Greek Sovereign Debt Crisis Research Articles

Tail connectedness between category-specific policy uncertainty, sovereign debt risk, and stock volatility during a high inflation period

Greece has experienced high inflation, increased fiscal deficit and debt in recent years, and whether the Greek sovereign debt crisis will resurrect has triggered widespread discussion. This study explores the tail connectedness between category-specific economic policy uncertainty (EPUs), sovereign debt risk (SR), and stock volatility in Greece using a connectedness method based on the quantile VAR model. The findings show that (i) The total connectedness index (TCI) features a U-shaped structure that varies with the conditional quantiles of variables, demonstrating that the spillover effect under extreme conditions for variables is greater than under normal conditions; (ii) Under different market conditions, we observe an apparent heterogeneity in the magnitude of category-specific EPUs' effects on the SR; (iii) The Russia-Ukraine war and the COVID-19 pandemic both have a bigger effect on the TCI than other periods; (iv) SR has shifted from being a net spillover receiver in the median and left tail to a net spillover transmitter in the right tail.

Transmission of the 2010 Greek sovereign debt crisis to Asia-Pacific stock markets: a copula-based approach

Transmission of the 2010 Greek sovereign debt crisis to Asia-Pacific stock markets: a copula-based approach

Deficits and biases in the leading German press coverage of the Greek sovereign debt crisis

Abstract In times of crisis and social turbulence, the mass media play a crucial role. This becomes particularly evident in economic crises within the European Union. The (biased) way the crisis is reported shapes people’s understanding of the crisis and the parties involved. In this study, the coverage of the Greek sovereign debt crisis in the German newspapers BILD, Die Welt, Frankfurter Allgemeine Zeitung, Süddeutsche Zeitung, tageszeitung and Der Spiegel (online) is examined for the quality criteria relevance, neutrality, balance, and analytical quality. The results show that the reporting is appropriate to the relevance of the topic, but shows deficits in the criteria of balance, neutrality, and analytical quality. During the study period, coverage focuses on a small number of topics, journalists include their value judgments in news and reports. Overall, there is an obvious media bias against the Greek government’s position.

Transmission of the 2010 Greek sovereign debt crisis to Asia-Pacific stock markets: A copula-based approach

Transmission of the 2010 Greek sovereign debt crisis to Asia-Pacific stock markets: A copula-based approach

The Greek sovereign debt crisis as an important chapter in the history of the European Monetary Union: empirical evidence and some thoughts on implications for investors and financial risk managers

After the burst of the US real estate price bubble in 2008, the events in Greece played, at least for some time, a unique role on the path towards the European sovereign debt crisis. We examine this issue empirically and then discuss some relevant questions for policymakers, regulators, fixed income investors, and financial risk managers. Our findings should be of interest when modeling risk premia determined in the market for sovereign bonds issued by countries that have introduced the Euro. Given the exposure of the European insurance industry to these fixed-income securities, the results are important for asset managers and financial risk managers that are working in this segment of the financial services industry.

Ten Years On, Two Crises Later: Evaluating EMU Institutional Reforms Since 2010

The article systematically reviews EMU governance reforms implemented, policy instruments introduced and further institutional reforms currently under discussion with a view of how far they have addressed the institutional shortcomings of the euro-area architecture, which have led to the euro crisis of 2010ff. It further explores how far these reforms have helped to prevent a replay of that crisis when the COVID-19 pandemic hit the euro area. To this end, the article first reviews the academic debate about the causes of the euro crisis that started with the Greek sovereign debt crisis in 2010. In a second step, it evaluates the reforms implemented since the onset of the euro crisis and during the COVID-19 crisis with regard in how far these reforms have addressed or could address the causes of the crisis and gives an outlook on potential forthcoming problems.

