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Title

Crisis, austerity, and fiscal expenditure in Greece: recent experience and future prospects in the post-COVID-19 era

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Year 2021
Collection Working Papers of the Department of History, Economics and Society – Political economy; 01/2021
Description 25 p.
Abstract This paper provides a discussion of the relationships between austerity, the macroeconomic performance of the Greek economy, debt sustainability, and the provision of healthcare and other social services over the last decade. It explains that austerity was imposed in the name of debt sustainability. However, there was a vicious cycle of recession and austerity: each round of austerity measures led to a deeper recession, which increased the debt-to-GDP ratio and therefore undermined the goal of debt sustainability and led to another round of austerity. One of the effects of the austerity policies was the significant reduction of healthcare expenditure, which made Greece more vulnerable to the recent pandemic. Finally, it shows how recent pre-COVID debt sustainability analyses projected that Greek public debt would become unsustainable even under minor deviations from an optimistic baseline. The pandemic shock will thus lead to an explosion of public debt. This brings again to the fore the need for a restructuring of the Greek public debt, and other policies that will address the eurozone's structural imbalances.
Keywords GreecePublic debtAusterityHealthcareDebt sustainability
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NIKIFOROS, Michalis. Crisis, austerity, and fiscal expenditure in Greece: recent experience and future prospects in the post-COVID-19 era. 2021 https://archive-ouverte.unige.ch/unige:147178

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Deposited on : 2021-01-13

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