Greek Sovereign Debt Crisis

Capital controls in Greece (© Copyright: Bill Anastasiou)

Greek Sovereign Debt Crisis

The economic upturn that began in the 2000s was due to government contracts and was also linked to the Olympic Games. Also, the Greek government's budget was inadequate and took on more and more debt. At the end of 2010, the debt level was over 170% of gross domestic product. Greece was no longer able to take on new debt on its own and was virtually bankrupt. Thus, the Euro financial crisis was born.

From that point on, Greece was from then reliant on foreign lenders - especially the European Union and the International Monetary Fund. In return, they demanded tough budget cuts and a troika made up of representatives of the international donors to keep a tight rein on them. In 2015, additional capital controls had to be introduced to stem the flow of money abroad. Greece slid into a deep economic recession during the crisis years. High unemployment figures followed, and the younger population was particularly affected.

Greece gradually fulfilled the requirements of the deal and the debt deficit was reduced through privatizations, tax increases, and the rehabilitation of the inefficient civil service. In 2018, the crisis was finally officially declared over.

The aftermath of the crisis years is still felt today, yet the Greek economy continues to recover and there is a general sense of optimism. Many domestic companies are repositioning themselves and foreign investors have discovered Greece for themselves. Investments in infrastructure, real estate, and services are in high demand.