IDEAS home Printed from https://ideas.repec.org/a/wei/journl/v13y2023i1p16-30.html
   My bibliography  Save this article

Notes on the Accumulation of Greek Public Debt between 1981 and 2000

Author

Listed:
  • Mikhail Raev

    (University of Sofia “Sv. Kliment Ohridski”, Sofia, Bulgaria)

Abstract

This paper examines the issue of accumulation dynamics of the Greek Public Debt between 1981 and Greece’s entry into the Eurozone on 1 January 2001. The author argues that the recent research on the Greek Sovereign Debt Crisis (May 2010) did not take this matter into consideration. The paper uncovers the causes of the Public debt accumulation in the 1980s but also points out that its service costs were minimal since the Greek government sold domestically its non-indexed drachma obligations. The costs of refinancing rose since the end of the 1980s when Greece started to sell internationally debt denominated in other currencies. This move was in effect a result of the process of financial liberalisation of Greek markets and the abolishment of capital controls. The rising costs of debt servicing and public expenditures along with insufficient tax revenues troubled the government of the Nea Demokratia (1990-1993). As the case was, the bright prospects of Greece joining the Economic and Monetary Union reflected upon the diminishing interest rates of new debt issued in the second half of the 1990s. This allowed the Greek government to keep the debt-to-GDP ratio, so far reached, at a lesser expense. However, the financial liberalisation, which allowed foreign and local buyers to purchase government securities denominated in foreign currency, exposed Greece to the first speculative attack on its exchange rate in 1994 since the foreign speculators were attracted by the high debt-to-GDP ratio. Although the Greek government and the Bank of Greece repelled the attack, a more prudent policy decision would have been to decrease the debt-to-GDP ratio in the years to follow, but myopic policy constraints did not allow its execution although it has been strongly argued in the literature.

Suggested Citation

  • Mikhail Raev, 2023. "Notes on the Accumulation of Greek Public Debt between 1981 and 2000," Economic Research Guardian, Weissberg Publishing, vol. 13(1), pages 16-30, June.
  • Handle: RePEc:wei:journl:v:13:y:2023:i:1:p:16-30
    as

    Download full text from publisher

    File URL: https://www.ecrg.ro/files/p2023.13(1)18y2.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Greek Public Debt Accumulation; European Sovereign Debt Crisis;

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wei:journl:v:13:y:2023:i:1:p:16-30. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mihai Mutascu (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.