Authors: Dimitris Giakoulas

Title: An assessment of Greece’s debt crisis impact in its macroeconomic environment: Implications for investments and future growth prospects.

Abstract

In this presentation we attempt an assessment of the impact of the 10-year debt crisis in the Greek economy.

Initially we investigate the impact of the crisis on the macroeconomic environment and the competitiveness of the Greek economy. We do so by analyzing the change in the components of the Gross Domestic Product and in specific competitiveness indicators of international organizations. In this context we attempt to identify the implications of the structural reform programmes and distinguish them any long-run structural problems of the Greek economy.

From our analysis, it occurs that the component that has been severely negatively affected during the crisis are investments in the Greek economy. The future implications of this development are rather negative since the collapse of investments for an extended period might erode Greece’s future growth prospects.

We subsequently focus our research on the patterns of domestic and foreign investments in Greece before and during the crisis, compared to other EU countries. We analyze the sources of investments in geographical and sectoral terms, as well as investments’ components so as to identify the extend to which investments drove growth in the Greek economy.