Greece’s bail-out odyssey is over
• Country regains its fiscal sovereignty but Greeks say it is bankrupt and nothing will change for many years until loans are paid off
Greece has emerged from the biggest bail-out in economic history after nine years of creditor-mandated austerity. European institutions are hailing the exit a success, but jaded Greeks are finding little reason to celebrate.
Greece has emerged from the biggest bailout in economic history after nine years of creditormandated austerity, with European institutions hailing the exit a success but jaded Greeks finding little reason to celebrate.
The milestone weans the debt-burdened eurozone member off financial lifelines offered on three occasions by creditors over the best part of a decade, and the country will now need to support itself.
Athens will rely on bond markets to refinance its debt, leaving behind a crisis that shrank its economy by a quarter and pushed many into poverty.
“Nothing changes for us,” shrugged Christos Iosifidis, an 80-year-old pensioner.
“We are a bankrupt country, and it won’t change for many more years.”
Since early 2010, Greece has relied on €260bn lent by its eurozone partners and the IMF.
The European Stability Mechanism (ESM), the eurozone’s bailout fund, expressed confidence that Athens could manage without an international financial safety net.
“Today we can safely conclude the ESM programme with no more follow-up rescue programmes as, for the first time since early 2010, Greece can stand on its own feet,” Mario Centeno, the chairman of the ESM’s board of governors, said on Monday.
Prime Minister Alexis Tsipras was expected to address the nation on Tuesday to mark Greece regaining fiscal sovereignty and the ability to set its own economic policies.
Greek media reported that Tsipras would symbolically make the speech on Ithaca, the island to which Odysseus returned from the Trojan war after a 10-year voyage recounted by classical poet Homer.
“We are entering a new era for the Greek economy and Greece,” government spokesperson Dimitris Tzanakopoulos told Real FM, a radio station.
“The Greek people should celebrate,” ESM’s head Klaus Regling said. “Tomorrow, I will celebrate it with a glass of ouzo.”
But with unemployment just under 20%, the mood in Athens was far from festive.
“I made much more money in my 30s than now,” said waiter Costas Papaconstantinou, 54, at a cafe in the city centre. “Were it not for tourism, we would be finished. There is no bailout exit, we will be under a bailout until 2060, until we pay off these loans,” he said.
Shut out of bond markets after a fiscal crisis, Greece officially asked for a bailout in April 2010 from the IMF and its eurozone partners. They granted €110bn in loans to avert a financial meltdown. Two more aid packages followed.
Post–bailout, Greece has committed to demanding primary budget surpluses, excluding debt-servicing outlays, of 3.5% of the country’s annual economic output until 2022, and 2.2% until 2060. The wounds of the debt crisis are still healing.
“Greece is finally exiting, albeit formally, a long bailout period that left 924,000 jobless, shut down 250,000 businesses and left most Greeks owing an internal debt of €227bn to the taxman, pension funds and to banks,” said Vassilis Korkidis, head of the Piraeus Chamber of Commerce.
“It was more a day of reckoning and not of celebrating as the bailouts might be over but austerity measures and taxes continued to squeeze Greeks,” said Korkidis.