Prodromos Vlamis

The Greek crisis: Causes and implications

This paper presents and critically discusses the origins and causes of the Greek fiscal crisis and its implications for the euro currency as well as the SEE economies. In the aftermath of the 2007-2009 financial crisis the enormous increase in sovereign debt has emerged as an important negative outcome, since public debt was dramatically increased in an effort by the US and the European governments to reduce the accumulated growth of private debt in the years preceding the recent financial turmoil. Although Greece is the country member of the eurozone that has been in the middle of this ongoing debt crisis, since November 2009 when it was made clear that its budget deficit and mainly its public debt were not sustainable, Greece’s fiscal crisis is not directly linked to the 2007 US subprime mortgage loan market crisis. As a result of this negative downturn the Greek government happily accepted a rescue plan of 110 billion euros designed and financed by the European Union and the IMF. A lengthy austerity programme and a fiscal consolidation plan have been put forward and are to be implemented in the next three years.

Greek fiscal crisis and repercussions for the property market

The aim of the paper is to present a review of the fiscal imbalances and debt crisis in Greece and identify the possible links with the recent developments in the Greek property market. We follow a non-technical approach to discuss a number of factors that have contributed to the fiscal crisis that Greece has been experiencing since October 2009. We critically analyse both the “internal” causes of the deteriorating fiscal stance of the Greek economy (that is, the prolonged macroeconomic imbalances that the Greek economy faces and the credibility problem of macroeconomic policy) and the “external” factors that might have contributed to the Greek fiscal crisis (that is implications of the recent financial turmoil and the timing of the response of Europe to the Greek fiscal crisis). We then study the extent to which fiscal imbalances and the debt crisis have affected the Greek property sector. One of the distinctive features of the paper is to critically discuss the direct and indirect effects of the prolonged macroeconomic imbalances on the Greek property sector. Our analysis indicates that the current fiscal stance of the Greek economy and the Greek property market crisis are intertwined. We believe that these results are useful and provide some evidence that current economic recession has a considerable adverse effect on the property sector in Greece.

Symmetric or Asymmetric Interest Rate Adjustments? Evidence from Southeastern Europe

The purpose of this paper is to examine how effectively the wholesale interest rates are transmitted to the retail rates and whether the interest rate passthrough is symmetric or asymmetric in Greece, Bulgaria, and Slovenia. The disaggregated general-to-specific methodology is applied for testing the symmetry hypothesis in these economies. It is evident from our results that variations exist across the countries examined regarding the monetary transmission process and the symmetry hypothesis alike. This can be interpreted as an indication of a different level of competition, development, and liberalization among the banking systems in these Southeastern European economies.

The Greek construction sector: an overview of recent developments

Purpose – The aim of this paper is to present a review of the developments in the Greek construction sector since the year 2000.Design/methodology/approach – The Greek construction sector – one of the most dynamic sectors of the Greek economy – grew quite strongly over the last decade. The paper follows a rather more descriptive approach to examine and analyse the factors that significantly boosted construction activity in Greece since the year 2000. It also studies and critically analyses the extent to which the Greek macro‐environment (legal‐political, economic, socio‐cultural, technological and demographic), as part of a broader nexus of domestic and global dynamics, affects construction companies.Findings – The results indicate that the domestic and global macro‐environment have a substantial effect to the market participants in the Greek construction sector. The ability of the Greek construction companies to deal with, and in some cases take advantage of, the constantly changing domestic and global m...

Saving, investment and capital mobility in EU member countries: a panel data analysis of the Feldstein–Horioka puzzle

ABSTRACT In this paper, we reexamine the long-standing and puzzling correlation between national saving and investment in 14 European Union (EU) countries. We employ a panel data set for the period 1970–2015 and we apply recently developed maximum likelihood panel cointegration methodologies. We find that there exists a long-run relationship between savings and investment for this panel of EU member countries, with the savings retention coefficient being low in magnitude but statistically different than zero. Therefore, we argue that there is weak evidence in favour of the Feldstein–Horioka puzzle and that the long-run international solvency condition is maintained in most of these countries. This evidence implies a moderate degree of capital mobility which is consistent with the macroeconomic experience of these countries during the period under investigation.