
  3. Oxenford, Matthew; Chryssogelos, Angelos (16 August 2018). "Greel Bailout: IMF and Europeans Diverge on Lessons Learnt". Chatham House. https://www.chathamhouse.org/expert/comment/greek-bailout-imf-and-europeans-diverge-lessons-learnt#. 
  4. 4.0 4.1 "Federal Reserve Bank San Francisco – Research, Economic Research, Europe, Balance of Payments, European Periphery". 14 January 2013. http://www.frbsf.org/economic-research/publications/economic-letter/2013/january/balance-payments-europe-periphery/. 
  5. "FRED Graph". https://research.stlouisfed.org/fred2/graph/?graph_id=244979&updated=4652. 
  6. Ezra Klein. "Greece's debt crisis explained in charts and maps". https://www.vox.com/2015/7/1/8871509/greece-charts. 
  7. 7.0 7.1 2010-2018 Greek Debt Crisis and Greece's Past: Myths, Popular Notions and Implications. Academia.edu. https://www.academia.edu/37583185/2010-2018_Greek_Debt_Crisis_and_Greeces_Past_Myths_Popular_Notions_and_Implications. Retrieved 14 October 2018. 
  8. "Eurostat (Government debt data)". Eurostat. https://ec.europa.eu/eurostat/tgm/refreshTableAction.do?tab=table&plugin=1&pcode=teina225&language=en. Retrieved 5 September 2018. 
  9. "Greece is trapped by the euro". The Washington Post. 7 July 2015. https://www.washingtonpost.com/opinions/greece-is-trapped-by-the-euro/2015/07/07/a91c0466-24d8-11e5-aae2-6c4f59b050aa_story.html?noredirect=on. Retrieved 7 April 2019. 
  10. "The Euro Is a Straitjacket for Greece". The New York Times. 30 June 2015. https://www.nytimes.com/roomfordebate/2015/06/30/should-greece-abandon-the-euro/the-euro-is-a-straitjacket-for-greece. Retrieved 7 April 2019. 
  11. 11.0 11.1 "Update of the Hellenic Stability and Growth Programme". European Commission. 15 January 2010. http://ec.europa.eu/economy_finance/sgp/pdf/20_scps/2009-10/01_programme/el_2010-01-15_sp_en.pdf.