The Financial Fragility and the Crisis of the Greek Government Sector

Posted: 28 Mar 2014 Last revised: 3 Nov 2017

Date Written: 2014


The purpose of this paper is to develop Minskyan financial fragility indices for the government sector and to examine the financial structure of the Greek government before and after the onset of the sovereign debt crisis in 2009. We provide empirical evidence that clearly shows the growing financial fragility of the Greek public sector in the 2000s. We also assess the effectiveness of the implemented bailout adjustment programmes in Greece and claim that the conducted austerity measures and fiscal consolidation have not significantly improved the financial posture of the Greek government sector. We argue that the implementation of fiscal and wage austerity in an economy that lacks structural competitiveness produces prolonged recession and unemployment with adverse feedback effects on the financial fragility of the government.

Keywords: Minsky’s financial fragility, government sector, Greek debt crisis

JEL Classification: E12, E60, H60

Suggested Citation

Nikolaidi, Maria and Argitis, George, The Financial Fragility and the Crisis of the Greek Government Sector (2014). International Review of Applied Economics, Vol. 28, No. 3, 2014, Available at SSRN:

Maria Nikolaidi

University of Greenwich ( email )

30 Park Row
London, SE10 9LS
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics