15 November 2018
Komorebipost
Europe World News

Greece – Outside EU’s aid program

Greece, Athens, the program helps, rescue, tears and blood. In this way, we could define the undaunted odyssey suffered by the last country out of the international aid plan, after Portugal, Ireland, Spain and Cyprus.
In 2015, Greece and its European creditors agreed to pay 86 billion euros under the European Stability Mechanism. Following a financial meltdown in 2010, international creditors, including the International Monetary Fund, provided a total of € 289 billion of credit.

For the first time since 2010, Greece stands on its own feet“, commented Mario Centeno, chairman of the governing board of European Stability Mechanism, who led the last international aid program (the first in 2010, in 2012 and finally in 2015). According to Centeno, also Minister of Finance of Portugal and president of Eurogroup, it is the result “of the extraordinary efforts of the Greek people, of the good cooperation with the current government of Athens and the efforts of the European partners“.

In the three successive aid programs – in 2010, 2012 and finally in 2015 – the international creditors of the so-called Troika, composed by EU, ECB and IMF, have lent a total of EUR 289 billion to Athens in exchange for reforms that some of the same creditors now recognize have been not entirely optimal, given that Greece has lost a quarter of its GDP in eight years, pushing unemployment to 27.5% in 2013. Now, Centeno continues, “Greece’s economy has resumed growth (with GDP rising 1.4% in 2017) there is a budget surplus (…) and unemployment is steadily decreasing“, while remaining at the level of 20%. “The time of austerity is over, but the end of the program is not the end of the road for these reforms” warned EU Commissioner for Economic Affairs Pierre Moscovici. Opinion also shared by the governor of the Bank of Greece Yannis Stournaras. “Greece still has a long way to go” said Kathimerini.

Even Ital involved in Greece’s crisis

Italy has been involved in Greece’s crisis and not only as a lender, in proportion to the other Eurozone countries, of the rescue plans of Athens. According to many indications, the harshness towards Greece of Germany and its Northern and Eastern European allies was motivated by the fact that it was sending a message to Rome and other countries on the “penalties” that would await them in the event that the debt became unsustainable and required the intervention of the Troika. Moreover, the Greece’s crisis has put the holding of euro under tension, prompting of Mario Draghi‘s ECB to intervene with various programs challenged by Bundesbank to do “whateves it takes” in saving the single currency, effectively supporting the weaker economies of ‘Eurozone.

Now that Greece will come out of the international spotlight, at least for a while, the real risk is that the investor’s lighthouse will focus on our country. In particular, the disquieting prospect that rates are required by investors to buy bonds the “sick of Europe” is not to be excluded. Since last spring, the spread between Italian and Greek bond yields has already been worryingly reduced. Much will depend on the rating agencies, in relation to the laws of the Italian government on the budget law.

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Eleonora Boccuni

Eleonora Boccuni

"Sound information is the cradle of knowledge and is directly proportional to the interest felt for knowledge."

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