Greece, Ireland, Portugal, and Spainentered a period of severe economic and financial stress inthe aftermath of the 2008 crisis. Their collectiveexperience confirmed the primacy of total debt, private orpublic, in affecting the onset of, depth of, and recoveryfrom economic crises. The year 2010 and the years followinghave demonstrated the ways in which policy responses tocrisis-related downturns must be adapted when majorinternational partners experience simultaneous growthslowdowns and markets exhibit increased risk aversion. Thispaper compares the recovery experience of these countries inlight of recent policy debates and research on the impact ofmacroeconomic and structural reforms. It highlights that (a)the quality of the policies adopted to stabilize economiesin the short run affects growth recovery in the long run;and (b) macroeconomic policies (fiscal and monetary) aremost effective in supporting growth when they take intoaccount structural differences between countries and whenpolicies complement each other. The country experiencesindicate that a holistic view of factors affectinginvestment, exports, and employment is needed to understandthe impact of macroeconomic and structural reforms onoutput. In the absence of such a holistic view, policy mayneglect to influence the binding constraints to growth.
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