Advanced Search
MyIDEAS: Login to save this article or follow this journal

EMU and the Greek crisis: The political-economy perspective

Contents:

Author Info

  • Katsimi, Margarita
  • Moutos, Thomas

Abstract

We describe the political-economic environment that precipitated the Greek crisis. Involved were collaborations between private interests and the formally elected and appointed custodians of the public interest, and a captured politicized government bureaucracy. The confluence of these forces resulted in the pilfering of public funds, rampant tax evasion, and deterioration in the quality of publicly provided goods. From a macroeconomic perspective, the failure of successive Greek governments to reverse the decline in the national saving rate, and not the government budget deficit per se, was the main reason for the crisis. There was misrepresentation of official Greek national statistics but the inability or unwillingness of EMU authorities to react to visible portents of Greek failure, such as ongoing large current account deficits that were not hidden by "Greek statistics", exposes a major fault line in the EMU's design and implementation through the Stability and Growth Pact.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V97-50X2N89-1/2/8a3a92637cc448cbb3de6222590db0d9
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 26 (2010)
Issue (Month): 4 (December)
Pages: 568-576

as in new window
Handle: RePEc:eee:poleco:v:26:y:2010:i:4:p:568-576

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505544

Related research

Keywords: Greece Monetary union Fiscal policy Stability and Growth Pact Political capture Bureaucracy Rents;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Olivier Blanchard, 2007. "Adjustment within the euro. The difficult case of Portugal," Portuguese Economic Journal, Springer, vol. 6(1), pages 1-21, April.
  2. Dani Rodrik, 1999. "Democracies Pay Higher Wages," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 707-738, August.
  3. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September.
  4. von Hagen, Jürgen, 2005. "Fiscal Rules and Fiscal Performance in the EU and Japan," CEPR Discussion Papers 5330, C.E.P.R. Discussion Papers.
  5. Marjit, Sugata & Mukherjee, Vivekananda & Mukherjee, Arijit, 2000. "Harassment, corruption and tax policy," European Journal of Political Economy, Elsevier, vol. 16(1), pages 75-94, March.
  6. Alan Ahearne & Brigit Schmitz & Jürgen von Hagen, 2007. "Current Account Imbalances in the Euro Area (draft version)," CASE Network Studies and Analyses 0345, CASE-Center for Social and Economic Research.
  7. Carmen M. Reinhart & Kenneth S. Rogoff, 2011. "From Financial Crash to Debt Crisis," American Economic Review, American Economic Association, vol. 101(5), pages 1676-1706, August.
  8. Corden, W. Max, 1994. "Economic Policy, Exchange Rates, and the International System," OUP Catalogue, Oxford University Press, number 9780198774099, Octomber.
  9. McKinnon, Ronald I & Pill, Huw, 1997. "Credible Economic Liberalizations and Overborrowing," American Economic Review, American Economic Association, vol. 87(2), pages 189-93, May.
  10. Swan, Peter L., 2009. "The political economy of the subprime crisis: Why subprime was so attractive to its creators," European Journal of Political Economy, Elsevier, vol. 25(1), pages 124-132, March.
  11. Angelopoulos, Konstantinos & Philippopoulos, Apostolis & Vassilatos, Vanghelis, 2009. "The social cost of rent seeking in Europe," European Journal of Political Economy, Elsevier, vol. 25(3), pages 280-299, September.
  12. Elias Mossialos & Sara Allin & Konstantina Davaki, 2005. "Analysing the Greek health system: a tale of fragmentation and inertia," Health Economics, John Wiley & Sons, Ltd., vol. 14(S1), pages S151-S168.
  13. Edwin Truman, 2005. "Budget and external deficits: not twins but the same family," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
  14. Myles, Gareth D., 2000. "Wasteful government, tax evasion, and the provision of public goods," European Journal of Political Economy, Elsevier, vol. 16(1), pages 51-74, March.
  15. Harberger, Arnold C, 1980. "Vignettes on the World Capital Market," American Economic Review, American Economic Association, vol. 70(2), pages 331-37, May.
  16. Gian Maria Milesi-Ferrett & Assaf Razin, 1996. "Sustainability of Persistent Current Account Deficits," NBER Working Papers 5467, National Bureau of Economic Research, Inc.
  17. Tsakalotos, Euclid, 1998. "The Political Economy of Social Democratic Economic Policies: The Pasok Experiment in Greece," Oxford Review of Economic Policy, Oxford University Press, vol. 14(1), pages 114-38, Spring.
  18. Hillman, Arye L. & Swank, Otto, 2000. "Why political culture should be in the lexicon of economics," European Journal of Political Economy, Elsevier, vol. 16(1), pages 1-4, March.
  19. Guillermo A. Calvo, 1998. "Capital Flows and Capital-Market Crises: The Simple Economics of Sudden Stops," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 35-54, November.
Full references (including those not matched with items on IDEAS)

