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Greece's soft budgets in hard times. CEPS Commentary, 7 March 2012

Gros, Daniel. (2012) Greece's soft budgets in hard times. CEPS Commentary, 7 March 2012. [Policy Paper]

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    The first de facto default of a country classified as ‘developed’ has now taken place, with private international creditors ‘voluntarily’ accepting a ‘haircut’ of over 50% on their claims on the Greek government. As a result, Greece now owes very little to private foreign creditors. The country also agreed to even more stringent budget targets and, in return, received funding of more than €100 billion ($134 billion) to stabilise its banking system. The purpose of the entire package is to avert a full-scale default and allow the country to complete its financial adjustments without unsettling financial markets too much. But this approach (a haircut on private sector debt plus fiscal adjustment) is unlikely to work on its own.

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    Item Type: Policy Paper
    Subjects for non-EU documents: Countries > Greece
    EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 12 Mar 2012 18:03
    Number of Pages: 3
    Last Modified: 12 Mar 2012 18:03

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