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Greece: A Classical Example of Failure to Join the Eurozone

Author

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  • Petre Prisecaru

Abstract

After the financial crisis Greece has received from Troika 240 billion euro within the two economic adjustment programmes between 2010 and 2014, most of the money coming from European Financial Stability Facility. The austerity policy imposed to Greece led to the decrease of deficits based on tax increases, wages and pensions cuts, unemployment rising, but also to a significant decrease of GDP by 25% in 2009-2013 period. The austerity and recession caused a huge public discontent and a prolonged political instability and finally the radical left wing coalition-Syriza- won the elections in 2015 and this brought a political blockage in the negotiations with Troika and to the prospect of a true Grexit, because Greece is practically a bankrupt state with a poor governance, not being able to pay its enormous debt (320 billion €) and to provide enough incomes for its budget.

Suggested Citation

  • Petre Prisecaru, 2015. "Greece: A Classical Example of Failure to Join the Eurozone," Revista de Economie Mondiala / The Journal of Global Economics, Institute for World Economy, Romanian Academy, vol. 7(2).
    • Handle: RePEc:iem:journl:v:7:i:2:y:2015:id:2822000009356007
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    File URL: http://www.iem.ro/rem/index.php/REM/article/view/201
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    More about this item

    Keywords

    debt crisis; adjustment; recession; austerity; reforms; bankruptcy; debt payments; Troika; Grexit;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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