Greek Sovereign Defaults in Retrospect and Prospect

This article focuses on and critically reviews the four Greek sovereign defaults (1827, 1843, 1893 and 1932) and puts them into historical perspective. The argument is that each and every one of the defaults was not an isolated episode in the turbulent economic history of capitalism, but, rather, a manifestation of the internal weaknesses of the Greek economy magnified during the downturn phases of the 1815-1848, 1873-1896, and 1921-1940 long waves. Crucial for understanding the conditions that triggered these defaults were the short-sighted and often opportunistic policies adopted by the Greek governments of the time, which were eager to increase public spending based on borrowed money, thus contributing to a mounting public debt. As a consequence, Greek sovereign defaults of the past are worth studying in an effort to derive useful lessons and draw economic policy conclusions.