In economics, austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies can include spending cuts, tax increases, or a mixture of the two. Austerity policies demonstrate governments' liquidity to their creditors and credit rating agencies by bringing fiscal income closer to expenditure. European Central Bank (ECB)
One of the seven institutions of the European Union (EU) listed in the Treaty on European Union (TEU). It is the central bank for the euro and administers the monetary policy of the 17 EU member states which constitute the Eurozone, one of the largest currency areas in the world. Financial contagion
It refers to a scenario in which small shocks, which initially affect only a few financial institutions or a particular region of an economy, spread to the rest of financial sectors and other countries whose economies were previously healthy, in a manner similar to the transmission of a medical disease. Financial contagion happens at both the international level and the domestic level Eurozone
An economic and monetary union (EMU) of 17 European Union (EU) member states that have adopted the euro (€) as their common currency and sole legal tender
Greek Public Debt Crisis
Since late 2009 Greece has earned itself a place among the countries dubbed ‘the sick men of Europe’ in terms of public Debt Management.Although the Public Debt problems heightened between late 2009 and 2010,Greece’s debt percentage had always been higher than the average debt percentage of the Eurozone (an economic and monetary union (EMU) of 17 European Union (EU) member states that have adopted the euro (€) as their common currency and sole legal tender) for more than a decade prior to the crisis that forced the state to as for assistance from other countries and International financialorganizations.
Figure 1: Comparison of Greece’s against the...