Greece on Saturday ended 12 years of fiscal surveillance by the European Union imposed in exchange for bailouts following a crushing debt crisis.
In November 2009, Athens revealed a sharp increase in its public deficit, which eventually led to a eurozone-wide financial crisis and devastated Greek finances for a decade.
In exchange for €289 billion in bailout funds and to prevent Greece from falling out of the eurozone, a “troika” made up of the International Monetary Fund, the EU and the European Central Bank called on Athens to implement sweeping reforms.
These included deep government spending and wage cuts, tax hikes, privatizations, and other sweeping reforms aimed at putting public finances in order.
The economy shrank by more than a quarter, unemployment rose to almost 28 percent and skilled workers left in droves.
“A 12-year cycle that brought pain to citizens, led to economic stagnation and a divided society” has come to an end, Prime Minister Kyriakos Mitsotakis said.
“A new horizon of growth, unity and prosperity is emerging for all,” he said. “Today’s Greece is a different Greece.
“We’re seeing strong growth and a significant drop in unemployment, down 3 percent since last year and 5 percent since 2019,” he added.
The end of supervision will strengthen Greece’s international market position by increasing its attractiveness to investors. Athens will also now have more control over its domestic economic policies.
“The end of the enhanced surveillance of Greece also marks the symbolic conclusion of the most difficult period the eurozone has experienced,” said Paolo Gentiloni, EU Commissioner for the Economy, in a statement.
“The sovereign debt crisis that characterized the early years of the previous decade was a steep learning curve for our Union.
“Our strong collective response to the pandemic has shown that Europe has learned the lessons of this crisis. We must show the same solidarity and unity as we navigate the troubled waters our economies are now entering.”
Greece – like bailed out EU members Spain, Portugal, Cyprus and Ireland – will continue to be scrutinized by its creditors as it repays its debts.
In the case of Greece, it will take another two generations before the last loans are due for repayment in 2070.
According to forecasts by the European Commission, the Greek economy will grow by 4 percent this year, significantly faster than the eurozone average of 2.6 percent.
However, Greece’s unemployment rate is one of the highest in the currency union, the minimum wage is one of the lowest and the country’s debt is 180 percent of gross domestic product.
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