Greek crisis in perspective: Origins, effects and ways-out

Abstract

In the aftermath of the global financial crisis of 2008, a number of Eurozone countries were engulfed in a spiral of rising public deficits and explosive borrowing costs that eventually drove them out of markets and into bail-out agreements jointly undertaken by the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB). Greece was by far the most perilous case with a double-digit fiscal deficit, an accelerating public debt which in GDP terms was twice as much the Eurozone average and an external deficit near 5,000 US Dollars per capita in 2008, one of the largest worldwide. No wonder that Greece was the first to seek the bail-out assistance and the last expected to exit its ever-changing conditionality terms.