Greece Almost from Financial Infusion, How does the Country Stand for It?. It is almost ten years since the financial crisis that hit the United States and Europe in particular spread to Greece.
The country has been experiencing economic turmoil and significant reforms for almost ten years, which have been disastrous for the economy.
But in June a critical chapter seems to have been concluded for the southern European country.
The European ministers of finance were able to agree with the progress made by the Greek government, and on 20 August the country is going out of the third support program.
A proper farewell present accompanied the agreement. The country will receive a reserve of 15 billion euros from Europe and Greece will not have to pay back existing debt until later.
Also, must all ensure that the country finally stands on its own feet, but not everyone is positive about the situation in Greece.
It seems slow to get better with the Greek economy. For example, organic growth has recorded since the beginning of last year, and in the first quarter of 2018,
the Greek economy grew by 2.3 percent, the highest growth rate in ten years.
And more and more young people are getting a job. At the height of the youth unemployment rose to no less than 60 percent, one of the highest figures in the world,
and many young people who managed to get a job had to agree with miserable conditions. But now the figure fluctuates around 40 percent.
Most important is the relative political calm. Where in early 2015 a ‘Grexit’ threatened due to the unwillingness of the newly appointed Greek leader Alexis Tsipras to meet European requirements,
also implemented the agreed reforms in a relatively calm way in recent years.
But this does not mean that the economic boom in large part of the world has also reached Greece. Laurens Hartman, the Dutch winemaker in Greece, sees that the financial problems are still enormous in Greece.
He also does not see the expiry of the third program as the end of European support and interference in the Greek economy.
“It is a promotional story that Greece would end with the support program, and it is a promotional show that does not match reality.”
Greece gets a reserve of several billion so that the Greek government is still liquid, but there are conditions ascribed.
“So that’s just a program, that’s the fourth program”, concludes Hartman. “I’m not saying it’s bad, but it’s not that Greece is on its own feet, something has not suddenly changed.”
According to ING economist Paolo Pizzoli, the current agreement is formally an end of the debt program, but Greek policy remains under the magnifying glass of Europe.
In this way, European creditors also ensure that Greece does not suddenly reverse all reforms. Whether Greece can meet all the agreed requirements is the question.
For example, the Greeks want to keep the budget surplus at 3.5 percent of GDP by 2022. From 2023 to no less than 2060, the budget surplus must be 2.2 per cent of GDP.
According to Pizzoli, these goals are feasible in the short term, but the question is how the Greeks will fare when the economy starts shrinking again.
According to the economist, the current agreements do not offer a final solution to the Greek debt problem, but the Greek government can now start creating a solid financial base.
Whether this will give the Greek economy a boost is still the question. The economy comes from far after almost ten years of economic contraction.
According to Pizzoli, economic growth depends on the extent to which the Greek government can, for example, create the right conditions for foreign investors.
Good news show
The malaise in the southern European country is far from over, says Hartman. Because of the sharp cutbacks by the Greek government and the severe economic downturn, wages are low, and the Greeks have little to spend.
For example, even people with jobs sometimes have to manage only a few hundred euros per month, while prices are not lower than in Western Europe, says Hartman.
“While the tomatoes also cost 1.50, the milk costs 1.40 and the bread costs 1.30, that’s no different, but you have to do that with 500 euros per month.
Good news show that you see with the international media is not to be seen by the population. “
As a result, the middle class has almost wholly gone, says the entrepreneur.
“Everything is empty, the shops are closed, it’s just a dead situation, the terraces are full, but because people do not have a job, they do all day with one coffee of 1.10.”
Also, incentives to do business are also lacking, he says. Even if no turnover is made.