Discussing EU Policies and Mechanisms towards the COVID-19 Pandemic Crisis: A Case Study of Greece

Nikolaos Apostolopoulos (), Marios Psychalis and Panagiotis Liargovas
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Nikolaos Apostolopoulos: Department of Management Science and Technology, University of Peloponnese, 22100 Tripoli, Greece
Marios Psychalis: Department of Economics and Business, Neapolis University Pafos, Pafos 8010, Cyprus

World, 2022, vol. 3, issue 4, 1-11

Abstract: This paper discusses the effectiveness of EU economic measures towards the pandemic crisis in the case of Greece. As the pandemic crisis was an exogenous and symmetric crisis, EU member states decided to take supply and demand side measures to tackle economic recession. Not only the Recovery plan for Europe (NGEU), but also the Escape Clause, as well as non-standard monetary measures, were implemented in order to achieve growth. Furthermore, fiscal expansion, as well as common debt extraction, using green and social bonds led to higher government spending and sovereign debt. The paper’s research question is “Could fiscal expansion mitigate the economic consequences of pandemic crisis?” In other worlds, the research gap which this paper tries to fill is that for the contemporary EU response to two different crises, the economic and the pandemic. Our analysis, by using a comparative approach, shows that government spending and fiscal expansion is effective in the short-run, as the temporary measures led to higher GDP growth rates and lower unemployment rates, but in the long-run demand side measures led to higher inflation and higher sovereign debt.

Keywords: pandemic response; public spending; EMU fiscal policy; government spending; Greece (search for similar items in EconPapers)
JEL-codes: G15 G17 G18 L21 L22 L25 L26 Q42 Q43 Q47 Q48 R51 R52 R58 (search for similar items in EconPapers)
Date: 2022
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