Greece on Saturday concluded 12 years of EU fiscal surveillance, which was imposed in return for bailouts after a crushing debt crisis.
In November 2009, Athens revealed a sharp rise in its public deficit that eventually led to a financial crisis across the eurozone and wreaked havoc on Greek finances for a decade.
In exchange for bailout cash of 289 billion euros (US$290.1 billion at the current exchange rate) and to stop Greece from crashing out of the eurozone, a “troika,” made up of the IMF, the EU and the European Central Bank, demanded across-the-board reforms from Athens.
These included deep state spending and salary cuts, tax increases, privatizations and other sweeping reforms aimed at righting public finances.
The Greek economy contracted by more than one-quarter, unemployment spiked to almost 28 percent and skilled professionals emigrated in droves.
“A cycle of 12 years which brought pain to citizens, led to economic stagnation and divided society,” has ended, Greek Prime Minister Kyriakos Mitsotakis said. “A new horizon filled with growth, unity and prosperity emerges for all.”
“The Greece of today is a different Greece. We have recorded strong growth and a significant slide in unemployment of 3 percent since last year and 5 percent since 2019,” he added.
Ending the oversight is to strengthen Greece’s international market position by increasing its attractiveness to investors.
Athens is also to have greater control over its domestic economic policy.
“The end of enhanced surveillance for Greece also marks the symbolic conclusion of the most challenging period the euro area has experienced,” European Commissioner for Economic and Monetary Affairs Paolo Gentiloni said in a statement. “The sovereign debt crisis that defined the first years of the previous decade was a steep learning curve for our Union. Our strong collective response to the [COVID-19] pandemic indicated that Europe had learned the lessons of that crisis. We must show the same solidarity and unity as we navigate the troubled waters our economies are now entering.”
However, Greece — like fellow bailed-out EU members Spain, Portugal, Cyprus and Ireland — is still to be monitored by its creditors while paying back its debts. In Greece’s case, that is to take another two generations, with the last loans due for repayment in 2070.
According to European Commission projections, the Greek economy would grow 4 percent this year, much higher than the eurozone average of 2.6 percent.
However, Greece’s unemployment rate is one of the highest in the monetary union, its minimum wage one of the lowest and the country’s debt is 180 percent of GDP.
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