The Greek Crisis Under Structural Constraints

Abstract

This article studies the Greek crisis since 2009 with a synthesized Marxian framework by embedding the Greek capital accumulation process into the capitalist core-periphery structure in the European Union, which deteriorated the competitiveness of Greece and adversely impacted its capital accumulation, leading to a relatively low profit rate in the neoliberal era. Institutions of the European Union helped Greece turn to debt-driven accumulation to sustain growth, especially the external debt of government, but the weak productive accumulation because of relatively low profit rate made the accumulation of debt unsustainable in the long run. When doubt was cast on Greece’s capacity to repay its debts, the economy lost external sources of funding, leading to a halt in debt expansion and the burst of the sovereign debt crisis. JEL Classification: E11, F02, O10