The Greek Debt Crisis: Like the Enigma of Sphinx. An Estimation of the Probability of Default

25 Pages Posted: 13 Jun 2018

See all articles by Georgios Vousinas

Georgios Vousinas

National Technical University of Athens

Date Written: May 1, 2015

Abstract

The present study deals with the Greek debt crisis and tries to shed light on its determinants, going back to its origins, while examining its negative effects following the burst of the global financial crisis that still plagues the country. This paper also examines the efforts taken to deal with it, a combination of Greek austerity measures and strong financial aid from foreign institutions. Moreover, a probability of default assessment is performed in order to emphasize the fact that, even if the macroeconomic assumptions underpinning the fiscal adjustment program prove realistic and effective, Greek sovereign debt is far from viable and the financial situation of the public sector will remain fragile, having a long and difficult road to follow. Finally, it is pointed out that long term and permanent measures have to be taken in order to address the long-standing weaknesses of the economy and get rid of the vice of default for good, as well as the establishment of a stable political and economic environment.

Keywords: sovereign debt, adjustment program, debt restructuring, default, crisis

JEL Classification: H63

Suggested Citation

Vousinas, Georgios, The Greek Debt Crisis: Like the Enigma of Sphinx. An Estimation of the Probability of Default (May 1, 2015). Available at SSRN: https://ssrn.com/abstract=3186430 or http://dx.doi.org/10.2139/ssrn.3186430

Georgios Vousinas (Contact Author)

National Technical University of Athens ( email )

Heroon Polytechniou 9
Zografou
Athens, 15780
Greece

HOME PAGE: http://www.mech.ntua.gr

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