Greece in the Eurozone: Lessons from a decade of experience

Elisabeth Oltheten, Theodore Sougiannis, Nickolaos Travlos, Stefanos Zarkos

Research output: Contribution to journalArticle

Abstract

This study examines Greece's experience as a member of the Eurozone over the period 2002 to 2011. In evaluating the Greek experience within the Eurozone, we derive the following fundamental policy lessons that apply both to similar small peripheral EU countries that plan to enter the Eurozone, or any other economic union, and to the Eurozone itself in terms of facilitating their integration in a large monetary union. First, countries with inefficient public systems must re-engineer and restructure the decision making process in the public sector before they become members of an economic union. Second, countries must generate a friendly environment toward business and provide (a) a simple, stable tax system, (b) an effective and efficient justice system, and (c) a high quality educational system. Third, the living standards of the people are determined by the productivity and competitiveness of the economy and not by an inefficient and overspending public sector. Fourth, structural funds should be used to improve the competitiveness of the economy, not serve the political clientele of the party in power. Fifth, the admission requirements to an economic union must be strict and these requirements must be enforced. Sixth, capital market investors must always differentiate default risk within the country-members of a monetary union.

Original languageEnglish (US)
Pages (from-to)317-335
Number of pages19
JournalQuarterly Review of Economics and Finance
Volume53
Issue number4
DOIs
StatePublished - Nov 1 2013

Keywords

  • Benefits of Monetary Union
  • Bureaucracy
  • Corruption
  • Crisis in the Eurozone
  • Greece in the Eurozone
  • Greek Debt Crisis

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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