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Published in:
Causes and Consequences of Crisis in the Eurozone Periphery Read chapter Read first chapter

2018 | OriginalPaper | Chapter

5. Greece and European Monetary Union: The Road to the Demise of the Greek Economy

Author : Pavlos Gkasis

Published in: Crisis in the Eurozone Periphery

Publisher: Springer International Publishing

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Abstract

Even prior to the crisis, the Greek economy had been plagued by structural inefficiencies, which were responsible for the gradual decline of its economic performance. At the same time, the structural inefficiencies of both modern capitalism in general and the architecture of European Monetary Union in particular have worsened conditions for the country after the global financial meltdown of the 2007–2008 period. This chapter identifies major factors behind the build-up to the crisis that Greece has been facing, pointing to domestic inefficiencies and externally imposed rigidities. Their combination has led to an inability to escape the current death spiral.

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previous chapter Portugal’s Economic Crisis: Overheating Without Accelerating
next chapter Narrating Crisis in Ireland’s Great Recession
Footnotes
1
Conditionality is one of the policy tools employed by the EU in the pre-accession process of candidate countries. It is based on a carrot and stick approach to stimulate policy reform by candidates to achieve convergence with EU practices.
 
2
According to Kasimati and Veraros (2013), the dual-currency regime would be applied with the introduction of a new currency for the domestic economy (e.g., drachma) while the public debt would be denominated in Euro. The government would then be aiming to collect adequate amounts of Euro through exports and other activities to proceed with interest payments on its outstanding debt, while it would cover all other expenses in drachma. This would not be sustainable in the long-run though, since it would mean a devaluation of the currency and imported inflation through the more expensive imports due to the weak currency.
 
3
It remains to be seen whether the example of Greece will act as pressure on the EU and the IMF to improve their social model and Economic Adjustment Programmes in order to ensure economic, social, and political stability in the Eurozone.
 
4
The goal in the past had reached 4.5 per cent. At the time of writing the precise goal for the 2018–2022 period has yet to be set.
 
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Metadata
Title
Greece and European Monetary Union: The Road to the Demise of the Greek Economy
Author
Pavlos Gkasis
Copyright Year
2018
Book
Crisis in the Eurozone Periphery

Print ISBN: 978-3-319-69720-8

Electronic ISBN: 978-3-319-69721-5

Copyright Year: 2018

DOI
https://doi.org/10.1007/978-3-319-69721-5_5

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