Greek government-debt crisis

Greece faced a sovereign debt crisis in the aftermath of the 2008 financial crisis. Widely known in the country as The Crisis (Greek: Η Κρίση, romanized: I Krísi), it forced the government to carry out a series of sudden reforms and austerity measures, concurrently with loss of income and property. 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, only starting to be reclassified back as a developed market by FTSE Russell in October 2025, followed by other index/market classification providers. As a result, the Greek political system was upended, social exclusion increased, and hundreds of thousands of well-educated Greeks left the country, although the majority of those who left had returned as of 2024.

The crisis started in late-2009, triggered by the turmoil of the worldwide Great Recession, structural weaknesses in the Greek economy, and lack of monetary policy flexibility as a member of the eurozone. The crisis included revelations that previous data on government debt levels and deficits had been underreported by the Greek government; the official forecast for the 2009 budget deficit was less than half the final value, and after revisions according to Eurostat methodology, the 2009 government debt was raised from $269.3bn to $299.7bn, about 11% higher than previously reported.

The crisis led to a loss of confidence in the Greek economy, indicated by a widening of bond yield spreads and rising cost of risk insurance on credit default swaps compared to the other eurozone countries, particularly Germany. The government enacted 12 rounds of tax increases, spending cuts, and reforms from 2010-16, 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; the payment was made with a 20-day delay.