- Despite the glowing comments from government officials and those who follow them, the Greek economy has not recovered significantly
On April 23, 2010, Greece became the first EU member state to seek financial assistance from the International Monetary Fund (IMF), with George Papandreou putting the Greek people in one of the biggesta economic experiments in post-war Europe.
So, led the country to conclude an 80 billion euro loan facility agreement on May 8, 2010, an agreement that aimed to provide a sustainable solution to the financial crisis and restore economic recovery in Greece.
Instead, the Greek GDP decreased by more than 30% in just 5 yearsa contraction which it is only seen in states that are in war zones.
The shock treatment of austerity did not bring the promised results, with the IMF itself indirectly admitting in a report in 2012, the failure of harsh measures.
However, this shock treatment was continued by both the IMF and the official European creditors in the following years. The Greek people saved the Greek (and foreign, indirectly in the first Memorandum) banks three times and not only, mortgaging the future of the country’s young people.
Speaking of which financial monstrosity 14 years laterin the end what did the crisis teach us and what were the results of these unprecedented harsh measures?
The consequences were multifaceted: Economic, Social, Political.
Economic consequences
Even S&P’s derogatory report in the recent outlook upgrade for Greece states that the economy is 22% smaller in terms of GDP compared to 2010. Of course, the American rating agency interprets this as something positive, because it gives “space” to the economy to cover the gap.
So, after sacrifices and measures exceeding €100 billion (!) from 2010 to 2019, the economy is still lagging behind, even at a time when inflation is high “supporting” the GDP-debt equation .
That said, according to World Bank aggregates, the public debt to GDP ratio was 136.6% in 2010. At the end of 2023, according to ELSTAT, this percentage reached 161.9%. S&P’s forecasts call for a further fall in the public debt ratio, amid inflation, to 150% by the end of this year.
Even in the most optimistic scenario, the Greek economy remains over-indebted.
But if we talk in real terms, according to UBS (December 2023), our country has to face a mountain of public and private debt of 657 billion euros, which amounts to 305.8% of GDP. Of this, 64% concerns government debt (422 billion euros), while the rest is private debt.
Debt is one piece. A second burning issue is the selling off the country’s basic infrastructure.
Admittedly, the Greek State is not the most productive it has ever been, however important companies were sold after brutal intervention by creditors (!) against a lentil board. This is what some call a “debt colony”.
As a result, Greece will always be dependent on corporate interests from now on.
And guess who will foot the bill: the citizens.
Social consequences
Greek society was fragmented.
We could talk about the Gini index that shows increase in economic inequality, but even more important was the erosion it suffered.
People were exterminated at work without retaliation, people committed suicide because of the injustice, people left permanently abroad.
The economic system, supported by the political system, destroyed society.
In fact, we are still experiencing the consequences today, magnified by the pandemic and the disillusioned West.
Political implications
What the great powers have achieved by exploiting geostrategic games in the past, they have achieved again but this time through debt slavery: they entered the political scene of the country for good and moved the threads again in their interest, they waved their finger and the “allies” shamed and blackmailed an entire country.
So, after 14 years, what have we learned?
We don’t want to be pessimistic of coursewe want the country to open wings both economically, socially and politically.
However, the fairy tale of the “new era” and “Greece 2.0” in the Greek economy insults the intelligence of the citizens.
Now, even after all that the people have been through these years, the economy meets the right conditions to collapse.
And the reason is simple: this harsh neoliberal model does not suit countries like Greece.
Source: www.bankingnews.gr
B
