EMU and the Greek crisis: The political-economy perspective
AbstractWe 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 InfoIf 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.
Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 26 (2010)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505544
Greece Monetary union Fiscal policy Stability and Growth Pact Political capture Bureaucracy Rents;
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.:
- Gian Maria Milesi-Ferrett & Assaf Razin, 1996. "Sustainability of Persistent Current Account Deficits," NBER Working Papers 5467, National Bureau of Economic Research, Inc.
- 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.
- Friedrich Schneider, 2004. "Shadow Economies around the World: What do we really know?," IAW Discussion Papers 16, Institut für Angewandte Wirtschaftsforschung (IAW).
- 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.
- 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.
- Hagen, Jürgen von, 2006.
"Fiscal Rules and Fiscal Performance in the EU and Japan,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
147, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- von Hagen, Jürgen, 2005. "Fiscal Rules and Fiscal Performance in the EU and Japan," CEPR Discussion Papers 5330, C.E.P.R. Discussion Papers.
- 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.
- Corden, W. Max, 1994. "Economic Policy, Exchange Rates, and the International System," OUP Catalogue, Oxford University Press, number 9780198774099.
- Rodrik, Dani, 1998.
"Democracies Pay Higher Wages,"
CEPR Discussion Papers
1776, C.E.P.R. Discussion Papers.
- 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.
- Olivier Blanchard, 2007. "Adjustment within the euro. The difficult case of Portugal," Portuguese Economic Journal, Springer, vol. 6(1), pages 1-21, April.
- McKinnon, Ronald I & Pill, Huw, 1997. "Credible Economic Liberalizations and Overborrowing," American Economic Review, American Economic Association, vol. 87(2), pages 189-93, May.
- 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.
- 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.
- 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.
- Edwin Truman, 2005. "Budget and external deficits: not twins but the same family," Proceedings, Federal Reserve Bank of San Francisco, issue Feb.
- 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.
- 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.
RePEc Biblio mentionsAs found on the RePEc Biblio, the curated bibliography for Economics:CitEc Project, subscribe to its RSS feed for this item.
- 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.
- Di Bartolomeo Giovanni & Giuli Francesco, 2009. "Fiscal and monetary interaction under monetary policy uncertainty," wp.comunite 0061, Department of Communication, University of Teramo.
- Bitros, George C., 2012. "From Riches to Rags or What Went Wrong in Greece," MPRA Paper 43504, University Library of Munich, Germany.
- Peroni, Chiara & DiMaria, Charles Henri, 2012.
"A new unit labour cost changes decomposition Four pillars of cost competitiveness recovery,"
38670, University Library of Munich, Germany.
- Charles-Henri Dimaria & Chiara Peronni, 2012. "A new unit labour cost changes decomposition Four pillars of cost competitiveness recovery," Working Papers halshs-00826324, HAL.
- 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.
- Bitros, George C., 2013. "European Union failures in Greece and some possible explanations," MPRA Paper 45017, University Library of Munich, Germany.
- 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.
- Athanasios Tagkalakis, 2012.
"The effects of financial crisis on fiscal positions,"
145, Bank of Greece.
- Tagkalakis, Athanasios, 2013. "The effects of financial crisis on fiscal positions," European Journal of Political Economy, Elsevier, vol. 29(C), pages 197-213.
- 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.
- Thomas Moutos & Lambros Pechlivanos, 2013. "The Democratization of Rent Seeking in Greece," CESifo Working Paper Series 4331, CESifo Group Munich.
- Charles-Henri Dimaria & Chiara Peroni, 2012. "Unit labor cost and productivity recovery under non neutral technical change," Working Papers halshs-00826351, HAL.
- Luigi Bonatti & Andrea Fracasso, 2013. "Origins and prospects of the Euro existential crisis," DEM Discussion Papers 2013/03, Department of Economics and Management.
- 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.
- 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.
If references are entirely missing, you can add them using this form.