Greek Gastarbeiter in Germany and European Expatriates from Greece: Diaspora Interactions between Immigrants and Neo-Immigrants

Between 1953 and 1973, emigration depleted the Modern Greek state by roughly one fifth of its total population. A significant number of those migrants relocated to Germany, which since 1960, has been home to a sizeable community of former Gastarbeiter (guest-workers) and their descendants. Following three decades of European Integration and relative prosperity, the 2009 Greek sovereign debt crisis initiated a new wave of Greek emigration, analogous, yet different to that of the post-war era. Germany remains an attractive destination for Greek expatriates, but in contrast to guest-workers from the 1960s, "neo-migrants" are typically skilled or highly-skilled persons who relocate individually. This paper examines the qualitative attributes of Greek expatriates and "neo-migrants" in Germany and compares them to those of former guest-workers; furthermore, this paper compares the narratives of Gastarbeiter to those of European expatriates. Finally, the perceptions of Greek expatriates for the established Greek community in Germany are looked into, as well as the individual and collective efforts of the Greek community and institutions to help and ease their socioeconomic integration. Keywords: Gastarbeiter, neo-migrants, expatriates, Germany, Greece

Coalition-making under conditions of ideological mismatch: The populist solution

This article problematizes how non-spatial factors facilitate the formation of extraordinary ideologically mismatched government coalitions. An intensive case study analysis of the SYRIZA–ANEL governments in Greece (2015–2019) suggests that a shared symbolic discourse directed against mainstream contenders allowed elite actors with widely disparate programmatic commitments to circumvent rigid constraints imposed by minimal range theory. Under conditions of acute polarization and socioeconomic upheaval owing to the Greek sovereign debt crisis, a strategic use of populist anti-bailout discourse upset the usual order of party competition along spatial dimensions, fostering cross-ideological cohabitation at the executive level between the radical-left SYRIZA and the radical-right ANEL for a total of four years. However, an office-seeking approach based on a populist symbolic framework to represent salient grievances cannot fully eliminate policy dissension. Once core ideological commitments become explicitly challenged, inelastic policy-oriented factions and voting blocs may ultimately precipitate the expiration of the populist coalition.

Austerity, Assistance and Institutions: Lessons from the Greek Sovereign Debt Crisis

This paper studies the Greek sovereign debt crisis in the aftermath of the 2007-8 global financial crisis looking for barriers to, and engines of, growth. The vehicle is a calibrated medium-scale micro-founded macroeconomic model. Departing from 2008, our simulations show that the adopted economic adjustment program (the fiscal austerity mix combined with the fiscal and monetary assistance provided by the EU, ECB and IMF), jointly with the observed deterioration in institutional quality (the degree of protection of property rights) can explain most (around 22% of GDP) of the cumulative loss in GDP in the data (around 26% of GDP) between 2008 and 2016. In particular, the economic adjustment program can explain a fall of around 12%, while the deterioration in property rights accounts for another 10%. Counterfactual simulations, on the other hand, show that this loss could have been around 9% only, if the country had followed a different fiscal policy mix; if the degree of product marker liberalization was closer to that in the core euro zone countries; and, above all, if institutional quality in Greece had simply remained at its pre-crisis level. On the other hand, in the absence of the official fiscal bailouts, the depression would be much deeper, while, the accommodative role played by the quantitative policies of the ECB has been vital to the Greek economy. These results can be useful in the face of the ongoing covid-19 crisis.Supplementary InformationThe online version contains supplementary material available at (10.1007/s11079-020-09613-3)

Greek Debt Restructuring Case

227State immunity — Jurisdictional immunity — Exceptions — Acta jure gestionis — Acta jure imperii — Once a trader always a trader — State of emergency — Law-making — Legislature regulating legal relations initially established by acta jure gestionis qualifying as acta jure imperiiEconomics, trade and finance — European Monetary Union — Hellenic Republic — Public debt — Bonds — Greek sovereign debt crisis — Sovereign debt restructuring — Collective Action Clauses — Secondary market — Bond exchange — Financial stabilityRelationship of international law and municipal law — Compatibility with Basic Law of the Federal Republic of Germany — General principle of international law — Article 25 of German Basic Law — Right to a lawful judge — The law of Germany

The impact of economic uncertainty and inflation uncertainty on the Greek economy

We provide estimates of economic uncertainty and inflation uncertainty for the Greek economy, and consider their time-varying impact on the corresponding macroeconomic variables, i.e. GDP growth and inflation. We find that, in both cases, the degree of uncertainty varies over time. Ιts impact on the underlying variable also fluctuates and is statistically significant and negative during both the global financial crisis and the Greek sovereign debt crisis, as well as during the COVID-19 pandemic. Thus, during these periods, uncertainty weighs on the economy’s fundamentals. Our findings have a number of policy implications, including that the extraordinary policy measures taken to contain the economic impact of the COVID-19 pandemic should be withdrawn gradually and with due caution, as any increase in uncertainty may have an adverse effect on economic activity and a deflationary impact on prices.

