Journal of Political Sciences & Public Affairs
Open Access

Abstract

The Greek Public Debt and a Proposal for its Regulation

Chainas K

Greece was essentially bankrupt in 2010, hit by the financial crisis that swept the Eurozone, because it was one of the weakest links, with serious structural problems, a huge budget deficit and a massive public debt. The bankruptcy was avoided only to evolve into a total disaster for the country, because of the practical solidarity of its partners and the largest funding in the history of the program from the European support mechanism and the IMF. This has had a significant impact on GDP and living standards. However because of the participation of the country in the Eurozone it avoided an open and painful bankruptcy, like other nations experienced. The object of this paper is to propose a methodology to tackle the public debt of Greece, under conditions of uncertainty and in light of the negotiations with its partners and lenders. The proposal does not include the writing off of most or part of the debt, because this is considered non-beneficial for Greece over the longer term. The objective of the arrangement proposal that we put forward is to make the country’s debt manageable over the mid and long term, in agreement with its partners and lenders.