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The Pitfalls of External Dependence: Greece, 1829-2015

Carmen Reinhart () and Christoph Trebesch ()

Working Paper Series from Harvard University, John F. Kennedy School of Government

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.

New Economics Papers: this item is included in nep-his
Date: 2015-10
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Related works:
Journal Article: The Pitfalls of External Dependence: Greece, 1829–2015 (2015) Downloads
Working Paper: The Pitfalls of External Dependence: Greece, 1829-2015 (2015) Downloads
Working Paper: The Pitfalls of External Dependence: Greece, 1829-2015 (2015) Downloads
Working Paper: The Pitfalls of External Dependence: Greece, 1829-2015 (2015) Downloads
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