Greek Fiscal Policy in Times of Crisis: A New Proposed Framework

The present article aims to shed light on the critical matter of overcoming the existing Greek sovereign debt crisis, a crisis that brought to the surface the chronic structural problems of the Greek economy and the long-standing state distortions, by highlighting the importance of a sound and efficient fiscal policy administration model. The author identifies the problematic issues in the current fiscal policy procedures and proposes a new framework so as for the Greek economy to overcome the ongoing crisis and return to positive growth rates, while achieving sustainable growth, a perquisite for socioeconomic welfare. The overall target of this paper is to set the required fiscal policy mix so as for Greek economy to overcome current and future crises and hopefully initiate a fruitful discourse on the subject among all the involved parties.

When Do Banks Do What Governments Tell Them to Do? A Comparative Study of Greek Bonds’ Management in France and Germany at the Onset of the Euro-Crisis

ABSTRACT At the onset of the Greek sovereign debt crisis in early 2010, the French government asked French banks to retain plummeting Greek bonds on their balance sheets. And the French banks did exactly that. At around the same time, the German government also asked German banks to retain plummeting Greek bonds on their balance sheets. Yet German banks sold the bonds abundantly. Both governments depended on profit-oriented banks to fulfil a mission of public interest, but neither had formal levers to ensure that banks would do as they were told. Why did the French banks comply with their government’s request while their German counterparts did not? Taking advantage of an opportunistic design and building on data gathered in newspapers and through 20 in-depth interviews, this paper argues that banks’ decisions are the result of long-term institutionalized state-bank modes of coordination in France and Germany. In France, bankers understood the government’s request as being embedded within a long-term relationship of reciprocal favours, which led them to comply. In Germany, state officials resorted to straightforward pressures such as naming and shaming banks. But as soon as the pressure died down, the banks sold out.

Judicial and Constitutional Review During the Greek Sovereign Debt Crisis: A General Overview

Judicial and Constitutional Review During the Greek Sovereign Debt Crisis: A General Overview

News Coverage of the Greek Sovereign Debt Crisis in German Public Service Broadcasting: A Case Study Analysis in Tagesschau, Heute, Brennpunkt and ZDF Spezial

ABSTRACT This study analysed German public-service news coverage of the Greek sovereign debt crisis in the regular news bulletins Tagesschau and heute and the special broadcasts Brennpunkt and ZDF spezial (which provide supplementary reporting on special events) to establish whether the coverage met standards of relevance, neutrality, balance, diversity and analytic quality. It found that although the news coverage was commensurate with the relevance of the topic and satisfied the criterion of diversity, it fell short when it came to the criteria of neutrality, balance and analytic quality. During the study period, the coverage focused on a very small number of topics, journalists allowed their own value judgements and opinions to creep into news and reports, and overall there was an evident slant against the position of the Greek government.

Greek sovereign crisis and European exchange rates: effects of news releases and their providers

In this paper, we study the contribution of the geographical (both the regional and international) aspect of news releases, related to the Greek sovereign debt crisis. We investigate the impact of the Greek debt crisis via economic news and surprises on Euro exchange rate volatility and volatility-jumps within a Tobit regression framework. In particular, the impact of three categories of news is examined via the respective number of dummy variables, the number of news per day, and news surprises of 2-year, 5-year and 10-year government bonds and CDS. Also, the role of news releases providers is researched. The analysis starts from 1 July 2009 and ends on 31 May 2015. The data comprises intraday prices for (1) Euro to US dollar (Euro/USD), (2) Euro to Japanese yen (Euro/JPY), (3) Euro to Great British pound (Euro/GBP), (4) Euro to Swiss franc (Euro/CHF) and (5) Euro to Australian dollar (Euro/AUD). Our findings reveal that Greek events have an important impact on the behavior of the Euro exchange market. Secondly, the identity of the provider of news releases about the Greek sovereign crisis affects Europeś exchange rates highlighting homogeneity problems in the Eurozone. The uncertainty, introduced by the Greek sovereign crisis, as shown by our findings, signifies the financial instability in the Eurozone and the strength of the Euro currency. This is vital for policymakers in a common currency environment. Policymakers could evaluate such findings and re-examine the structural plan of the Euro, targeting primarily at the financial integration of the member states.

