Plus ça change, plus c’est la même chose

Events during the summer of 2015 bore an air of déjà vu. The initial gap between Greece and its partners was significant. The frequency of meetings increased as time (and cash) ran out, with little to show in terms of progress. The discussions were held at an increasingly higher political level, but the core of the discussions remained of a “technical nature”. At its climax, the Greek Prime Minister held a referendum whose two questions were incomprehensible for citizens. Then, the Greek government operated a complete U-turn, signing third Memorandum of Understanding (MoU) containing harsh(er) conditions. 

Αμαρτίες γονέων τέκνα παιδεύουσι: passing on debt overhang

For a pdf version of the paper, containing the relevant figures, please click here.

What follows is an outline of the Greek sovereign debt crisis from a perspective that is certainly not mainstream - at least not in the sense of what every major political, economic, and media outlet loves to hate nowadays. For my interpretation as to how the crisis came about will be neither structural nor cultural. Of course, national economies do grow or decline because of social and economic substructures, political institutions, and cultural traits. Yet, these refer to long-term processes whereas serious sovereign debt crises usually evolve over relatively short (often too short) periods of time. Sovereign bankruptcies, much like those of large private companies, occur because three unfortunately too human factors are allowed to carry the day in the highest echelons of strategic decision-making. These are irresponsible greed, incompetence, and irrationality (a term which many a time is meant more as an euphemism for stupidity).