The Pitfalls of External Dependence: Greece, 1829-2015 / Carmen M. Reinhart, Christoph Trebesch.

Format:

Book

Author/Creator:

Reinhart, Carmen M.

Contributor:

National Bureau of Economic Research.

Trebesch, Christoph.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21664.

NBER working paper series no. w21664

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Pitfalls of External Dependence

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

Two centuries of Greek debt crises highlight the pitfalls of relying on external financing. Since its independence in 1829, the Greek government has defaulted four times on its external creditors - with striking historical parallels. Each crisis is preceded by a period of heavy borrowing from foreign private creditors. As repayment difficulties arise, foreign governments step in, help to repay the private creditors, and demand budget cuts and adjustment programs as a condition for the official bailout loans. Political interference from abroad mounts and a prolonged episode of debt overhang and financial autarky follows. We conclude that these cycles of external debt and dependence are a perennial theme of Greek history, as well as in other countries that have been "addicted" to foreign savings.

Notes:

Print version record

October 2015.