Greek Debt/GDP: Only 22% In 1980

This graph shows the government debt to GDP ratio for Greece. As you see the debt was mostly accumulated in the eighties. I will sum up some of the events which are of most importance this this graph:

• In the 1980's spending as a percentage of GDP rose by 19 points from 24% in 1980 to 43% in 1988, while revenue rose by only 7 points form 20% to 27%.
• In the beginning of the 90's Greece was in recession twice (1990 and 1993). The deficit and the borrowing cost both spiked to over 10%. 
• Starting in 1993 the government started a policy of fiscal consolidation to get permission to join the Euro-Zone. The deficit shrank to 3% of GDP and the borrowing costs fell to just 6% in 2000.
• When Greece was allowed to enter the Euro-Zone the 'fiscal discipline' faded away and budget deficits began to rise again. This was not followed by higher borrowing yields though, which may had something to do with the distorting of the numbers by the Greek government.

Greek Default Watch