The Greek Fiscal Crisis and the Role of Fiscal Governance

Georgia Kaplanoglou and Vassilis Rapanos ()

GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe from Hellenic Observatory, LSE

Abstract: In view of the growing attention paid to the role of fiscal governance in budgetary outcomes, this paper tries to shed light on the link between the recent Greek fiscal crisis and aspects of fiscal governance. It reviews fiscal developments in Greece over the last decade and challenges the widely held view that optimistic macroeconomic forecasts adopted by the Greek government, as well as three international organisations, were responsible for unrealistic fiscal deficit forecasts. Instead, the weak domestic institutional budget framework and the ineffectiveness of international organizations to act as signaling mechanisms emerge as the main reasons for weak fiscal performance. In this light, the paper puts forward some ideas for improving the domestic institutional framework for conducting fiscal policy in Greece.

Keywords: fiscal governance; fiscal forecasts; fiscal discipline; budget institutions; public financial management; Greece. (search for similar items in EconPapers)
JEL-codes: E62 H11 H61 H62 H68 (search for similar items in EconPapers)
Date: 2011-06
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Citations: View citations in EconPapers (28)

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Working Paper: The Greek fiscal crisis and the role of fiscal governance (2011)
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