Greeks see little cause for joy as bailout era ends

ATHENS: European institutions hailed Greece’s exit from its final bailout yesterday, expecting the debt-burdened euro zone member to stand on its own feet after nine years of financial nursing but the mood in Athens was subdued as many problems remain.

Emerging from its third bailout since 2010, Athens will rely on bond markets to refinance its debt, officially leaving behind a crisis that shrank its economy by a quarter and forced it to implement painful austerity.

Since early 2010, Greece has relied on the biggest bailout in economic history,

more than €260 billion ($300 billion) lent by its euro zone partners and the International Monetary Fund.

The European Stability Mechanism (ESM), the euro zone’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 in a statement.

ESM chief Klaus Regling told a Greek newspaper that Greece could be a success story just like Portugal, Spain, Ireland and Cyprus — the other euro zone countries

which needed bailouts after the global financial crisis — as long as it continues to work on restoring its partners’ trust.

Regling described the end of the bailout as great news.

“The Greek people should celebrate,” he told Sunday’s Ethnos newspaper. “Tomorrow, I will celebrate it with a good glass of ouzo.”

Prime Minister Alexis Tsipras is expected to address the nation today on the milestone exit, which will enable Greece to regain sovereignty and set its own economic policies.

Greek media reported he would symbolically make the speech on Ithaca, the island where Odysseus returned home from the Trojan war after a 10-year voyage

recounted by Greek classical poet Homer.

But with unemployment just under 20%, the mood on the streets of Athens was far from festive.

“I made much more money in my thirties 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 with the IMF and its euro zone partners. They granted 110 billion euros 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 behind 924,000 jobless, shut down 250,000 businesses and left most Greeks owing an internal debt of 227 billion euros to the taxman, pension funds and to banks,” said Vassilis Korkidis, head of the Piraeus Chamber of Commerce.

He said it was more a day of reckoning and not of celebrating as the bailouts may be leaving but austerity measures and taxes continue to squeeze Greeks.