Greece faced a sovereign debt crisis in the aftermath of the 2007–2008 financial crisis. Widely known in the country as The Crisis (Greek: Η Κρίση, romanized: I Krísi), it reached the populace as a series of sudden reforms and austerity measures that led to impoverishment and loss of income and property, as well as a humanitarian crisis.[5][6] In all, the Greek economy suffered the longest recession of any advanced mixed economy to date and became the first developed country whose stock market was downgraded to that of an emerging market in 2013.[7] As a result, the Greek political system was upended, social exclusion increased, and hundreds of thousands of well-educated Greeks left the country[8] (most of which had returned to the country as of 2024[9]).
The crisis led to a loss of confidence in the Greek economy, indicated by a widening of bondyield spreads and rising cost of risk insurance on credit default swaps compared to the other Eurozone countries, particularly Germany.[17][18] The government enacted 12 rounds of tax increases, spending cuts, and reforms from 2010 to 2016, which at times triggered local riots and nationwide protests. Despite these efforts, the country required bailout loans in 2010, 2012, and 2015 from the International Monetary Fund, Eurogroup, and the European Central Bank, and negotiated a 50% "haircut" on debt owed to private banks in 2011, which amounted to a €100bn debt relief (a value effectively reduced due to bank recapitalization and other resulting needs).
After a popular referendum which rejected further austerity measures required for the third bailout, and after closure of banks across the country (which lasted for several weeks), on 30 June 2015, Greece became the first developed country to fail to make an IMF loan repayment on time[19] (the payment was made with a 20-day delay).[20][21] At that time, debt levels stood at €323bn or some €30,000 per capita,[22] little changed since the beginning of the crisis and at a per capita value below the OECD average,[23] but high as a percentage of the respective GDP.
Between 2009 and 2017, the Greek government debt rose from €300bn to €318bn.[24][25] However, during the same period the Greek debt-to-GDP ratio rose up from 127% to 179%[24] due to the severe GDP drop during the handling of the crisis.[26][27]
Greek GDP
Real GDP (chained 2010 Euros)
Nominal GDP
Relative change in unit labour costs, 2000–2017Real unit labour costs: total economy (ratio of compensation per employee to nominal GDP per person employed)