Economic Crises in Greece, 1833-2018: External and Domestic Aspects

Using long term statistical series for Greece, the study locates and discusses all major crises that took place in Greece since Independence until recent times. By comparing its business cycles and growth dynamics in other countries, Greece is found to be practically disconnected from the world economic order for most of the epoch until WWII, in the course of which the economy remained stagnant, underdeveloped and often had to go bankrupt. The country managed to get more robustly integrated in the postwar economic system, first with the Bretton Woods agreement and this century with the Euro area, securing sustained growth and convergence to peer economies, at least until the outbreak of global credit crunch. Apart from the credit isolation imposed upon Greece for most of the first epoch, some major policy weaknesses are identified - such as the high ratio of defense and interest payments to revenues, the overwhelming burden of consumption taxes and a clientilistic system in the allocation of resources - that may help to explain the frequency and transmission of a crisis. Some of the stylized facts survive to the present.