 Ireland and Greece: A Tale of Two Fiscal AdjustmentsJeffrey D. Anderson and Jessica Stallings Chapter 3 in Managing Risks in the European Periphery Debt Crisis, 2015, pp 55-77 from Palgrave Macmillan Abstract: Abstract Three years into Europe’s crisis, and with worrisome output contractions ongoing in Italy, Spain and Portugal, the different experiences of Ireland and Greece offer useful lessons. A more tempered fiscal consolidation has helped Ireland succeed in restarting the growth needed to underpin debt sustainability and renew bond issuance. Few doubt, as a result, that Ireland’s official creditors will be repaid in full and on time. With a much larger initial debt and little saved from the strong growth registered before 2008, the far harsher fiscal adjustment required of Greece has had a much more negative effect on GDP. This has elevated debt ratios and reinforced doubts about creditworthiness despite fiscal adjustment and principal reductions from private creditors of unprecedented magnitudes. Applying the Irish example in Greece to help restart growth would require some additional funding. The final cost, however, would be much less than might eventually be needed if output continues to fall and doubts about debt sustainability remain entrenched. Keywords: Euro Area; Debt Ratio; Fiscal Consolidation; Excise Duty; Greek Economy (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-30495-7_3 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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