It is a historic day for the Greeks. After twelve years of budgetary surveillance imposed by the European Commission, the country is delivered from this constant control, which they experienced as a humiliation. Prime Minister, Conservative Kiriakos Mitsotakis, stressed in a message to the nation “that a new clear horizon of growth, unity, prosperity emerges for all”.
However, no euphoria in Greece. Two days earlier, Finance Minister Christos Staikouras put it into perspective: “We are happy, but there is no enthusiasm. That doesn’t mean we can do whatever we want. It just means that we will follow the same rules as other European countries, whereas until now we had to respect much tougher rules than other countries. But this lifting of budgetary surveillance is the recognition of the terrible sacrifices of Greek society. »
Bailouts in exchange for austerity
This control dated from 2010. At the time, the Greek Prime Minister, the socialist Georges Papandreou, noting that the coffers were empty, had to, urgently, and to avoid bankruptcy, appeal to the IMF. It was the start of the nightmare. The country’s creditors, IMF, EU, ECB (European Central Bank) then imposed on Greece three rescue plans totaling 289 billion euros, in exchange for austerity measures: freezing of hiring in the function public, lower wages and pensions, amputation of health and education budgets.
Unemployment had risen to 30%, as had the share of the population below the poverty line. Taxes had risen by 52% and many public assets had been privatized to reduce the colossal debt. The anger of the Greeks had resulted in the entry into Parliament of the neo-Nazi Golden Dawn party. He will serve there until 2019.
The Greek economy remains fragile
Today, the country has come a long way but the economy remains fragile. Inflation and unemployment are at 12%, natural gas has increased by 174%, electricity by 57% and rents by 31% over one year. Worse, the debt, which was at the start of the crisis at 177% of GDP, has now reached 189%.
Also, for Kostas Melas, professor of economics at the Panteion University of Athens, this exit from the surveillance program “is just a date in a calendar. Nothing more. We are still creating deficits, whereas from 2023 Greece is supposed to generate a 2.1% budget surplus, or even more, and this until 2060. We are far from it..
Growth expected at 4% this year
Added to this are the reforms that the country still has to carry out by October to obtain the disbursement of the benefits of State bonds, amounting to 750 million euros. Also the Greeks, even if the economy of the country has improved, they especially have the impression that a new crisis is preparing.
According to rating agencies, Greece is expected to grow by 4% in 2022, almost double that of the European Union. But, despite an exceptional tourist season, this figure will probably have to be revised downwards, according to Kostas Melas, “because of the drop in consumption expected from September”. This is why the mood of the Greeks is not festive.