Two Greek economic analysts explain the Greek financial crisis - from beginning to end. The first section of Greece: From Exit to Recovery? explores the lead up to Greece's adoption of the euro. Authors Theodore Pelagidis and Michael Mitsopoulos believe that the ensuing challenges were foreseeable. In fact, the authors posit that it was Greece's difficultly in dealing with those challenges that sparked the euro crisis. Section II analyzes discrete sectors of the economy, paying special attention to labor and finance - and the mistakes creditors made in focusing on reducing Greek incomes - rather than increasing competitiveness on non-labor costs. Section III investigates why Greek companies spend relatively little on research and development. The authors' analysis indicates that policy decisions largely determine R& D performance in the private sector, and they advance a number of specific policy proposals to improve the situation.
Theodore Pelagidis is a professor of economics at the University of Piraeus, Greece, and a nonresident senior fellow in Global Economy and Development at Brookings. He has also been a NATO scholar at the Center for European Studies at Harvard University, a Fulbright scholar at Columbia University, and an NBG professorial fellow at the London School of Economics. Michael Mitsopoulos is an economist at the Hellenic Federation of Enterprises, Greece, and has taught at the Economic University of Athens and the University of Piraeus. Pelagidis and Mitsopoulos are coauthors of Understanding the Crisis in Greece: From Boom to Bust (Palgrave Macmillian, 2011).
Crucial to the future of the euro -indeed, to the future of the European Union -is the ability to lever domestic reform in 'bail-out' states like Greece. This ability depends on both how the external strategy is crafted and on the effectiveness of the domestic response. This book is a timely exploration of how objectives and implementation have been misconceived to the detriment of both Europe and Greece. It is a huge wake-up call that should help shift the terms of current public affairs debate." -Kevin Featherstone, Professor, London School of Economics and Political Science"Theodore Pelagidis and Michael Mitsopoulos have written the definitive account of austerity's toll on the Greek economy. In the years ahead, as policymakers, investors, and academics debate the pros and cons of internal devaluation in the euro zone, this book will serve as the baseline work of reference. Thorough in its research and acute in its analysis, Greece: From Exit to Recovery? breaks important new ground in terms of how Greece's private sector has suffered much more than the Greek state over the past five years, and it raises pressing questions with regard to how far the Greek public sector has actually gone in terms of reforming itself. Required reading for all who are interested in Greece's future." -Landon Thomas Jr., Financial Reporter, New York Times "[This] work is a triple accomplishment. First, it reconstructs Greece's thirty years of missed opportunities for reform. Second, it credibly shows how European and IMF officials confused the surface fiscal crisis for a deeper and more important competitiveness crisis -and in the process punished the Greek private sector, instead of reforming the public sector. Most important, Pelagidisand Mitsopoulos don't just point fingers. Instead, they offer a hopeful pathway forward for Greece -one that unleashing the country's entrepreneurial and innovative talents. To seize that opportunity, Europe and Greece will need to act together." -Bill Antholis, Managing Director and Senior Fellow, The Brookings Institution
