Thursday

27th Jul 2017

Analysis

Greece in search of dignity, as crisis subsides

After more than four years of international humiliation as the result of an economic crisis that has piled innumerable indignities on its people, Greece is keen to restore some national pride.

"Our common quest" is the grandiose motto of the Greek government's six-month EU presidency, which began last week in Athens with a succession of ministers lining up to tell foreign reporters that the country has turned the corner in both economic and political terms.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

  • Greece heading back towards normality says prime minister Samaras

The Greek economy will emerge from six years of recession in 2014, they say, and record a primary budget surplus of 1.6 percent of GDP in the process.

Falling spreads on Greek government bonds has given ministers hope that Greece's treasury will hold its first bond issue since 2010 in the second half of 2014.

"We want to get back to the market and show we are a normal country again," Prime Minister Antonis Samaras told reporters in Athens on Friday (10 January).

But although the Greek government will want its presidency to be marked by legislative achievements - such as sealing a deal on the final tranche of EU banking union legislation - its economic difficulties will not disappear from view.

The country needs to find an estimated €11 billion to pay its bills through 2014. Samaras claims that under the bailout deal struck with its creditors - the Troika - in the small hours of 12 November 2012, the costs of its debt burden will be eased as soon as it delivers a primary budget surplus.

"When the data arrives from Eurostat we will try to reach a decision on reducing the interest rate and maturity of the bailout loans," he says.

What the response from the rest of the eurozone will be is less clear, particularly if Greece attempts to begin the conversation before the European elections in May, potentially provoking a public backlash in creditor countries such as Germany, Finland and the Netherlands.

In any case, it is difficult to see what changes can be made to the interest Greece pays on its debts.

Greece now pays an average rate of around 3 percent on its €240 billion of bailout loans, a rate which is not much higher than cost. One option is to extend the maturity of the loans just as the eurozone did for Ireland and Portugal last year.

This could see the repayment of Greece's loans - most of which are due in between 15 and 30 years - extended to 50 years or even longer.

Samaras also says that the agreement means that for every percentile of surplus over and above Greece's annual target, 70 percent will be redistributed back into the Greek economy and earmarked for the unemployed and pensioners who have been the worst affected by the crisis.

One thing for sure is that Samaras' government is tired of glib assertions about Greek fecklessness and wants the rest of Europe to appreciate the huge price its people have paid.

"We want to make sure that our sacrifices are recognised," the Prime Minister told reporters, adding that the average Greek's disposable income has fallen by over 35 percent - a huge drop in living standards.

Neither have the cuts been particularly effective. For every euro of cuts, the Greek budget deficit only fell by 40 cents.

Culture minister Panos Panagiotopoulos is among a number of ministers to underline that austerity has reached its limit.

Ordinary Greeks "cannot take any more sacrifices" he says.

For his part, Kyriakos Mitsotakis, the minister tasked with slimming down Greece's bureaucracy, believes that the requirement to trim 15,000 more public sector jobs as part of the latest Troika review will mark the end to big staff cuts.

The Greek civil service has been cut from 900,000 to 600,000 in four years. 100,000 of which have been lost due to an attrition rule that means only one in five retiring or sacked officials are replaced, while big savings have been made from cutting the use of temporary contracts which had been abused by successive governments.

"We are leaving behind a system of political patronage which left Greece with an administration that was far larger than it should have been," says Mitsotakis, adding that a new bill on human resource management will tighten the rules for hiring and firing officials.

Despite having a parliamentary majority of just two seats and a junior coalition partner that is on course to be wiped out when Greek voters next go to the polls, ministers insist that the government is stable.

Samaras states that there will be no national elections until at least the Greek presidential elections in 2015 and believes that there is little appetite among voters for another poll.

Below the optimistic surface, however, Greece's domestic politics remains uncertain and often ugly.

In September, left-wing hip hop musician Pavlos Fyssas was murdered by a Golden Dawn supporter, sparking a government crackdown on the party involving the arrest of more than 20 of its senior members, including a handful of its 18 MPs.

