Greece’s sovereign debt crisis and its economic aftermath

Many books have already appeared on Greece’s sovereign debt crisis of 2009-2010 and its aftermath. Still, this book is not just another narrative of the deep and prolonged crisis that plagued Greece and the wider euro area. Written more than thirteen years after the onset of the crisis, it allowed the author the time to investigate every aspect of the crisis and to provide a truly comprehensive, articulate description and analysis of how and why the worst economic crisis in postwar Greek history was precipitated. How did we escape a default? What did the government and such international institutions as the European Commission, the European Central Bank and the International Monetary Fund do to address the challenges that the country had faced? What progress has the Greek economy achieved since 2009-2010? What have we learned from the bitter experience of the sovereign debt crisis? And what must we do from here on to prevent a recurrence of past crises, enabling Greece to thrive? With great clarity, the author identifies the origins of the crisis in the complicated relation between domestic fiscal imbalances and structural weaknesses, which brought the country to the brink of default, together with the sudden disruption of capital inflows in the context of the global financial and economic crisis. Things started unravelling when investors had become unwilling to advance funds to roll over public debt coming to maturity, due to the size and structure of existing borrowing. Garganas provides an insightful analysis of why the policies implemented prior to the crisis were complacent and wrong. In so doing, he reveals the government’s failure to recognize the risks of a crisis. The book explains the views on visible shortcomings in the architecture of Economic and Monetary Union and initiatives for reform after the crisis. This is followed by an assessment of the effectiveness of the economic adjustment programmes in restoring the sustainability of public finances; in safeguarding the financial system; and in promoting structural reforms to enhance competitiveness, investment, and growth. More than thirteen years later, the question remains whether Greece is safer now. The answer depends on whether the right policies will be in place or not. This book is a competent, authoritative analysis, the best available, on what really happened in the 2010-2018 economic crisis, why, how, and what it now means for the future. It is a seminal work that anyone who aspires to understand in depth Greece’s sovereign debt crisis surely should read.