This is the end of a painful period for Greece that has led to economic stagnation and division in society, Prime Minister Kyriakos Mitsotakis said in Athens. He has now promised his countrymen a new beginning “full of growth, unity and prosperity”. The EU Commission also commended the efforts of the Greek people and their governments.
289 billion euros in loans
During the financial and debt crisis, euro partners and the International Monetary Fund (IMF) have saved Greece from national bankruptcy several times since 2010, with loans totaling almost €289 billion. The third loan program for the highly indebted country ended in August 2018. Greece left the European Stability Mechanism (ESM) but remained under close surveillance.
drastic effects
The debt crisis and stringent austerity measures imposed by international creditors resulted in drastic losses for many Greeks. The conditions for the bailout loans were massive cuts in pensions and wages, the monthly minimum wage dropped to less than 600 euros at the time. There were also tax increases and privatizations. The Greek economy has shrunk by more than 25%, unemployment has risen to nearly 28% and skilled workers have left the country in droves. August 20, 2022 is a “historic day for Greece and all Greeks,” Mitsotakis said on state TV.
In addition to the finance ministers of the euro countries, the commissioner responsible for EU Economic Affairs, Paolo Gentiloni, had approved the release of the Board of Trustees from 20 August in recent days. Gentiloni therefore declared that the end of financial supervision in Greece was also “the symbolic conclusion of the most difficult moment the eurozone has ever experienced”.
“Other Greece”
“The Greece of today is a different Greece,” said Mitsotakis. Greece has recently recorded strong economic growth and a significant drop in unemployment. Gentiloni said the strong joint response to the corona pandemic showed “that Europe has learned the lessons of this crisis”. Solidarity and unity are also important in the current economic crisis.
The EU Commission also commended the efforts of the Greek people and their governments. “Greece ends today a difficult chapter in its long and proud history,” said Gentiloni. Greece’s achievements are all the more commendable because they were shaped by two severe external shocks, the corona pandemic and Russia’s invasion of Ukraine. Eurogroup President Paschal Donohoe stressed on the short message service Twitter that the end of controls was “a great achievement for the Greek government and the Greek people”.
Mitsotakis stressed that even without the controls, the mistakes that led to the severe financial crisis in Greece in recent years must not be repeated. There will be salary increases and tax cuts, but that shouldn’t detract from efforts to balance finances.
Greece experienced a severe financial crisis from 2010 onwards and, as a result, had to implement harsh austerity measures under pressure from its creditors. The Greeks lost about 25% of their income in the process. As of 2018, Athens is financially on its own.