Greece bailout ends – but belt-tightening not over


After almost a decade of tough austerity measures, Greece can financially “stand on its own feet” after receiving tens of billions of euros to help it fix its economy and banking sector.

The country has now successfully completed its third and final bailout programme to end a debt crisis that nearly resulted in it leaving the single currency at the height of the catastrophe.

The European Union, the European Central Bank and the International Monetary Fund loaned Greece a total of €289bn (£259bn) in three programmes, in 2010, 2012 and 2015.

The last bailout – a three-year European Stability Mechanism (ESM) programme launched in 2015 – saw €62bn (£55bn) of financial aid given.

A further €24.1bn (£21.6bn) was available under the programme but was not required.

Mario Centeno, chairman of the ESM’s board of governors, says Greece can now “stand on its own feet”.

“This was possible thanks to the extraordinary effort of the Greek people, the good cooperation with the current Greek government and the support of European partners through loans and debt relief,” he said.

“The ultimate goal of the financial assistance plan and reforms in Greece over the past eight years has been to create a new basis for healthy and sustainable growth.

A protest in Athens in May against planned pension reforms
Image: Protests against planned pension reforms have taken place in Athens

“It took much longer than expected but I believe we are there: Greece’s economy is growing again, there is a budget and trade surplus, and unemployment is falling steadily.”

The economic reforms the creditors demanded in return for the loans led to unpopular tax increases and spending, with the Greek economy shrinking by a quarter during the eight years and unemployment soaring by more than 27%.

Greece has slowly returned to growth and achieved budget surpluses, excluding debt repayments, of about 4% in 2016 and 2017, and officials say the jobless rate has fallen below 20%.

But the Greeks have seen little change to their day-to-day lives, and protests and strikes have been taking place this year against a new wave of austerity measures that will kick in now the bailout has ended.

Greece has already legislated for new reforms for 2019 and 2020 and will remain under supervision for several years.

Officials have warned the country still has a “long way to go” as it repays its loans which came with demands for more pension cuts and tax hikes.

“The reality on the ground remains difficult… the end of the programme is not the end of the road for reform,” said the EU’s economic affairs commissioner, Pierre Moscovici.

Yannis Stournaras, the governor of the country’s central bank, told the Kathimerini newspaper that “Greece still has a long way to go”.

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He warned that if Greece backtracks “on what we have agreed, now or in the future, the markets will abandon us and we will not be able to refinance maturing loans on sustainable-debt terms”.

Mr Stournaras also expressed concern that “if there is strong international turbulence, either in neighbouring Italy or Turkey or in the global economy, we will face difficulties in tapping markets”.

From – SkyNews