Greek austerity raised debt ratios while destroying GDP and employment

Evidence

The terms of the deal were very clearly spelled out: the massive loans granted by the creditors to “save the country” would have to be accompanied by a “Memorandum of Understanding” (MoU)—stipulating (extremely) harsh austerity measures. Meanwhile, debt restructuring would remain as economically ineluctable as it was politically intolerable. As a result, the Greek predicament went from bad to worse: GDP fell by 25 percent between 2008 and 2013 and unemployment peaked at 27.5 in 2013, pushing whole sectors of society into poverty. The public debt/GDP ratio, on the other hand, continued to increase: by the end of the 2010s, it still amounted to approximately 185 percent (up from 103 percent in 2007). The weakness of the economic arguments for austerity had always been evident: it rather reflected the power asymmetries within the euro area and the priority given to the protection of French and German creditors. — Arthur Borriello and Anton Jäger, The Populist Moment, 172

Categorization

• QUESTION: The claim that austerity reflected creditor protection rather than economic logic is worth chasing—what did contemporaneous IMF/French/German analyses actually say?
• XREF: connects to: Greece lost a quarter of its GDP during the 2010s austerity decade — Arthur Borriello and Anton Jäger, The Populist Moment: The Left After the…, 112; Austerity cuts raised the debt-to-GDP ratios of Eurozone crisis states. — Mark Blyth, Austerity: The History of a Dangerous…, 30; Austerity failed to reduce Greek debt-to-GDP projections — Mark Blyth, Austerity: The History of a Dangerous…, 201 (+6 more)

Broader Connections

• Austerity cuts raised the debt-to-GDP ratios of Eurozone crisis states. #corroborates (0.95) — Mark Blyth, Austerity, 30
• Austerity failed to reduce Greek debt-to-GDP projections #corroborates (0.88) — Mark Blyth, Austerity, 201
• Austerity became self-defeating because it worsened the deficits it claimed to fix #expands (0.82) — Mark Blyth, Austerity, 516
• Austerity during recession deepens downturns and worsens state finances #corroborates (0.80) — Arthur Borriello and Anton Jäger, The Populist Moment, 108
• Austerity has never successfully reduced debt and instead causes instability, riots, and war #expands (0.78) — Mark Blyth, Austerity, 614
• Monetary austerity deliberately induced recession to discipline workers. #corroborates (0.72) — Clara E. Mattei, Escape from Capitalism, 154
• Austerity suppresses consumer demand by starving the population that sustains the economy #corroborates (0.72) — Clara E. Mattei, Escape from Capitalism, 349
• Monetary austerity deliberately manufactures unemployment to compress wages. #corroborates (0.72) — Clara E. Mattei, Escape from Capitalism, 284