Greek Sovereign Defaults in Retrospect and Prospect

This article presents and critically evaluates the four Greek sovereign defaults (1827, 1843, 1893 and 1932) and puts them into a historical perspective. The argument is that each and every of the defaults was not an isolated episode in the turbulent economic history of capitalism, but rather a manifestation of the internal weaknesses of the Greek economy which were magnified during the downturn phases of the long waves of 1815-1845, 1873-1896, and 1921–1940. Crucial for the precipitation of these defaults were the short-sighted and often opportunistic policies followed by the Greek governments which were eager to increase public spending based on borrowed money which lead to mounting public debt. As a consequence, the past Greek sovereign defaults are worth studying in an effort to derive useful lessons and policy conclusions for the current and also future situations.