Once mired in financial calamity, Greece enjoying economic revival
It’s nearly springtime in Athens: Street trees are heavy with citrus, wildflowers are erupting in the pine-scented hills and the air is thick with talk of a Greek exit.
But not the kind of exit that has preoccupied the country, and Europe, in so many seasons past.
Instead of Greece crashing out of the eurozone, and perhaps taking the currency’s credibility with it, the country is on the verge of something many never thought possible: a successful exit from the bailouts that have kept its debt-ridden economy afloat for the better part of a decade.
And that’s not the only surprising sign of revival for a country that weathered the worst peacetime economic crisis of any industrialized nation since the Great Depression.
Unemployment, which peaked near an eye-popping 30 percent in 2013, is down below 20 percent and falling. Once-stratospheric bond yields — a sign of investor panic — have landed safely back to earth. Overall growth in 2018 is due to match the healthy clip of the United States.
Greece’s escape from what was once widely seen — even by its own government — as an indefinite slide into economic oblivion resonates well beyond the country’s borders.
It reflects a return to relative normalcy across Europe, which, for the first time since the global financial crisis began in 2008, is looking economically vibrant, with a robust currency and, at least compared with its peers in the Anglosphere, less potential for market-rattling political maneuvers.
“Europe now has a story to tell: ‘We used to be the punching bag, but look at the U.S. or look at the U.K.,’” said George Pagoulatos, a professor at the Athens University of Economics. “Europe has suddenly emerged as a pole of stability, and the euro is now clearly at the core of the European project.”
That is not to say that Greece or Europe are fully healed. For Greece, especially, the impact of a downturn that wiped out a quarter of the nation’s economic value runs deep, and is still vivid in the minds and pocketbooks of the country’s 11 million citizens.
But instead of managing endless emergencies, European leaders are now focused on trying to shore up the structure of their crisis-prone currency before the next storm hits.
Instead of staving off bank foreclosures and government credit defaults, Greek politicians are debating how and when to share their growing budget surplus with taxpayers.
None of that could be predicted — for Greece or for Europe — less than three years ago, when the two seemed lockedonacollisioncoursethat carried grave threats for both.
Throughout the spring and early summer of 2015, the newly elected leftist government in Greece and its austerity-minded creditors stared each other down as a deadline loomed for repaying a portion of the country’s vast debt.
Greek officials demanded debt forgiveness and less stringent terms for getting their books back in balance. The creditors — a troika consisting of the European Commission, the European Central Bank and the International Monetary Fund — held firm, threatening to kick Greece out of the eurozone unless its terms were met.
The Greeks blinked first, accepting a new $107 billion bailout largely on its creditors’ terms. But not before the country missed one of its payments, its banks closed for over a week to avoid insolvency, and long lines formed nationwide at ATMs that spit out a daily maximum of 60 euros per customer.
Greece’s economy is forecast to grow at 2.5 percent in 2018, beating the 2.3 percent average for the eurozone and the European Union as a whole.