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The Greek Crisis: Origins and Implications

Galenianos, M. (2014) “The Greek Crisis: Origins and Implications“, Greek Economists for Reform.com, 07 April.

 

This paper argues that the deep causes of the Greek and Eurozone crisis are the large external imbalances (trade deficits) of the countries of the European periphery. Their fiscal imbalances exacerbated but did not cause the crisis and therefore fiscal adjustment is a necessary but not sufficient condition for economic recovery. For their economies to grow the countries in crisis, and especially Greece, need to regain competitiveness which will lead to rebalancing of the external account.

 

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