Assessment of the Effectiveness of Adjustment Programs at the Core of the Greek Economy

Aggelos Kotios,Thomas Poufinas,George Galanos

doi:10.4236/me.2018.99098

Aggelos Kotios, Thomas Poufinas + Show 1 more

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https://doi.org/10.4236/me.2018.99098

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Abstract

Despite the seven-year implementation of three adjustment programs to address the sovereign debt crisis, the Greek economy is still in a prolonged recession and faces problems of competitiveness, political stability and social cohesion. At the same time, the fiscal adjustment policy did not solve the original problem of public debt. On the contrary, as recent evidence shows, the country’s ability to service its debt has deteriorated. The causes of the crisis and the failure of the selected economic stabilization policies are a multidimensional and interrelated complex. The Greek economy has supported its growth in recent decades mainly in domestic consumption, with little presence in areas with high added value and extrovert features, focusing mainly on traditional business sectors with limited innovation characteristics. Ιn this study we will try on reasonable arguments but also with a series of statistical data and indicators from sources such as the Organization for Economic Cooperation and Development (OECD), the World Bank, the World Economic Forum (WEF) and the Greek authorities to analyze the course of the Greek economy, evaluate the results of the selected policies and to formulate appropriate policy proposals.

Highlights

By the end of 2009, Greek politics realized that the continuously growing public debt had reached such levels that it was almost impossible to manage, and drastic actions were required in order to put under control the whole situation
Ιn this study we will try on reasonable arguments and with a series of statistical data and indicators from sources such as the Organization for Economic Cooperation and Development (OECD), the World Bank, the World Economic Forum (WEF) and the Greek authorities to analyze the course of the Greek economy, evaluate the results of the selected policies and to formulate appropriate policy proposals
Greece had to ask for external help, and proceeded with a series of adjustment programs, in co-operation and with the guidance of a group of creditors comprised of European Union (EU) institutions and the International Monetary Fund (IMF)

Summary

Introduction

By the end of 2009, Greek politics realized that the continuously growing public debt had reached such levels that it was almost impossible to manage, and drastic actions were required in order to put under control the whole situation. Today, with the third such adjustment programme under implementation, the problems of the country are far from being solved. The promoted macroeconomic policy did not solve the problem of large public debt, but instead plunged the economy into a deep recession, drastically reducing its ability to serve the redemption of its debt [1] [2]

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