Greek Sovereign Debt: Addressing Economic Distress and Growth in the Euro Area

Abstract

This article addresses key issues of the Greek sovereign debt crisis, its broader economic distress and growth implications for the Euro Area and offers suggested remedies including growth indexed bonds, fiscal balances over a growth cycle, structural reforms, and using real option analysis in relevant public policy areas involving inefficient or growth sectors of the economy.

Keywords: Greek sovereign debt, Grexit, debt sustainability, real options, growth-indexed bonds, fiscal balance, structural reforms

JEL Classification: H63, H60, G01, G13