Greece’s Crisis: Testing the Viability of the Euro Project
Yannos Papantoniou, former Minister of Economy and Finance of Greece
Prepared remarks delivered at the Peterson Institute for International Economics
March 12, 2012
Origins of the Debt Crisis
The graphs containing economic indicators for the major currency areas in the advanced sector of the world economy suggest that the euro area’s debt crisis does not spring from some fundamental weakness in its overall performance [see Indicators 1 and 2, pp. 5–6]. Per capita incomes are similar to Japan’s and within reasonable distance from those prevailing in the United States. Government deficits are lower than either in the United States or Japan and have grown less than in the United States during the global financial crisis. Debt levels also compare favorably while their growth is more subdued than in the United States and Japan. The euro area aggregate current account is balanced as opposed to Japan’s surplus and the US deficit. Germany’s substantial current surplus stands out as an exception.