Open AccessSaving Greece once again: Have we Reached the Root of the Crisis?
Author(s) -
Klaus Schrader,
David Benček,
Claus-Friedrich Laaser
Publication year - 2015
Publication title -
vierteljahrshefte zur wirtschaftsforschung
Language(s) - English
Resource type - Journals
eISSN - 1861-1559
pISSN - 0340-1707
DOI - 10.3790/vjh.84.3.29
Subject(s) - blueprint , debt crisis , debt , economics , financial crisis , debt overhang , economic recovery , structural adjustment , economic policy , international economics , business , external debt , macroeconomics , market economy , engineering , mechanical engineering
In 2010, the first economic adjustment program began offering a blueprint for economic recovery and a feasible way for Greece to emerge from the crisis. The authors show that Greece neither overcame its structural weaknesses nor developed export industries as a driver of growth in the course of reforms, and they conclude that Greece's sectoral structures still mirror a low level of industrial development as well as a service industry with a below-average growth performance compared to other EU countries. Greece's composition of exports exhibits a limited growth and value-added potential, and is similar to the export patterns of low-income countries due to a focus on raw materials and labor-intensive goods. The analysis also shows that without significant growth, the Greek debt will remain unsustainable. A haircut or a phasing out of the debt burden can only complement supply-oriented structural reforms, however. The reform agenda of August 2015 is a new attempt to implement the reforms that the creditors have been waiting on for the past five years