Sunday

18th Nov 2018

Greece 'normal' again after end of crisis, EU says

  • Commissioner Moscovici said Greece can expect no new measures from Brussels (Photo: European Commission)

EU economic affairs commissioner Pierre Moscovici said on Monday (20 August) that Greece will once again be treated as a "normal country" after over eight years of international aid and austerity measures.

Moscovici made his comments on the day that Greece officially exited the last of its three EU bailouts.

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The commissioner said the EU lenders will no longer impose "any kind of measure or decision", adding that Greece is now free to define its own economic policy within eurozone structures.

"This is significantly different," he said.

"From now on, Greece will be treated like any other euro-area country. It will become subject to the same procedures as all EU member states for economic policy," the French socialist commissioner said, adding that that process will start in October when eurozone countries must to submit a draft budget plan to the commission.

The commission does not aim to give Greece an entirely free hand, however.

Under a so-called enhanced surveillance framework, EU officials will travel to Greece on the week of 10 September to check on developments. Four such visits will be made annually.

"Commitments taken need to be respected - that's what we care about," Moscovici said, while adding that the surveillance missions will not introduce any new demands.

"There is no troika anymore. I don't want 'men in blue' to follow 'men in black'," Moscovici said, referring to a popular nickname for EU officials who used to oversee the bailout process.

Task ahead

Following the bailout schemes in 2010, 2012, and 2015, totalling €289bn and financed by European partners and the International Monetary Fund (IMF), Greece has been left with the highest public debt level in the EU - over 180 percent.

Over the last 10 years, Greece's GDP also went down by 24.2 percent.

Unemployment is around 27 percent, while Greece is committed to reaching a primary budget surplus - a positive budget balance - of 3.5 percent by 2022.

It will also have to keep it at 2.2 percent until 2060 to pay back debt - a massive task for a weakened economy.

For the other 18 countries of the eurozone, the average surplus is expected to be 1.2 percent of GDP in 2018 and 1.1 percent in 2019.

Moscovici said he was "conscious that all those [Greek] people may not feel that their situation has yet improved much, if at all."

But the commissioner said he was confident the eurogroup's decision to implement a series of "robust, short and medium-term debt measures will meaningfully lighten Greece's burden and secure its sustainability."

He spoke following discord between the IMF and eurozone countries over potential Greek debt relief.

Moscovici also said Greece's economic structures had been modernised and should be capable of helping create jobs and attract investments.

He added that other eurozone countries have learned from the Greek crisis, and said that all eurozone members had, for the first time ever, brought their budgets to under 3 percent of GDP, the legal threshold in the EU. Just two years ago, the average was 6 percent.

"That is proof we have sounder public finances," he said. 


Greece has emerged from the biggest bailout in economic history, but in Athens, few feel like celebrating.

The almost decade-long crisis and credit measures which, in the end, kept the eurozone intact, have raised serious questions about how deeply international organisations can dictate policy to a sovereign country.

The lenders' austerity measures touched on almost all areas of Greek public policy.

"Nothing changes for us," Christos Iosifidis, an 80-year old Greek pensioner told Reuters. "We are a bankrupt country, and that won't change for many more years," he said.

Greece's former finance minister Yanis Varoufakis told German tabloid Bild that Greece should have been allowed to go bankrupt.

"As for the Greek banks and state, they should not have been saved - we should have been allowed to go bankrupt, suffer the consequences, but then be allowed to pick ourselves up and move on," he argued.

The bellicose Varoufakis, who has harshly criticised creditors in the past, said Greece was in the "same black hole" as it was a decade ago and that it keeps on sinking.

Greek prime minister Alexis Tsipras is expected to make a speech on Tuesday to mark Greece regaining its fiscal sovereignty.

Analysis

Greece exits bailouts, but difficult path ahead

"Greece's recovery is not an event, it is a process," EU commissioner Pierre Moscovici says. Statistics, and differences of views between the country's creditors, show that the process will not be easy.

Greece and creditors proclaim 'end of crisis'

After late-night talks, the Eurogroup agreed on a €15bn disbursement and debt relief measures for Greece, while setting out a tight monitoring when the bailout ends in August.

Analysis

Greece facing post-bailout challenges

Creditors are expected to agree Thursday on a final loan and debt relief measures for Greece. After eight years on an international lifeline, the country will remain under close surveillance - but will have to find a new economic model.

Greece and creditors prepare bailout exit

Greece's creditors agreed to unblock €6.7 billion of new aid by April and to open debt-relief talks, ahead of the end of the programme in August.

Greek austerity violated right to health, says watchdog

Cuts in the Greek health care system, following the austerity cuts demanded in return for international bailouts, have violated the European Social Charter on the right to health, says Council of Europe's human rights commissioner, Dunja Mijatovic.

Agenda

Turkey and money dominate this week

MEPs in Strasbourg this week will vote on a law to cut carbon dioxide emissions for new cars and punish Turkey for its rule-of-law crackdown. Meanwhile, ministers in Luxembourg will be discussing euro-area reforms.

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