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The political economy of the Greek debt crisis: a tale of two bailouts

We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that the second bailout was not on the Pareto frontier and sketch political-economy arguments for why this may be so.

Silvia Ardagna and Francesco Caselli

20 March 2012     Paper Number CEPSP25

This CEP report is published under the centre's programme.