Greece – A Year after the Crises


Financial Crisis in Greece affected everyone in this country, from small local businessman to the biggest Greek corporation. And after receiving two financial rescues, a year after the crisis the country was given its third rescue of the €86bn form of international funding. As a result, Greece’s government has been forced to introduce spending within the period of its three separate bailout programs, which significantly made life harder for common people in Greece. These cuts have equally influenced people of all ages with the increasing rise of unemployment, VAT increase and reforms in the pension system, as well as loan repayments, property taxes and energy bills. These draconian conditions are leaving a mark on middle-class society.

According to some sources, almost half a million Greeks have migrated since the beginning of the crisis. Further, the country received bailout loans of €326bn since May 2010, which makes it the biggest rescue program ever in financial history on a global scale.

The World Bank compared the period of the recession with those already seen in eastern European countries in the early 1990’s. For instance, the 20% poorest Greeks have suffered a 42% drop in disposable income since 2009.

Extreme poverty had risen from 2.2 percent in 2009, to 15 percent in 2015, the public opinion survey of 1,300 people showed, with 1.6 million people now living below in extreme poverty.

However, this situation in Greece was in many ways neglected after several other crises that hit the Europe. It was quickly put aside when refugees from the Middle East appeared on European ground when the new terrorist attacks occurred and also when Britain announced the Brexit.

Despite crisis being declared over, Greece continues to fall. However, at this point, the loss and sacrifice for Greeks have almost been normalised. For instance, Greece reported a 0.3 percent increase in GDP in the second quarter, while the expectations for a contraction were 0.2 percent. Nevertheless, on a yearly basis, the Greek economy is still contracting. Their major fear now is that they could be out of the euro zone. As a result, they imposed gradual relaxation of capital controls which has helped strengthen the sense of the economy´s path to stability. The global lack of interest in Greek situation is present. euro zone finance ministers gave €10.3bn in emergency loans and made a promise of debt relief once the current programme completes in 2018, on one condition – and that means more unpopular reforms from Athens. The growth of 2.5% is predicted for the next year.

However, few believe that situation will get better before it gets worse. Alexis Tsipras who was once popular left-wing Prime Minister became a subject of hatred in the country after he promised to eradicate austerity. Tsipras’ hesitated over a third bailout and as a result, made the situation worse since lenders imposed heavier reform as well as spending cut demands on Greece.

However, with anti–EU sentiment on the rise, the Greeks continue to cope with the situation. 70% of them believed that it was necessary to stay in the single currency according to the data from October 2015. However, nine months later the number of those backing the euro had fallen to 50%. One way or the other, real Greek crisis recovery is only possible if its massive debt burden is reduced. The International Monetary Fund believes that without debt relief interest payments will account for 60% of the budget by 2060.

Even though the most of the people agree that the third bailout changes nothing in particular, except continues the agony of the middle class, there is nothing that it could be done against it. EU continues to increase the burden of debt on Greeks back, while the common people struggles to meet ends with their existing income. Greek is Europe’s weakest link, and it will continue to be since the new reforms can only be imposed with further loans.

The people of Greece lost all hope for ever seeing a better day for themselves, their children and grandchildren. George Papaconstantinou, the former Minister of Finance and the author of the book Game Over which presents all the details of crisis timeline claims that Greece needs large-scale foreign investment to kickstart growth which is impossible because of government´s hostility to both domestic and foreign investors.

Furthermore, Papaconstantinou believes that the situation with the last bailout could be avoided since it is unnecessary comparing to the first two bailouts. The biggest problem, he says, is Syriza´s incompetence during the first six months in power.

Even though tourists from all over the world continue to visit Greece on a daily basis, Greeks are still making demonstrations against the government. They are trying to get by with all the problems they experience, while Europe and the world are watching with their hands crossed.