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Greek economic crisis: An understandable approach

Savvas-Gkantakas Athanasios

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Summary

The economic crisis that Greece went through over the last decade, has affected all Greeks, continues to affect their daily lives to these days and, without a doubt, is a particularly emotional issue. In the present paperwork, a comprehensible analysis of the real economic data, which led to the crisis and the way in which the attempt was made to deal with it, will be attempted. The following analysis will refer to economic data and facts, without political or ideological references. Clearly, economics and politics are inextricably linked, however, no attempt will be made for a political position. Any report of this kind will serve the purposes of economic analysis. The same will take place in relation to the personal views of the author, which will be absent as possible. The reader, therefore, can extract his own conclusions, from this analysis.At first, the causes that led to the debt crisis for Greece are presented. An analysis of the fiscal data is made, followed by an over time analysis, with the conclusions that emerge.Subsequently, the introduction of Greece in the program of the 1st memorandum with be considered. It is explained how the global financial crisis affected the sustainability of the Greek debt and led to the impending bankruptcy. Following, the period during which Greece formally requested the assistance of the IMF and its European partners will be examined, as well as the programs that took place as the 1st memorandum. Its results, its real goals are explained and the necessary conclusions are drawn.Next, Greece's accession to the 2nd memorandum is examined. To understand this program, some essential knowledge such as the Deauville doctrine and the Maastricht treaty are presented. After that, the Greek debt haircut in described, known as PSI, for debt to individual investors, Greek banks and insurance funds. The report of this program is presented, as well as the sub-program that took place later. The results of the program for Greece are analysed and the conclusions follow.Later, some key knowledge in presented, as a link between the previous and the next chapter, which includes the negotiation in 2015. To achieve this goal, the course in which Greece had entered and its treatment by Europe are analysed, together with its results. Next, the appropriate solution is explained, based on international experience. In addition, the responsibilities of Greece that led to the impending bankruptcy are recognised. At this point, it is considered necessary to refer to the speculation of the European formals towards Greece, as well as the climate of rupture that had been created.In the last part, references are made to the period before the negotiation in 2015. Furthermore, the negotiation itself and its bases for the Greek side are explained. Later, a brief reference is made to the referendum, capital controls and, finally, the capitulation. As result, the 3rd memorandum introduced. The obligations and the benefits from it, are referred. Finally, an approximation of the cost of this negotiation is attempted.This paper concludes by presenting the general conclusions for Greece in terms of numbers and societary impact.

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