The Return of the Greek Patient: Greece and the 2008 Global Financial Crisis

The 2008 financial crisis found the Greek economy in a position of fiscal vulnerability, given the large public debt, and structural weaknesses, demonstrated in a huge current account deficit. The banking system was relatively robust, but exposed to imported risks from the emerging Southeast European markets. The government adopted a 'financial crisis reaction plan'. Its reaction affirmed long-lasting features of Greece's 'credit-based', partly state-controlled financial system. Sectors most visibly affected by the crisis are housing construction, tourism, shipping and the small-medium enterprise sector. Paradoxically, some facets of relative underdevelopment of the Greek model of capitalism are serving to mitigate the intensity of the crisis.