The Greek economic crisis: causes and alternative policies

Abstract

The Greek economic crisis is primarily structural and the result of an international economic impasse that developed in 2007, with devastating implications for the struggling peripheral economies of Europe. This article suggests that falling profitability led to the stagnation of profits, which in turn discouraged new investment, decreased production and increased unemployment. The resulting recessionary economic environment, in conjunction with the mounting public debt and the austerity policies imposed on the Greek economy by the so-called ‘troika’ of creditors in 2010, has decimated the Greek economy even further, causing one of the worst economic crises since the Second World War. The article also provides some broad guidelines for an alternative economic policy.