80s decade ouLpuL gap was poslLlve wlLh lncreaslng unemploymenL Creece's ouLpuL and lnflaLlon

performance lmproved markedly beglnnlng ln Lhe mld1990s CuLpuL growLh acceleraLed afLer 1994
LxpendlLures ln preparaLlon for Lhe Clymplc Cames of 2004 caused an upward shlfL ln ouLpuL and
lower unemploymenL level Consumer prlce lnflaLlon averaged 1723 per cenL ln Lhe 20year perlod
Lo 1994 lL was subsequenLly sharply reduced by mld1999 lL fell Lo abouL 2 percenL lnflaLlon
sLarLed rlslng afLer 1999 because of soarlng oll prlces and a depreclaLlon of Lhe drachma (old
currency)ln Creece wlLh Lhe prohlblLlon of Lhe moneLary flnanclng of Lhe ubllc SecLor 8orrowlng
ln 1994 a slgnlflcanL LlghLenlng of moneLary pollcy had Laken place LhaL year whlch lald Lhe
foundaLlon for Lhe dlslnflaLlon sLarLlng 1993llscal pollcy was progresslvely and sharply LlghLened
LhroughouL Lhe perlod 19932000 1he slgnlng of Lhe MaasLrlchL 1reaLy ln 1992 and Lhe
governmenL's publlclysLaLed ob[ecLlve of [olnlng Lhe euro area provlded powerful lncenLlves Lo
garner supporL for LlghL flscal pollcy Measures Lo lmprove Lhe efflclency of Lax collecLlon were
sLepped up
1he Luropean Commlsslon revlsed deflclL flgure for 2009 from Lhe 37 of Cu ln prevlous Aprll Lo
over 12 slammlng Lhe lnLegrlLy of Lhe Creek governmenL's sLaLlsLlcal daLa Creece also admlLs Lo
falslfylng daLa represenLlng lLs soclal securlLy surplus ln 2001 ln order Lo galn euro membershlp 1he
revelaLlon of Lhe real sLaLe of Creece's publlc flnances ralsed fears of a posslble soverelgn defaulL by
Creece and lLs secesslon from Lhe slngle currency ln early 2010 Creece aLLempLed Lo persuade Lhe
Chlnese governmenL Lo lnvesL ln a hefLy governmenL bond buL was unsuccessful 8y May 2010 Lhe
Lu and lMl had LogeLher agreed Lo provlde Creece wlLh a debL flnanclng package LoLalllng t110
bllllon 1he loan package comes on Lhe condlLlon LhaL Creece enacL sweeplng spendlng cuLs ln order
Lo curb Lhe budgeL deflclL from 136 of Cu recorded ln 2009 Lo less Lhan 3 of Cu by 2014
10
3
0
3
10
13
20
23
30
1
9
6
0
1
9
6
3
1
9
6
6
1
9
6
9
1
9
7
2
1
9
7
3
1
9
7
8
1
9
8
1
1
9
8
4
1
9
8
7
1
9
9
0
1
9
9
3
1
9
9
6
1
9
9
9
2
0
0
2
2
0
0
3
2
0
0
8
unemploymenL( of LoLal
labor force)
lnflaLlon consumer prlces
(annual )
Cu growLh (annual )