Greek government-debt crisis

Economy of Greek government-debt crisis
Early 2009 – Late 2018 (10 years)[1][2][3]
Statistics
GDP200.29 billion (2017)
GDP rank51 (nominal per World Bank 2017)
GDP per capita
23,027.41 (2017)
GDP per capita rank
47 (per World Bank 2017)
External
$372 billion as of September 2019[4]
All values, unless otherwise stated, are in US dollars.
Greek debt crisis

Election articles:

Greek government debt crisis articles:

Greece faced a sovereign debt crisis in the aftermath of the 2007–2008 financial crisis. Widely known in the country as The Crisis (Greek: Η Κρίση, romanized: I Krísi), it reached the populace as a series of sudden reforms and austerity measures that led to impoverishment and loss of income and property, as well as a humanitarian crisis.[5][6] In all, the Greek economy suffered the longest recession of any advanced mixed economy to date and became the first developed country whose stock market was downgraded to that of an emerging market in 2013.[7] As a result, the Greek political system was upended, social exclusion increased, and hundreds of thousands of well-educated Greeks left the country[8] (most of whom had returned to the country as of 2024[9]).

The crisis started in late 2009, triggered by the turmoil of the world-wide Great Recession, structural weaknesses in the Greek economy, and lack of monetary policy flexibility as a member of the eurozone.[10][11][12][13] The crisis included revelations that previous data on government debt levels and deficits had been underreported by the Greek government;[14][15][16] indeed, the official forecast for the 2009 budget deficit was less than half the final value, and after revisions according to Eurostat methodology, the 2009 government debt was raised from $269.3bn to $299.7bn, about 11% higher than previously reported.[citation needed]

The crisis led to a loss of confidence in the Greek economy, indicated by a widening of bond yield spreads and rising cost of risk insurance on credit default swaps compared to the other Eurozone countries, particularly Germany.[17][18] The government enacted 12 rounds of tax increases, spending cuts, and reforms from 2010 to 2016, which at times triggered local riots and nationwide protests. Despite these efforts, the country required bailout loans in 2010, 2012, and 2015 from the International Monetary Fund, Eurogroup, and the European Central Bank, and negotiated a 50% "haircut" on debt owed to private banks in 2011, which amounted to a €100bn debt relief (a value effectively reduced due to bank recapitalization and other resulting needs).

After a popular referendum which rejected further austerity measures required for the third bailout, and after closure of banks across the country (which lasted for several weeks), on 30 June 2015, Greece became the first developed country to fail to make an IMF loan repayment on time[19] (the payment was made with a 20-day delay).[20][21] At that time, debt levels stood at €323bn or some €30,000 per capita,[22] little changed since the beginning of the crisis and at a per capita value below the OECD average,[23] but high as a percentage of the respective GDP.

Between 2009 and 2017, the Greek government debt rose from €300bn to €318bn.[24][25] However, during the same period the Greek debt-to-GDP ratio rose up from 127% to 179%[24] due to the severe GDP drop during the handling of the crisis.[26][27]

