When Did It Go Wrong? The Case of Greek Sovereign Debt
- 870 Downloads
This chapter analyses the fiscal stance of the Greek public sector over the period 2001–2016. It distinguishes between three periods: 2001–2006, during which the Greek economy attained much larger growth rates than most EU countries but despite that the general government primary deficit was on average about 2 percentage points higher than the EU-28 average; 2007–2009, during which the primary fiscal deficit soared, reaching a record value of 10.1% in 2009; finally, 2010–2016, during which the Greek economy entered a long phase of fiscal consolidation and by 2014 the fiscal budget even experienced a small primary surplus. What factors contributed to more-than-average (relative to the EU countries) fiscal imbalances during the first phase, in spite of high economic growth? Was the 2009 fiscal deficit revenue or expenditure driven? How was fiscal consolidation achieved during the last phase? What implications does this bear for future economic growth rate and the ability of Greece to pay back its debt? The chapter concludes by providing some recommendations for future fiscal policy making and the way ahead.
- Adamczyk, G., and B. Windisch. 2015. State Aid to European Banks: Returning to Viability. Occasional Papers by the Competition Directorate-General of the European Commission, No 1.Google Scholar
- Attinasi, M.G., and L. Metelli. 2016. Is Fiscal Consolidation Self-defeating? A Panel-VAR Analysis for the Euro Area Countries. ECB Working Paper Series No. 1883.Google Scholar
- Brender, A., and A. Drazen. 2004. Political Budget Cycles in New Versus Established Democracies. NBER Working Paper Series No. 10539.Google Scholar
- Colasanti, F. 2016. Financial Assistance to Greece: Three Programmes. Discussion Paper Series, European Policy Centre.Google Scholar
- Demekas, D., and Z. Kontolemis. 1998. Unemployment in Greece: A Review of the Problem. Athens: Economic and Industrial Research Institute.Google Scholar
- ESM. 2014. Annual Report. https://www.esm.europa.eu/sites/default/files/esm2014annual-report.pdf.
- ESM. 2016. Factsheet: ESM/EFSF Programmes for Greece. https://www.esm.europa.eu/sites/default/files/2016_11_11_greece_factsheet.pdf.
- European Commission. 2012. The Second Economic Adjustment Programme for Greece: First Review—December 2012, Occasional Papers 123.Google Scholar
- Eurostat Report. 2004. Revision of the Greek Government Deficit and Debt Figures. http://ec.europa.eu/eurostat/documents/4187653/5765001/GREECE-EN.PDF/2da4e4f6-f9f2-4848-b1a9-cb229fcabae3?version=1.0.
- Eurostat Report. 2010. Report on the EDP Methodological Visits to Greece in 2010. http://ec.europa.eu/eurostat/documents/1015035/3991231/Greece-2010-methodological-visits-report.pdf.
- Hondroyiannis, G. 1999. The Causality between Government Spending and Government Revenue in Greece. Bank of Greece, Economic Bulletin 13: 27–42.Google Scholar
- IMF. 2016. Greece: Preliminary Debt Sustainability Analysis—Updated Estimates and Further Considerations (Country Rep. No. 16/130).Google Scholar
- Maddison, A. 1995. Monitoring the World Economy, 1820–1992. Paris: OECD Development Studies.Google Scholar
- Manessiotis, V., and R.D. Reischauer. 2001. Greek Fiscal and Budget Policy and EMU. In Greece’s Economic Performance and Prospects, Ch. 2, ed. C. Bryant, N. Gargans, and G. Tavlas. Athens, Greece: Bank of Greece and The Brookings Institution.Google Scholar
- OECD. 2005. Economic Surveys: Greece, Volume 2015/12—September 2005.Google Scholar
- Reuters. 2017. Greece on Track for 2018 Primary Surplus Target: EU. http://www.reuters.com/article/us-eurozone-greece-idUSKBN15A1XO. Accessed 10 Feb 2017.
- Xafa, M. 2014. Sovereign Debt Crisis Management: Lessons from the 2012 Greek Debt Restructuring. CIGI Papers, No. 33.Google Scholar