23/02/2024:
The Greek debt crisis and its misconceptions
Cypruseconomicsociety.org, 23/02/2024
The public debate on the recent Greek debt crisis is characterized by inaccuracies and misconceptions that draw the wrong conclusions.
Nikos Garganas’ book[1] points out many of these inaccuracies and misconceptions. The author recounts the causes of the crisis and highlights the wasting of the fiscal space that resulted from the drastic reduction of interest rates, due to the elimination of exchange rate risk after Greece’s entry into the Eurozone. The huge savings achieved from the reduction in debt servicing costs were spent on benefits.