After years of arduous asceticism, Greece triumphantly merged from its third and last bailout on Monday. However, the officials have warned that the country in spite of everything has a “long way to go”.
The International Monetary Fund, the European Central Bank, and The European Union loaned Greece in three programmes, in 2010, 2012 and 2015 with a total amount of €289bn ($330bn).
With unemployment soaring to 27% and a quarter of its gross domestic product (GDP) vaporizing over eight years, the country was brought to its knees owing to the economic reforms that creditors demanded in return.
The impact of eurozone bailout on Greece’s growth is clearly visible as the unemployment rate has gone down below 20% and its once-vast public deficit has been turned into a budget surplus, cited the officials.
Estimating its financing needs being covered until the year-end of 2022, Greece plans its return to the capital markets.
The board chairman of the European Stability Mechanism (ESM), Mario Centeno, stated: “For the first time since early 2010 Greece can 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. It took much longer than expected but I believe we are there.”
However, Greek households continue to feel the waves of ostracized and stinging severity. EU’s economic affairs commissioner, Pierre Moscovici, said at the weekend: “The reality on the ground remains difficult. The time for austerity is over, but the end of the programme is not the end of the road for reform.”
Greece’s central bank governor, Yannis Stournaras further agreeing with Moscovici’s opinion said in an interview with the Kathimerini newspaper on Sunday, “Greece still has a long way to go. 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”.
Expressing his concerns over global market he further articulated, “if there is strong international turbulence, either in neighboring Italy or Turkey or in the global economy, we will face difficulties in tapping markets”.
“Now we have the opportunity to proceed with targeted reliefs, to proceed with tax reduction in 2019 and to support the social state and welfare,” said Prime minister Alexis Tsipras who is expected to welcome the end of the bailouts by broadcasting it publicly.
Although the country might have achieved budget superfluities, its hands still remain tied on social interests’ expenditure. Greece will remain under supervision for several years despite legislating new reforms for 2019 and 2020.
The opposition friendly newspaper To Vima wrote on Sunday, “The bailout is over, but the shackles and the asphyxiation are still on.” The rocketing indicators are however not yet indicating towards noticeable improvements in the everyday life of Greeks.
Economic professor Nikos Vettas understands that it is “imperative” to generate “very strong growth” in the coming years or else, “households that are in a very weak position due to 10 years of cumulative recession will continue to suffer”.
French finance minister Bruno Le Maire told Vima on Sunday, insisting that the country’s bailout exit was a “great success”. “The commitments assumed by Greece for the future are clear. I have no doubt that they will be respected.”
Despite facing all these issues, Greece, however, has managed to gain some credibility among the international community.