Greek GDP
  Real GDP (chained 2010 Euros)
  Nominal GDP
Relative change in unit labour costs in 2000–2012
Relative change in unit labour costs, 2000–2017
Real unit labour costs: total economy (ratio of compensation per employee to nominal GDP per person employed)
  1. ^ "Eurozone hails Greece's exit from bailout as end of crisis". Financial Times.
  2. ^ Schreuer, Milan; Kitsantonis, Niki (22 June 2018). "Greece Prepares to Stagger Back From Debt Crisis, the End of Bailouts in Sight". The New York Times.
  3. ^ "'Greece crisis over' as Eurozone agrees debt relief plan". France24.com. Retrieved 19 May 2020.
  4. ^ "National Debt of Greece". ceicdata.com. 13 March 2020.
  5. ^ "BBC: Η Ελλάδα βιώνει ανθρωπιστική κρίση -Εννέα αποκαλυπτικά γραφήματα [εικόνες]" [Greece is experiencing a humanitarian crisis – New revealing charts [images]]. iefimerida.gr (in Greek). 20 July 2015.
  6. ^ Kostoulas, Vasilis (26 March 2015). "Η Ελλάδα και η ανθρωπιστική κρίση" [Greece and the humanitarian crisis]. Naftemporiki.gr (in Greek).
  7. ^ Dunkley, Jamie (12 June 2013). "Greece becomes first developed country to be downgraded to emerging-market status | The Independent". The Independent. Retrieved 5 June 2024.
  8. ^ Oxenford, Matthew; Chryssogelos, Angelos (16 August 2018). "Greek Bailout: IMF and Europeans Diverge on Lessons Learnt". Chatham House. Retrieved 20 August 2018.
  9. ^ "Πώς το brain drain γίνεται… brain gain" [How brain drain becomes... brain gain]. Tanea.gr (in Greek). 12 August 2024. Retrieved 27 August 2024.
  10. ^ "Greece is trapped by the euro". The Washington Post. 7 July 2015. Retrieved 7 April 2019.
  11. ^ "The Euro Is a Straitjacket for Greece". The New York Times. 30 June 2015. Retrieved 7 April 2019.
  12. ^ Lapavitsas, Costas (2019). "Political Economy of the Greek Crisis". Review of Radical Political Economics. 51 (1): 31–51. doi:10.1177/0486613417730363. ISSN 0486-6134.
  13. ^ Papadopoulou, Angeliki; Gouzoulis, Giorgos (2020). "Social Structures of Accumulation in Greece, 1980–2014". Review of Political Economy. 32 (2): 199–215. doi:10.1080/09538259.2020.1769281. ISSN 0953-8259.
  14. ^ Higgins, Matthew; Klitgaard, Thomas (2011). "Saving Imbalances and the Euro Area Sovereign Debt Crisis" (PDF). Current Issues in Economics and Finance. 17 (5). Federal Reserve Bank of New York. Retrieved 11 November 2013.
  15. ^ George Matlock (16 February 2010). "Peripheral euro zone government bond spreads widen". Reuters. Retrieved 28 April 2010.
  16. ^ "Acropolis now". The Economist. 29 April 2010. Retrieved 22 June 2011.
  17. ^ "Greek/German bond yield spread more than 1,000 bps". Reuters.com. 28 April 2010. Retrieved 5 May 2010.
  18. ^ "Gilt yields rise amid UK debt concerns". Financial Times. 18 February 2010. Retrieved 15 April 2011.
  19. ^ Becatoros, Elena; Casert, Raf (30 June 2015). "Greece fails to make IMF payment as bailout expires". CTVNews. Retrieved 3 July 2015.
  20. ^ "IMF: Greece makes overdue payments, no longer in default". eKathimerini. 20 July 2015. Retrieved 10 September 2018.
  21. ^ "IMF: Greece makes overdue payments, no longer in default". EUBusiness. 20 July 2015. Retrieved 10 September 2018.
  22. ^ "Greece debt crisis: Eurozone rejects bailout appeal". BBC News. 30 June 2015. Retrieved 21 May 2020.
  23. ^ "This is how much debt your country has per person". 4 October 2017. Retrieved 1 August 2018.
  24. ^ a b "Eurostat (Government debt data)". Eurostat. Retrieved 5 September 2018.
  25. ^ "Eurostat (2017 Government debt data)". Eurostat. 24 April 2018. Retrieved 5 September 2018.
  26. ^ "2010–2018 Greek Debt Crisis and Greece's Past: Myths, Popular Notions and Implications". Academia.edu. Retrieved 14 October 2018.
  27. ^ "Fiscal Austerity After The Great Recession Was A Catastrophic Mistake". Forbes. 31 August 2017. Retrieved 25 December 2018.