The Effects of the Economic Adjustment Programmes for Greece: A Quasi-Experimental Approach

Abstract

Three Economic Adjustment Programmes (EAPs) were implemented in Greece, between2010 and 2015, without achieving the proposed economic objectives. This article analyses the impactof the EAPs in Greece using the synthetic control method (SCM) and has three main contributions.First, it identifies a long-term negative impact worth 35.3 per cent of the Greek GDP per capita causedby the application of the EAPs. Second, it finds that three-quarters of the estimated negative andunsustainable impact accumulated over the 2010?2012 period. Third, it identifies a regressive effectof the EAPs on income distribution, the Greek population with lower incomes experienced a greaternegative effect caused by the adjustment programmes. These results underscore the need to reviewand correct the conditional financial assistance framework currently in force in the European Union