General

On the 20th, the European Commission canceled the strengthened supervision system implemented on Greece. This marks the end of a crisis that once endangered the euro. However, the road to fiscal consolidation remains long for Greece.

According to French media reports, Greek conservative Prime Minister Kyriakos Mitsotakis emphasized in a statement to the nation that "a new future of growth, unity and prosperity is coming to all."

However, the Greeks were not in the mood to celebrate. Just two days ago, Finance Minister Christos Staculas said: "This does not mean that we can do whatever we want. It just means that we will follow the same rules as other European countries, and so far, We have to abide by far stricter rules than other countries. But this lifting of fiscal oversight is an acknowledgement of the enormous sacrifices made by Greek society."

Under the rescue plan, the Greeks "tighten their belts"

This financial oversight started in 2010. Then-Greek Prime Minister George Papandreou realized that the treasury was empty, and in order to avoid bankruptcy, he had to urgently ask the International Monetary Fund (IMF) for help. This is the beginning of the nightmare. Greece's creditors at the time - the IMF, the European Union and the European Central Bank - offered Greece three bailouts totaling 289 billion euros. As a condition, Greece had to implement fiscal austerity: freezing civil servant recruitment, lowering wages and pensions, and cutting health care and education. Budget.

Unemployment rose to 30% at one point, and the proportion of the population living below the poverty line also rose. Taxes were increased by 52%, and many public assets were privatized to reduce huge debts. Greek anger has led to the neo-Nazi party "Golden Dawn" in parliament until 2019.

Greek economy remains fragile

Today, the country has recovered somewhat, but the economy remains fragile. Inflation and unemployment are at 12%, gas prices are up 174%, electricity prices are up 57% and rents are up 31%. To make matters worse, debt, which was 177% of GDP at the start of the crisis, has now risen to 189%.

So, for Kostas Melas, a professor of economics at the Pantheon University of Athens, this withdrawal from the regulatory program is “just a date on the calendar, nothing else.” "We are still creating deficits, and from 2023, Greece's budget surplus is expected to be 2.1 percent or more until 2060. We are still a long way from that goal," he said.

Is a new crisis about to break out?

In addition, the country has until October to make reforms to ensure that 750 million euros of government bond proceeds are paid. So while the Greek economy has improved, Greeks feel that a new crisis is brewing.

According to the rating agency, Greece's economic growth will reach 4 percent by 2022, almost double the rate of the European Union. However, despite the unusually hot tourist season, that figure may have to be revised down "as consumption is expected to decline in September," according to Melas. That's why the Greeks are not in the mood to celebrate.