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Abstract:

CEP Report
The Political Economy of the Greek Debt Crisis: A Tale of Two Bailouts
Silvia Ardagna and Francesco Caselli
March 2012
Paper No' CEPSP25:


Tags: debt crisis; greece; political economics

We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that the second bailout was not on the Pareto frontier and sketch political-economy arguments for why this may be so.