Greece bailout ends but with no substantial effect on citizens’ life

Informal working meeting on migration and asylum issues
Date: 24/06/2018 . Location: Belgium,Brussels – EC/Berlaymont. © European Union , 2018 Photo: Etienne Ansotte

It was yesterday when the Prime Minister Alexis Tsipras stated from the Greek island of Ithaca that the austerity measures are over cheering for the Greek bailout programme exit.

Mario Centeno, the chairman of the ESM’s board of governors, had said last Monday that Greece is once more a nation which doesn’t need any additional rescue programme thanks to the effort carried out by the Greek government and people.  Sharing the same views, Pierre Moscovici mentioned that the Greek economy has recovered concluding a three year European Stability Mechanism (ESM) stability support programme.

However, the International Monetary Fund (IMF) reports that Greece still faces many challenges which include its economic growth and staggering debt.

Background

The Greek government has been under surveillance and financial assistance since 2010. In the last 8 years, Greece is provided with 288,7 billion euros in loans from its EU partners and IMF. The last financial aid was requested by the ESM in July 2015. After three long years, the Eurogroup confirmed that all perquisites of the fourth and final review of the programme have concluded giving the green light for Greece’s exit from the financial aid package.

End of third bailout programme

During ESM’s support, Greece received 61,9 billion euros in loans on the basis of implementation of a comprehensive and unprecedented reform package. The aim of this programme was to implement structural reforms to aid Greece recover from the economic crisis. According to the European Commission, the end of the bailout programme is accomplished due to the EU solidarity and Greece’s decisiveness. More particularly, Jean-Claude Juncker, European Commission President, mentioned last Monday: “The conclusion of the stability support programme marks an important moment for Greece and Europe. While their European partners have demonstrated their solidarity, the Greek people have responded to every challenge with a characteristic courage and determination. I have always fought for Greece to remain at the heart of Europe. As the Greek people begin a new chapter in their storied history, they will always find in me an ally, a partner and a friend.”

The Chairperson of the ESM Board of Governors announced on August 20 the conclusion of ESM programme as Greece is now a self-sustaibable country with no further follow-up financial packages due to its economic growth prospects. Particularly, Mario Centeno stated: “The ultimate goal of the financial assistance plan and reforms in Greece over the past eight years has been to create a new basis for healthy and sustainable growth. It took much longer than expected but I believe we are there: Greece’s economy is growing again, there is a budget and trade surplus, and unemployment is falling steadily.” What is more, ESM Managing Director Klaus Regling outlined that Greece is the fifth country to exit such a programme but has to further invest on implementing the necessary reforms in order to continue its prosperous economic path.

A new Greek era?

The Greek Prime Minister was very optimistic in his televised speech yesterday. Mr Tsipras said that “today is a day of redemption, but it is also the start of a new era”, clearly referring to the exit of Greece from the bailout programmes which was accomplished by his government. It is quite certain that Alexis Tsipras will use it to gain back momentum after the catastrophic wildfires which have costed many lives and shown the inadequacy of the Greek government.

Furthermore, Mr Tsipras stated that “we must remember that the return to Ithaca is not the end of the adventure” showing that this bailout exit does not mean that everything is over but Greece should proceed to more reforms. Besides, the EU and EC will always be there to ensure that Greece will repay its loans to its full.

Too difficult to maintain economic growth and surpluses

This should not be a cheering moment for Greece as many challenges remain to be dealt in the decades to come. Constantine Fraser, European analyst at research firm TS Lombard, told CNBC via email that “both the EU and the Greeks will try to put a positive spin on the end of the bailout, but there is little to celebrate”. Furthermore, Ricardo Garcia, chief euro zone economist at UBS, told CNBC that there is much more to be done and structural reforms together with fiscal discipline need to stay in place.

The fact that the Greek government has to focus on a very strict programme and ensure budget surplus of at least 2,2% of GDP till 2060 the moment that its accumulated debt stands at around 180% of GDP makes things look ominous.

All in all, it is very promising that Greece managed to get out of the bailout programmes after all these years of financial support but the Greek government should not only not stay assured but also understand that there is still a long and hard way to go.

