Moreover, the fiscal mix relied more on tax increases than on spending cuts. The Bank of Greece had advised that the mix should include 1/3 revenue increases (mainly through broadening the tax base) and 2/3 spending cuts.
Fiscal consolidation led to a recession that was deeper than expected, partly because it relied heavily on increases in tax rates and was not combined with structural reforms to boost growth prospects. What had started out as a sovereign debt crisis spilled over to the banking system.