The Challenges of the Greek Crisis

The Greek crisis has abated, but not ended. Representatives of the “troika” of the European Commission, the European Central Bank and the International Monetary Fund returned to Athens for talks with the Greek government about a new bailout. This pause allows an accounting of the many challenges that the events in Greece pose to the international […]

Greece’s Never Ending Troubles

The final outcome of the Greek debt crisis has been obvious from the beginning. The Hellenic nation will need to restructure its debt, writing off a substantial portion of what it owes. It may need to leave the Euro, allowing the country to devalue to regain competitiveness relative to its peers like Turkey. Spreadsheet Referendum […]

After the Greek Referendum: Into Uncharted Waters

The triumph of the “no” vote in the Greek referendum was not a mandate for Grexit, but a new starting-point to talks. But is there room for a compromise any longer? On Sunday, some 62% of Greeks voted against and only 39% for the creditors’ June 25 proposal. It was the official end to austerity […]

Africanization of Greece

In the early 1990s – during the infamous shock without therapy, which resulted in Poland’s national income fall by nearly 20 percent, over 3-million unemployment and budget deficit  6.9 percent of GDP in 1992 – there was a talk about “Latinization” of my country, pointing to the increasing similarities with the then dysfunctional economies of […]

Why a Selective Default Does Not Mean Grexit

Confusion reigned supreme in the euro area over the weekend. The decision of the Greek government to call for a referendum over the terms of the programme, needed to unlock money for the IMF debt repayment due on Tuesday, plunged the euro finance ministers into despair, while they fought a deal was very close. It […]

Greek Tale(s)

No matter what new twist the Greek debt crisis takes, there can be no question that it has been a catastrophe for that country and for the entire Eurozone. The Greek economy contracted by over a quarter during the period of 2007 to 2013, the largest decline of any advanced economy since 1950. The Greek unemployment rate […]

Two Alternative Plans to Avoid a Grexit

Larry Summers has recently proposed in the Financial Times a plan that could form the basis of an agreement between the Greek government, the European authorities and the International Monetary Fund (IMF). This plan is articulated around three axes: Serious policy adjustment and structural reforms including a pension reforms, an increase in VAT and a […]

Two Alternative Plans to Avoid a Grexit

Larry Summers has recently proposed in the Financial Times a plan that could form the basis of an agreement between the Greek government, the European authorities and the International Monetary Fund (IMF). This plan is articulated around three axes: Serious policy adjustment and structural reforms including a pension reforms, an increase in VAT and a […]

What went wrong in Greece and how to fix it: Lessons for Europe from the Greek crisis

Greece’s problem came from the bursting of a debt-financed growth bubble inflated with the help of EZ membership. This column argues that the inevitable adjustment was more painful than necessary. The fiscal consolidation was too tight and too front-loaded, and, importantly, structural reform wasn’t properly sequenced. By concentrating on labour market rather than product market […]

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