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The Greek Crisis

  • Spyros Sakellaropoulos
Chapter

Abstract

The basic problem of the Greek economy was not either the public sector being too large or salaries too high or working hours too short, given that none of this corresponds to reality. On the contrary, the Greek crisis results from a convergence of two factors. On the one hand, the growth model that had been in application up to that point (relatively low wages, strong ship-owning capital, a developed banking sector, tourism, European subsidies) had reached its limits. The reason for this was that productivity differentials due to the absence of production of high-tech products had become much more marked since the country’s accession to the European Monetary Union and the consequent loss of the capacity to resort to currency depreciation. High deficits arose because the downturn in the economy induced governments to reduce taxes on the most affluent social strata. On the other hand, there was the particularly brutal irruption of the global crisis into the country, with the result that the weakened Greek economy was unable to withstand the speculative attacks on it so that finally, faced with the danger of suspension of payments, the Papandreou government asked for help from the European Union, the European Central Bank and the International Monetary Fund.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Spyros Sakellaropoulos
    • 1
  1. 1.Department of Social PolicyPanteion UniversityAthensGreece

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