“When the Bough Breaks” Making Sense of the Greek Economic ‘Waterloo’
The purpose of the paper is to firstly provide a conceptual perspective on the existing European economic environment and secondly, to delineate the disastrous economic policies responsible for derailing the entire Greek economic establishment.The study expounds upon the very framework that EU policy has been conducted by scrutinizing the way some main economic indicators have fluctuated over the years. The main focus of the economic policies adopted by the EU countries should be on the strengthening of the monetary union and the euro in terms of strengthening the productive, technological, qualitative and redistributive efficiency and not in terms of weakening unions, dislocating labor market institutions, degrading and transforming the social state to “state charity”. The distorted model of development that has been religiously adhered to for many years, has caused production as well as primary surpluses to shrink dramatically, which in conjunction with inappropriate policy alternatives contributed to a prolonged recession that we are currently witnessing. The fiscal restructuring that is currently underway in Greece is bound to burden further the already crippled economic activity in so far as the new tax reforms constrain dramatically the purchasing power of its citizens. The latter in conjunction with the deregulation of the labour markets will reduce real wages markedly, causing in affect further decline in private consumption. The resulting decrease in aggregate demand will set off a self-feeding mechanism of declining production and increasing unemployment.
Volume (Year): 1 (2011)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: http://www.econjournals.com|
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.:
- Servaas Deroose & Sven Langedijk & Werner Roeger, 2004. "Reviewing adjustment dynamics in EMU: from overheating to overcooling," European Economy - Economic Papers 2008 - 2015 198, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Allsopp, Christopher & Vines, David, 1998. "The Assessment: Macroeconomic Policy after EMU," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 1-23, Autumn.
- Lars Jonung & Fredrik Sjöholm, 1999.
"Should Finland and Sweden Form a Monetary Union?,"
The World Economy,
Wiley Blackwell, vol. 22(5), pages 683-700, 07.
- Jonung, Lars & Sjöholm, Fredrik, 1998. "Should Finland and Sweden Form a Monetary Union?," SSE/EFI Working Paper Series in Economics and Finance 224, Stockholm School of Economics.
- Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
- Michael G. Arghyrou & Georgios Chortareas, 2008.
"Current Account Imbalances and Real Exchange Rates in the Euro Area,"
Review of International Economics,
Wiley Blackwell, vol. 16(4), pages 747-764, 09.
- Arghyrou, Michael G & Chortareas, Georgios, 2006. "Current Account Imbalances and Real Exchange Rates in the Euro Area," Cardiff Economics Working Papers E2006/23, Cardiff University, Cardiff Business School, Economics Section.
- Christiane Krieger-Boden & Dirk Dohse & RÃ¼diger Soltwedel, 1999. "EMU Challenges European Labor Markets," IMF Working Papers 99/131, .
- Coenen, Günter, 2003. "Downward nominal wage rigidity and the long-run Philips Curve: simulation-based evidence for the euro area," Working Paper Series 0270, European Central Bank.
- Jose Vinals & Juan F. Jimeno, "undated".
"Monetary union and european unemployment,"
- Alan Ahearne & Jean Pisani-Ferry, 2006. "The Euro: only for the agile," Policy Briefs 42, Bruegel.
- Jan Marc Berk & Job Swank, 2002. "Regional Price Adjustment in a Monetary Union the Case of EMU," MEB Series (discontinued) 2002-7, Netherlands Central Bank, Monetary and Economic Policy Department.
- Joël Oudinet & Jacques Mazier & Sophie Saglio, 2002. "La flexibilité des prix relatifs et la mobilité du travail en Union monétaire," Post-Print halshs-00487521, HAL.
When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2011-03-4. 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: (Ilhan Ozturk)
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.