Did Spillovers From Europe Indeed Contribute to the 2010 U.S. Flash Crash?

Using intraday data, we study spillovers from European stock markets to the U.S. in the hours before the flash crash on 6 May 2010. Many commentators have pointed to negative market sentiment and high volatility during the European trading session before the Flash Crash. However, based on a range of vector autoregressive models, we find no robust evidence that spillovers increased at that time. On the contrary, spillovers on 6 May were mostly smaller than in the preceding days, during which there was great uncertainty surrounding the Greek sovereign debt crisis. The absence of evidence for spillovers underscores the difficulties in understanding the nature of flash events in financial markets.

Greek Government Bonds Immunity Case

State immunity — Jurisdictional immunity — Greek sovereign debt crisis — Distinction between acta jure imperii and acta jure gestionis — Greek debt restructuring law as acta jure imperii — Issuing of government bonds as acta jure gestionis — Plaintiffs’ claims based on performance of terms of issue of government bonds or compensation for their non-performance following debt restructuring — Whether State immunity applicableJurisdiction — gBrussels I Regulation — Lawsuits demanding performance of terms of issue of government bonds or compensation for their non-performance — Whether “civil matter” under the Brussels I Regulation — Whether Brussels I Regulation applicable — The law of Austria

Quality of financial reporting under IFRS and corporate governance influence: Evidence from the Greek banking sector during crisis

The financial system consists, without doubt, one of the most important determinants of the world national economies, which undergoes numerous changes and challenges with major impact on the economic growth prospects of a country. A healthy financial system is the steam engine of the economy, a major source for economic growth through which capitals are attracted for investments; hence, it is regarded as a trustee of financial stability. Given the difference in structure and function of the financial sector in various countries, we investigate the extent to which the implementation of International Financial Reporting Standards (IFRS) accompanied by Corporate Governance practices affected the quality of financial and narrative reporting offered within published statements of Greek banks for the period from 2008 to 2011. The originality of the work lies at the fact that it focuses on Greek financial institutions for a period that incorporates both the burst of global financial crisis and the beginning of the Greek sovereign debt crisis making inferences on quality of reporting as a result of IFRS and Corporate Governance practices adoption. Our analysis revealed the positive contribution of both of the above categories of variables to the accuracy and quality of the information offered to stakeholders.

From financial support package via rescue aid to bailout: Framing the management of the Greek sovereign debt crisis

In the spring of 2010 Greece officially turned to the EU for help in order to prevent itself from a sovereign default. However, the Treaty on European Union explicitly prohibits any member state to ask for a so-called bailout (i.e., financial assistance) from the other member states or the EU itself. Thus, overnight the Greek financial crisis became a linguistic one as well: how to communicate the notion of financial assistance without implying one? In light of this conundrum, the paper investigates how leading European and American newspapers have communicated the financial assistance by looking at the rather diverse expressions used for the notion of “bailout” that appeared in select articles published on the pivotal dates of the crisis management process. We hypothesized that as the Greek crisis developed, multiple and alternating frames were used in communicating the news on crisis management through the lexical choices the journalists used. The data justified the hypotheses: while the first phase was dominated by the RELIEF frame, this was eventually superseded by the BAILOUT frame by 2 May, the day the deal was finally struck. At the same time, the BUSINESS TRANSACTION frame never appeared as the most significant conceptualisation, implying that journalists were reluctant to view the deal between the two (eventually, three) parties as the result of a rational horizontal relationship between “buyer” and “seller” or between “debtor” and “creditor”.