| Summary: | Starting in the United States in July 2007 as a subprime mortgage crisis, the
financial crisis has become global in 2009 after spreading to Eurozone member countries,
particularly Greece. In the 1950s, Greece was the poorest country among the EU-15
countries, while it has become a middle-income country among the EU-27 countries in the 2000s. Greece had three important breakpoints during this period. From the 1950s
until the late 1970s, Greece was tested by the oil shocks like the rest of the world, but it
was one of the best performers in the OECD and the best one in Europe in terms of
economic growth rate. This strong growth came to an end in 1981 and low and negative
growth rates continued until 1990. As a result of strong efforts in the 1990-93 periods,
significant growth rates restarted in 1995. However, the government that came to power
following the 2004 election, opposed to reforms implemented between 1990 and 1993
and public spending radically increased from this date. The deterioration of public
finances that led to unsustainable high budget deficits and public debt stocks increased
the vulnerability of the Greek economy to external shocks. This constitutes the main
reason behind the financial crisis that broke out in 2009 in Greece. This study aims to
empirically analyze the causes and consequences of the Greek debt crisis. The
econometric approach used in this study is "artificial neural networks". According to
estimation results, the basic determinants of the Greek crisis are high budget deficits,
increasing public sector debt, insufficient per capita savings rates, and low economic
growth.
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