“Tossed by the Waves But Never Sinking:” Greece, from the 1826 Default to the Modern Debt Crisis and Its Aftermaths

Abstract

With the largest public debt and one of the largest budget deficits in the Eurozone, Greece has been at the center of the recent Eurozone Financial Crisis. This chapter is focused on the last economic crisis, to analyze its main causes, as well as the prospects for the future of Greek economy. In this context, the historical perspective of the long series of seven sovereign defaults over the last two centuries is presented. The main regional and sectoral impacts of the crisis are also reviewed, particularly the effects on the unemployment incidence, as well as the limits and prospects of the country after the debt crisis and the concomitant seventh default of its modern history. The unequal impact of the crisis is mainly due to the homogeneity of the measures applied in the regions, without considering the disparities that characterize them. Today, in a period of successive crises, emergencies, and great international instability, Greece is called upon to fight the crucial problem of competitiveness and make a leap, based on its comparative advantages and the opportunities arising from the crises.