Thus, it is not time to cheer up but make sure that this will have a positive effect on Greek citizens’ everyday life.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Can We(esterners) ever understand (the) Chinese

High-technology manufacturing saves the EU industry

IMF’s Lagarde indirectly cautioned Eurozone on deflation

Italy’s Letta: A European Banking Union soon or Eurozone collapses

Importance of teaching ethics in Brazilian Medical Schools

U-turns on Global Compact ‘reflect poorly’ on countries concerned: senior UN migration official

Libyan national conference postponed, nearly 500,000 children at ‘direct risk’ from fighting around Tripoli

Hundreds of thousands of lives still lost each year to small arms, UN conference hears

Saudi woman seeking asylum in Thailand ‘now in a secure place’ says UNHCR

An ageing workforce isn’t a burden. It’s an opportunity

De Gucht: More gaffes with the talks on the EU-US free trade agreement

Climate Change: A Healthcare Emergency

Amazon: our green is turning to ashes

Why the foundations of the modern world are costing the earth

These countries are best at attracting and nurturing talented workers

US-China trade war: Washington now wants control of the renminbi-yuan

Kellen Europe Hosts EuroConference 2016

Interview with ourselves: the mental health of health professionals

The EU approves a new package of budget assistance to the Republic of Moldova to support rule of law and rural development reforms

Brazil identifies a clear pathway for aligning its transfer pricing framework with the OECD standard

These are the cities with the biggest carbon footprints

34 million Americans know someone who died after being unable to pay for medical treatment

Ireland: prepare now for rising fiscal pressures, external risks

China confirms anti-state-subsidy investigation on EU wine imports

New UN-Syrian Action Plan signals an ‘important day’ for child protection, says UN envoy

Haiti stands ‘at the crossroads’ between peacekeeping, development – Bachelet urges strengthened ‘human rights protection’

FROM THE FIELD: Faces and Voices of Conflict

Nicaragua: MEPs condemn brutal repression and demand elections

Federalist EU ‘naively’ believes Washington shares her TTIP high fever

Stricter rules and tougher sanctions for market manipulation and financial fraud

Why feeding the planet doesn’t have to mean sacrificing our forests

France pushes UK to stay and Germany to pay

Belgium: keep up reforms to increase employment and productivity growth

AI has huge potential – but it won’t solve all our problems

UN climate panel says ‘unprecedented changes’ needed to limit global warming to 1.5°C

3 defining characteristics of youth-led social innovation

European Commission adopts new list of third countries with weak anti-money laundering and terrorist financing regimes

Actions not words: what was promised at the UN’s landmark climate summit?

UN chief welcomes resolution to 27-year-old disagreement over renaming the former Yugoslav Republic of Macedonia

Car bomb attack on National Police Academy in Colombia, ‘strongly condemned’ by UN

Donor countries set international standard for preventing sexual exploitation, abuse, and harassment in development sector

This tool shows you which cities will flood as ice sheets melt

FROM THE FIELD: Faces and Voices of Conflict

European Semester Winter Package: assessing Member States’ progress on economic and social priorities

3 charts that show how attitudes to climate science vary around the world

Guterres expresses ‘grave concern’ following explosion at large political rally for reform-minded Ethiopian Prime Minister

Why the world is not as globalized as you think

ECB asks for more subsidies to banks

These Harvard scientists think we’ll have to socially distance until 2022

Security Council extends mandate of UN Interim Force in Lebanon for a year

Permanent structured cooperation (PESCO) on the table of NATO Defense Ministers amid US concerns

Visa liberalisation: Commission reports on fulfilment of visa-free requirements by Western Balkans and Eastern Partnership countries

Brazil must immediately end threats to independence and capacity of law enforcement to fight corruption

We spend half our time at work in meetings – and that’s not necessarily a bad thing

As Alan Turing makes the £50 note, how do countries design their currencies?

How cocoa farming can help stop deforestation

Brexit mission impossible: Theresa May was so desperate that had to appoint Boris Johnson as Foreign Secretary

These forms of exercise are best for your mental health

Sudan: Health challenges in the Sustainable Development Goals era

‘Critical’ window of opportunity closing fast in Iraq, Security Council hears

More Stings?

Advertising

Trackbacks

  1. […] European Stability Mechanism (ESM) provided the bailout worth  €61.9 billion for three years as an effort to help the Athens administration reform the economy and recapitalize […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s