An Evaluation of Policies for Fiscal and External Sustainability during the Recent Greek Economic Crisis

Panagiotis Chronis, George A. Zombanakis
European Research Studies Journal, Volume XIX, Issue 1, 32-43, 2016
DOI: 10.35808/ersj/504


The scope of this note is to point out that high growth rates must be accompanied by current account surpluses financing the internal debt service as a necessary and sufficient condition for a debt-reduction strategy. The recipe is applied in the case of Greece which, looking back at the pre-crisis period, has been experiencing substantial consumption-led growth following extensive foreign borrowing.

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