WHO IS RESPONSIBLE FOR THE GREEK PUBLIC DEBT ?

by on 6 March 2017

The public debt of Greece is undoubtedly a snowball that grows over time and has its roots in the 1980s. From €1.6 billion (or 22% of GDP) at the end of 1980, it reached €320 billion (or 180% of GDP) in 2017…

There is multiple finger pointing at the 2004-2009 period, which recorded a significant jump in the public debt. The reasoning behind this finger pointing is based on the simplistic notion that, at the end of 2003 the debt was 181.5 billion, while at the end of 2009 it had reached 301.1 billion1 . Therefore, the difference between these time points, which is 119.6 billion, is allegedly due to mismanagement of the public finances, during the New Democracy (ND) era.

The first thing that many ignore or neglect intentionally is the dates. The K. Karamanlis government took office from the second quarter of 2004 and left office at the end of the third quarter of 2009. This half year is too important to be excluded from the calculations. Adjusting for that, we see that at the end of March 2004 the public debt was €187.6 billion, while at the end of September 2009, it was €297.3 billion. Therefore, over the 5.5 years of the ND government the increase in debt was in fact €109.6 billion.

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