After bailout, Greece ready to be ‘normal’ again

The Associated Press from the pine-forested hills, Mr. Tsipras’ address provided a reminder of the beginning of Greece’s crisis. In 2010, thenPrime Minister George Papandreou addressed the Greek people from the eastern island of Kastellorizo, informing them that the country was effectively bankrupt and had toget financial help.

In return for the loans, successive governments imposed crippling cutbacks to right the country’s finances and balance budgets deeply in the red. Over the bailout era, the Greek economy contracted by a quarter and unemployment swelled with one in five still out of work. Incomes were repeatedly slashed and taxes hiked.

It’s clearly been a difficult, painful journey for Greece and one that has lasted almost as long as Odysseus’ legendary adventures.

“Now we have reached our destination,” Mr. Tsipras said. “The bailouts that carried with them austerity and recession and turned our country into a social desert are over.”

“Our country is regaining its right to define its own fortunes and future,” he added. “Like a normal European country, without having policies forced on it by foreign officials, with no more blackmail, no more sacrifices for our people.”

Greek stocks closed 1 percent down Tuesday. Yield on the 10-year Greek bond fell slightly to 4.2 percent.

Opposition leader Kyriakos Mitsotakis, whose conservative New Democracy party is leading polls ahead of scheduled parliamentary elections next year, poured scorn on Mr. Tsipras’ “false” Ithaca symbolism.

“We have not reached the end of the journey,” he said. “Today is the end of cheap funding, but the harsh measures and heavy commitments undertaken by Mr. Tsipras continue.”

The country remains shackled to the austerity demands of its former creditors. And even though it has little fear of new calls for cutbacks from abroad, its hardwon fiscal freedom still carries a high price.

Though the country will no longer have to pass regular checks from creditors to get money it needs to avoid bankruptcy, it cannot return to the old lax ways that put it in a mess in the first place.

During the past eight years, Greece avoided bankruptcy after getting loans worth $300 billion from other countries that use the euro, and from the International Monetary Fund.

Though Greece has turned a massive deficit on its budget into a surplus, further austerity measures remain on the horizon. Preagreed pension cuts and tax hikes lurk in coming years.

After that, it will really have to stand on its own feet and as such it will have to take consideration of the demands of investors in international bond markets — any slippage on the budget front could see the interest rates they charge for Greece to borrow rise again, potentially to unsustainable rates.

In the coming period, Greece must develop a working relationship with private investors, who will need robust signs of fiscal prudence, adherence to reforms and economic growth to agree to place their funds in a country whose credit rating is still well below investment grade.

The GSEE main private sector labor union contended Tuesday that the Greek people’s Odyssey is far from over.

“For us, there can be no exit from the bailouts unless there is an end to the vicious cycle of austerity, unemployment and widespread social crisis,” it said in a statement.