ABSTRACT
The Greek economy has been in continuous recession since 2008. GDP decreased by 20.4 per cent between 2007 and 2012 and employment fell by 18.5 per cent between December 2008 and December 2012. Greece was one of the EU Member States least hit by the global financial crisis in 2008–9, but is currently undergoing the most severe structural crisis of her recent history, triggered by a sovereign debt crisis that erupted at the end of 2009. Since the beginning of 2010, a series of austerity packages have been implemented while in May 2010 the country was granted financial aid by the other Eurozone countries and the IMF, conditional on the strict implementation of an Economic Adjustment Programme (EAP) for the years 2010–14, accompanied by a memorandum of understanding between the Greek government and its creditors (European Commission 2010). EAP is built around two main objectives: fiscal consolidation and internal devaluation, linked to two quantified targets (a) bringing government deficit below 3 per cent in accordance with the European Growth and Stability Pact requirement and (b) curbing nominal labour costs in the business sector by 15 per cent in order to recoup losses in price competitiveness during 2001–9.
