When and why did the Greek economy start to tank?
In: Economics
Well it was during the 2008 recession. At that point most European countries had economic difficulties, but by 2010 most of them had recovered while Greece was still in difficulties. It’s at this time that Greece debt increased, but when other countries stabilised their debt by 2011, Greece kept getting more and more debt, their inflation started to drop and went into deflation in 2013. At this point, they should have been able to recover, but since they were using the Euro, they couldn’t do what they want with it to fix their deflation problems, which lasted until 2017.
That said, I’m don’t know if Greece could have fix the problem faster is they were not in the Euro zone, because they have an horrible track record when it come to inflation control. From mid 70s to mid 90s they had over 10% inflation, going up to 35% at some point. Greece was never a stable economy.
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