As a result, the economy soon became trapped in a vicious circle of austerity and recession. Third, there were certain mismatches in the design of the economic adjustment programmes.
Given the size of the fiscal imbalances back in May 2010, when the first economic adjustment programme was initiated, more emphasis was placed on tax rate increases, pension reform, streamlining budgetary procedures, increasing fiscal transparency, as well as on financial sector restructuring. Less emphasis was placed on growth-enhancing reforms, tax collection and tax evasion, and on reorganising the public sector.