In the aftermath of the global financial crisis, Greece entered the 2010s with a large fiscal deficit, high public debt, and a credibility shock after the revision of fiscal statistics in 2009. Unable to roll over its debt at sustainable interest rates, the country requested external financial assistance and subsequently implemented three consecutive adjustment programmes (2010–2012, 2012–2015, 2015–2018) under the joint oversight of the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF) [1,2,3].

The programmes shared three broad pillars: (a) rapid fiscal consolidation to restore debt sustainability and regain access to the financial markets; (b) internal devaluation via wage and price adjustment, given that nominal devaluation was not possible in the euro-area membership; and (c) structural reforms intended to raise productivity and competitiveness and improve governance and institutional quality [2,3,4].

Ex post evaluations by the IMF’s Independent Evaluation Office (2016) and by the European Commission (2023) highlight two features of the adjustment programmes that directly underpin the focus of this paper [2,5]: First, the size and the front-loaded nature of the consolidation, leading to contractionary effects and contributing to a deeper and prolonged recession than initially projected [2], and second, the structural reform programme being too complex for the country’s administrative and political capacity, thus resulting in implementation gaps, delays, and reversals [2,5]. The combination of this fiscal tightening imposed on top of an institutional system unable to absorb and enforce the load of the reforms created a persistent misalignment which shaped the “recessionary” dynamics that followed.

Academic work reinforces this assessment. Recently published cross-country evidence for European economies further suggests that the macroeconomic effects of fiscal adjustment and reform programmes are strongly conditioned by institutional quality and implementation capacity, reinforcing the view that policy design alone is insufficient in the absence of effective governance frameworks [6]. A strand of the literature frames the Greek crisis as the interaction of long-standing supply-side weaknesses—low productivity, rigid product markets, weak institutions—with a sudden, demand-crushing fiscal shock [7]. Similar dynamics have been documented in Central and Eastern Europe, where front-loaded austerity during the global financial crisis coincided with output losses, while the subsequent recovery was largely driven by external demand rather than the measures themselves [8]. Simulation-based analyses further show that the specific timing and composition of consolidation—large cuts in public investment, a short initial programme horizon, and prolonged uncertainty—explain much of the unanticipated depth of the recession and the overshooting of debt-to-GDP ratios [3]. Other work highlights the role of institutional deterioration in amplifying output losses beyond what can be explained by austerity alone [9]. Greece’s recovery was also held back by its weak digital competitiveness, shortages in skilled workers, and the slow spread of new technologies. These digital weaknesses created additional frictions throughout the 2010s, which in turn reduced the effectiveness of reforms [10].

A rising body of research argues that state capacity, institutional quality, and administrative effectiveness are critical determinants of whether structural reforms actually translate into sustained productivity gains and entrepreneurial upgrading [11,12]. In this context, digital governance can be understood as an institutional capacity that mitigates information asymmetries, lowers compliance and transaction costs, and enhances the predictability and enforceability of public action [13,14]. These characteristics are particularly pertinent in crisis and adjustment environments, where uncertainty is elevated and reform credibility is fragile. This perspective drives the paper’s emphasis on transparency and digital public services as components of the institutional framework within which adjustment policies operate.

This paper builds on these evaluations and on the academic literature and connects them with the evolution of productivity, entrepreneurship, and digital governance in Greece. It advances three main arguments:

• Timing: Contractionary measures (fiscal tightening and internal devaluation) were front-loaded, while institution-building and digital modernization were back-loaded.
• Institutional frictions: Fragmented governance, slow justice, and limited administrative capacity created frictions that dampened and delayed the effects of structural reforms.
• Digital transformation: Transparency and digital-governance reforms in the late 2010s and early 2020s—especially Diavgeia and gov.gr—represent a second generation of reforms that directly target those frictions and form part of the explanation for Greece’s recent improvement in performance.

The purpose of the study is to examine how macroeconomic adjustment, institutional capacity, and digital governance interacted with and conditioned productivity and entrepreneurial dynamics during and after Greece’s crisis. Greece is treated as a revealing case study of reform within a context of constrained administrative capacity, from which broader lessons can be gained for the formulation and sequencing of adjustment programmes in the digital age. The contribution lies in synthesizing programme evaluations and empirical indicators to highlight digital governance and transparency reforms as complements that condition the effectiveness of structural reforms rather than ancillary or merely technological enhancements.

This article adopts a narrative review and analytical-synthesis approach. It draws on four categories of evidence: (a) ex post evaluations by the European Commission, the IMF, and independent bodies; (b) macroeconomic and productivity indicators from Eurostat, OECD (Organisation for Economic Co-operation and Development), ECB, AMECO (annual macro-economic database of the European Commission’s Directorate General for Economic and Financial Affairs), and the Bank of Greece; and (c) entrepreneurship and firm-level data, particularly the Global Entrepreneurship Monitor’s Total Early-Stage Entrepreneurial Activity (GEM-TEA) index and national business demography statistics. The paper integrates these sources to illuminate the interaction between adjustment policies, institutional frictions, and the evolution of productivity and entrepreneurship. This mixed-evidence approach is suited to understanding sequencing effects, implementation capacity, and the enabling role of digital transformation in reform environments. While the paper does not attempt causal identification, the mixed-evidence narrative approach is suited to tracing mechanisms, sequencing effects, and institutional complementarities that can inform testable hypotheses for future research.

Section 2 synthesizes evidence from programme evaluations as well as macroeconomic, productivity, entrepreneurship, and institutional indicators. Section 3 discusses the implications for reform timing, institutional frictions, and the role of digital governance as an enabling complement. Section 4 concludes with lessons for adjustment design, limitations of the analysis, and directions for future research.