Citations

RePEc Biblio mentions

As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Political Economy > The Political Economy of the European Union > The Political Economy of Greece
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Matthias Bauer & Martin Zenker, 2012. "Market Discipline Under A Politicised Multilateral Fiscal Rule - Lessons from the Stability and Growth Pact Debate," Global Financial Markets Working Paper Series 2012-35, Friedrich-Schiller-University Jena.
  2. Muscatelli, Vito A. & Natale, Piergiovanna & Tirelli, Patrizio, 2012. "A simple and flexible alternative to Stability and Growth Pact deficit ceilings. Is it at hand?," European Journal of Political Economy, Elsevier, vol. 28(1), pages 14-26.
  3. Goel, Rajeev K. & Nelson, Michael A. & Naretta, Michael A., 2012. "The internet as an indicator of corruption awareness," European Journal of Political Economy, Elsevier, vol. 28(1), pages 64-75.
  4. Peroni, Chiara & DiMaria, Charles Henri, 2012. "A new unit labour cost changes decomposition Four pillars of cost competitiveness recovery," MPRA Paper 38670, University Library of Munich, Germany.
  5. Di Bartolomeo, Giovanni & Giuli, Francesco, 2011. "Fiscal and monetary interaction under monetary policy uncertainty," European Journal of Political Economy, Elsevier, vol. 27(2), pages 369-375, June.
  6. Athanasios Tagkalakis, 2012. "The effects of financial crisis on fiscal positions," Working Papers 145, Bank of Greece.
  7. Kasimati, Evangelia & Veraros, Nikolaos, 2013. "Should Greece adopt a dual-currency regime to resolve its economic crisis?," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 588-600.
  8. Giancarlo Corsetti & Michael P. Devereux & John Hassler & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2011. "Chapter 3: Greece," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 97-125, 02.
  9. Marta Gómez-Puig & Simón Sosvilla-Rivero & María del Carmen Ramos-Herrera, 2014. "An update on emu sovereign yield spread drivers in times of crisis: a panel data analysis," Working Papers 14-07, Asociación Española de Economía y Finanzas Internacionales.
  10. Bitros, George C., 2013. "European Union failures in Greece and some possible explanations," MPRA Paper 45017, University Library of Munich, Germany.
  11. Charles-Henri Dimaria & Chiara Peroni, 2012. "Unit labor cost and productivity recovery under non neutral technical change," Working Papers halshs-00826351, HAL.
  12. Thomas Moutos & Lambros Pechlivanos, 2013. "The Democratization of Rent Seeking in Greece," CESifo Working Paper Series 4331, CESifo Group Munich.
  13. Georgia Kaplanoglou & Vassilis T. Rapanos, 2013. "Fiscal Deficits and the Role of Fiscal Governance: The case of Greece," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 43(1), pages 5-30, March.
  14. Shun-ichiro Bessho & Kimiko Terai, 2013. "Fiscal restraints by advisors," Economics of Governance, Springer, vol. 14(3), pages 205-232, August.
  15. Luigi Bonatti & Andrea Fracasso, 2013. "Origins and prospects of the Euro existential crisis," DEM Discussion Papers 2013/03, Department of Economics and Management.
  16. Bitros, George C., 2012. "From Riches to Rags or What Went Wrong in Greece," MPRA Paper 43504, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:26:y:2010:i:4:p:568-576. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.