This paper reviews the fiscal developments that led Greece from a successful convergence process and the adoption of the Euro to an unprecedented prolonged recession. Analysis of all fiscal aggregates reveals the policies behind the sovereign crisis, both on the expenditure and the revenue side....

The paper presents a model-based assessment of fiscal multipliers operating in the euro area during the period 2011-2014. The assessment is conditional on two distinct reactions of the sovereign risk premium (either responding endogenously to fiscal shocks or being an exogenous process) and two...