Conclusion

Abstract

The profound economic crisis which has convulsed Greek society since 2009 is linked to the global crisis of the international economy, starting with the collapse of Lehman Brothers in the United States in 2008. The global crisis is related to the fact that despite the various plans opted for (initially a continuation of Keynesianism, then the adoption of permanent wage restraint, an increase in public debt, introduction of flexible forms of employment, financialization), it did not become feasible for the—genuine—rise in profitability to be returned to the levels of the global crisis of 1973. On the contrary, the resort to financialization generated a series of bubbles which began to explode after the bankruptcy of Lehman Brothers, projecting crisis phenomena across a wide range of national and international transactions. The way the crisis was managed in the United States was more straightforward, given that it is a single state, so that they were able to purchase toxic bonds and proceed with provision of low interest loans to the banks by virtue of the liquidity made available to them through their ability to print new money. On the contrary, in the European Union (EU) and the Economic and Monetary Union, of which Greece is a member, things were more difficult. It is not a single state, so that it was not possible to pursue exactly the same policy. The solution that was chosen was to provide liquidity to the banks enabling them to ger rid of the toxic bonds. But some of the money received by the banks, and this is what is different from the United States, was used to purchase collateralized debt obligations (CDOs), while at the same time limits were imposed on the ability of the countries of the European periphery to secure loans. This led to a rise in the profitability of state bonds and an explosive proliferation of CDOs. Greece, which faced the greatest problem with its current account balance, suffered the heaviest damage because of the difficulty it faced in borrowing to service its debt, with the result that it was obliged to seek the required sums through special agreements with the EU, the European Central Bank and the International Monetary Fund.

Appendix

Table 11.1 Evolution of house prices

Table 11.2 US mortgage loans 2001–2006 ($ billions)