Author(s)

Pantelis Sklias¹, Spyros A. Roukanas², Georgios Galatsidas^3*

¹Neapolis University Pafos, Pafos, Cyprus.
²Department of International and European Studies, University of Piraeus, Piraeus, Greece.
³Department of Financial and Management Engineering, University of the Aegean, Chios, Greece.

In this paper, we will approach the origins of the Greek public debt crisis under the prism of the Greek Economy’s fiscal position over time; the evolution of budget deficits; as well as the (distorted) growth model that prevailed in the country during the past few decades. We argue that the public debt crisis was to a great extent the result of accumulated budget deficits and, at the same time, the predominance of a non-sustainable growth model, which has been parasitically thriving off the state. This sort of distorted government intervention in the economy used borrowed resources to create a wasteful state, which sustained high aggregate demand and high private consumption and, by extension, fuelled non-sustainable growth. Our argument is that the growth achieved by the Greek economy was not the outcome of competitive, innovative, and outward-oriented entrepreneurship, albeit was to a great extent the result of high private consumption, as well as investment in non-tradeable goods. As a result, this non-sustainable growth failed to create the conditions for the sustainable management of Greece’s ballooning deficits and debt.

International Political Economy, Public Debt Crisis, Public Deficit and Debt, Growth Model, Greek Economy

Sklias, P. , Roukanas, S. and Galatsidas, G. (2022) Greek Political Economy in a Period of Economic Crisis: The Need for a National Growth Strategy Plan. Theoretical Economics Letters, 12, 371-391. doi: 10.4236/tel.2022.122019.