The Greek Crisis

Abstract

The Greek economy went through a period of unprecedented boom during 1996–2007. However, it plunged into a deep recession since 2008. The contraction of the Greek economy since 2008 drove the Greek Government into a sovereign debt crisis in 2010. The Greek Government sought the assistance of the European Commission, European Central Bank, and the IMF, henceforth referred to as the troika, to service its debt. The troika obliged, but in exchange imposed on Greece stringent austerity measures. The objective of this chapter is to explain the above-mentioned booms and recessions in the Greek economy and the cause of the sovereign debt crisis in Greece. It also carefully analyzes the implications of the austerity measures and attributes the perpetuation and deepening of the recession in the Greek economy since 2010 to them. It also suggests the measures that would have raised Greece’s growth rate to a high level and resolved Greece’s sovereign debt crisis.