A Greek way out? CEPS Commentary, 5 February 2015

In his analysis of the basic compromise that is emerging between the new left-wing government of Greece and its European partners, Daniel Gros emphasises that the key element will be how the real problem, namely liquidity, is dealt with.

The Greek Austerity Myth. CEPS Commentary, 10 February 2015

Since Syriza’s victory in Greece’s recent general election, some fear a return to the uncertainty of 2012, when many thought that a Greek default and exit from the eurozone were imminent and that a Greek debt crisis could destabilise – and perhaps even bring down – Europe’s monetary union. CEPS Director Daniel Gros explains in this CEPS Commentary how this time really is different.

The Fate of Greece in a ‘Genuine Economic and Monetary Union’: Lessons from a small island state. CEPS Hi-Level Brief, 19 June 2015 Friday, 19 June 2015

As the Greek debt drama reaches another supposedly decision point, Daniel Gros urges creditors (and indeed all policy-makers) to think about the long term and poses one key question in this CEPS High-Level Brief: What can be gained by keeping Greece inside the euro area at “whatever it takes”? As he points out, the US, with its unified politics and its federal fiscal transfer system, is often taken as a model for the Eurozone, and it is thus instructive to consider the longer-term performance of an area of the US which has for years been kept afloat by massive transfers, and which is now experiencing a public debt crisis. The entity in question is Puerto Rico, which is an integral part of the US in all relevant economic dimensions (currency, economic policy, etc.). The dismal fiscal and economic performance of Puerto Rico carries two lessons: 1) Keeping Greece in the eurozone by increasing implicit subsidies in the form of debt forgiveness might create a low-growth equilibrium with increasing aid dependency. 2) It is wrong to assume that, further integration, including a fiscal and political union, would be sufficient to foster convergence, and prevent further problems of the type the EU is experiencing with Greece.

The Greek economy is unlikely to benefit from further devaluation. CEPS Commentary, 3 July 2015

Martin Wolf offers an excellent analysis of how the Greek voter may feel about Sunday’s referendum.1 There is no good option: either be engulfed in the chaos following the rejection of the programme, exit and collapse of the economy or accept another programme.

The 2015 Greek Referendum. EPIN Commentary No. 24, 3 July 2015

The Greek government called a snap referendum on the proposals advanced by the EU partners and creditor, i.e. the draft Agreement submitted by the EU/IMF to the Eurogroup of 25 June 2015. There has been a major controversy among Greek constitutional lawyers about whether this referendum meets constitutional requirements. No doubt, the constitutional validity of this referendum could be challenged on pure normative terms (nature of the question, time limit); yet this shock call for a referendum appeared as the only political solution for the Greek government facing the dilemma of whether to take the plunge of having five-months of negotiations transformed into a negative-sum game.