But despite its leader and deputy leader being amongst Golden Dawn officials facing charges ranging from being part of criminal gangs and money-laundering to assault and murder, the popularity of the neo-Nazi group remains undimmed.

They are currently polling at 11 percent according to recent surveys, enough to leave them in third place and almost certain to win MEP seats in May's European elections.

With his conservative New Democracy party anxious not to lose the support of right-wing nationalists, Samaras has trained most of his ire on Syriza, the leftist party which burst onto the scene by finishing a strong second in the 2012 Greek elections, and currently tops the opinion polls.

Samaras says that Alexis Tsipras' party takes a "schizophrenic" approach to politics by sounding pro-EU to foreigners and eurosceptic to Greeks.

He and New Democracy officials also complain that Syriza has taken a blind eye to violence by left-wing activists and anarchists.

For all the talk of stability and recovery, it would not take much of a setback, be it economic or political, to put the heat back on the Samaras government.

A panic-free and low key presidency is the best that Samaras and his crisis-weary ministers can hope for.

Analysis

Visegrad lobby makes food quality an EU issue

Fico convinced the EU commission chief to take action in the perceived problem of discriminatory food practices, even though the evidence for the phenomenon is anecdotal.

News in Brief

  1. Werner Hoyer re-appointed as EU investment bank chief
  2. Spanish PM denies knowledge of party corruption
  3. France 'routinely' abuses migrants, says NGO
  4. Swedish government rocked by data scandal
  5. Member states relocate 3,000 migrants in June
  6. Top EU jurist says Malta's finch-trapping against EU law
  7. EU judges rule to keep Hamas funds frozen
  8. EU court rejects passenger data deal with Canada

Stakeholders' Highlights

  1. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  2. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  3. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  4. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  5. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  6. ACCAAnnounces Belt & Road Research at Shanghai Conference
  7. ECPAFood waste in the field can double without crop protection. #WithOrWithout #pesticides
  8. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  9. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey
  10. Martens CentreWeeding out Fake News: An Approach to Social Media Regulation
  11. European Jewish CongressEJC Concerned by Normalisation of Antisemitic Tropes in Hungary
  12. Counter BalanceOut for Summer Ep. 1: How the EIB Sweeps a Development Fiasco Under the Rug

Latest News

  1. Corbyn re-opens Labour's single market wound
  2. Visegrad lobby makes food quality an EU issue
  3. EU court could dismiss national borders in cyberspace
  4. Confusion swirls around Macron's Libya 'hotspots'
  5. Insults fly after EU ultimatum to Poland
  6. UK requests EU migration study, 13 months after Brexit vote
  7. EU defends airline data-sharing after court ruling
  8. Stop blaming Trump for Poland’s democratic crisis

Stakeholders' Highlights

  1. CESICESI to Participate in Sectoral Social Dialogue Committee on Postal Services
  2. ILGA-EuropeMalta Keeps on Rocking: Marriage Equality on Its Way
  3. European Friends of ArmeniaEuFoA Director and MEPs Comment on the Recent Conflict Escalation in Nagorno-Karabakh
  4. EU2017EEEstonian Presidency Kicks off Youth Programme With Coding Summer School
  5. EPSUEP Support for Corporate Tax Transparency Principle Unlikely to Pass Reality Check
  6. Counter BalanceEuropean Parliament Improves the External Investment Plan but Significant Challenges Ahead
  7. EU2017EEPM Ratas: EU Is Not Only an Idea for the 500mn People in the Bloc, It Is Their Daily Reality
  8. Nordic Council of MinistersCloser Energy Co-Operation Keeps Nordic Region on Top in Green Energy
  9. ILGA-EuropeGermany Finally Says Ja - Bundestag Votes for Marriage Equality!
  10. EPSUJapanese and European Public Sector Unions Slam JEFTA
  11. World VisionEU, Young Leaders and Civil Society Join Forces to End Violence Against Girls
  12. UNICEFNarrowing the Gaps: The Power of Investing in the Health of the Poorest Children