Citation

Discussion Paper Details

Please find the details for DP10898 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Pitfalls of External Dependence: Greece, 1829-2015

Author(s): Carmen M. Reinhart and Christoph Trebesch

Publication Date: October 2015

Keyword(s): Bailouts, Crisis Resolution, External Debt and Sovereign Default

Programme Area(s): Economic History and International Macroeconomics and Finance

Abstract: 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.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10898

Bibliographic Reference

Reinhart, C and Trebesch, C. 2015. 'The Pitfalls of External Dependence: Greece, 1829-2015'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10898