![]() īetween 19, Greece's debt-to-GDP ratio steadily rose, surpassing the average of what is today the Eurozone in the mid-1980s. Indeed, accession to the EEC (and later the European Union) was predicated on keeping the debt-to-GDP well below the 60% level, and certain members watched this figure closely. During the 30-year period immediately prior to its entrance into the European Economic Community in 1981, the Greek government's debt-to-GDP ratio averaged only 19.8%. Actually, during the 20th century, Greece enjoyed one of the highest GDP growth rates in the world and average Greek government debt-to-GDP from 1909 to 2008 (a century until the eve of the debt crisis) was lower than that of the UK, Canada or France. While economists Carmen Reinhart and Kenneth Rogoff wrote that "from 1800 until well after World War II, Greece found itself virtually in continual default", (referring to a period which included Greece's war of independence, two wars with the Ottoman Empire, two Balkan wars, two World Wars, and a Civil War) Greece recorded fewer cases of default than Spain or Portugal in the aforementioned period (in reality starting from 1830, as this was the year of Greece's independence). Greece, like other European nations, had faced debt crises in the 19th century, as well as a similar crisis in 1932 during the Great Depression. 11 Criticism of the role of news media and stereotypingįurther information: Greek government-debt crisis timeline § Background Historical debt Average public debt-to-GDP.10 Effect of applied programmes on the debt crisis.8.1 Electronic payments to reduce tax evasion.7 Economic, social and political effects.4.4 Effects on the GDP compared to other Eurozone countries.4.3 Third Economic Adjustment Programme.4.2 Second Economic Adjustment Programme. ![]() 4.1 First Economic Adjustment Programme.3.1.1 Fraudulent statistics, revisions and controversies.1.2 Evolutions after birth of euro currency.However, during the same period the Greek debt-to-GDP ratio rose up from 127% to 179% due to the severe GDP drop during the handling of the crisis. At that time, debt levels stood at €323bn or some €30,000 per capita, little changed since the beginning of the crisis and at a per capita value below the OECD average, but high as a percentage of the respective GDP.īetween 20, the Greek government debt rose from €300bn to €318bn. Despite these efforts, the country required bailout loans in 2010, 2012, and 2015 from the International Monetary Fund, Eurogroup, and 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 recapitalisation and other resulting needs).Īfter 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 (the payment was made with a 20-day delay). 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. 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. about 11% higher than previously reported. The crisis included revelations that previous data on government debt levels and deficits had been underreported by the Greek government: the official forecast for the 2009 budget deficit was less than half the final value as calculated in 2010, while after revisions according to Eurostat methodology, the 2009 government debt was finally raised from $269.3bn to $299.7bn, i.e. The Greek 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. As a result, the Greek political system has been upended, social exclusion increased, and hundreds of thousands of well-educated Greeks have left the country. In all, the Greek economy suffered the longest recession of any advanced mixed economy to date. Widely known in the country as The Crisis ( Greek: Η Κρίση), 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 small-scale humanitarian crisis. Greece faced a sovereign debt crisis in the aftermath of the financial crisis of 2007–2008.
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