The Travels of the Washington Consensus: From the Global Financial Crisis to the Greek Financial Crisis

Abstract

Regarding the Global Financial Crisis of 2007–2008, the supporters of the Washington Consensus, with the International Monetary Fund in a leading role, followed the motto ‘never let a crisis go to waste.’ The idiosyncrasies of the Global Financial Crisis were not enough to differentiate any policies associated with the Washington Consensus in alleviating the economic and social cost of the crisis. Consequently, crucial questions arise: How did the Washington Consensus grow from being a prescription for developing countries to being applied to developed, industrialized countries dealing with the global financial crisis? How was the Washington Consensus offered as a solution to the European financial crisis, with Greece selected as the first test case? By utilizing Greece as a case study, the aim of this research is to determine the process by which the Washington Consensus enlarged its sphere of application to developed economies and examine how austerity in the form of the Washington Consensus was imposed upon the Greek people as a solution.

KEYWORDS :

• Washington consensus
• global financial crisis
• European financial crisis
• Greek financial crisis
• IMF

JEL CODES: :

• F62 O17 O19

Acknowledgement

The author is grateful to Wolfram Elsner for his invaluable comments and to Melissa Bailey for her relentless contributions and input.

Notes

1 https://www.imf.org/external/np/exr/center/mm/eng/mm_intro.htm