Greece has emerged from a three-year stability support programme, its third since the 2008 financial crisis, with a reduction in unemployment and a return to growth for the country’s economy.
The European Stability Mechanism (ESM) has previously provided financial support to Greece in 2010 and 2012, with a final three-year stability support programme agreed by European authorities on the ESM’s behalf in August 2015. In total, some €288.7bn in loans has been provided to Greece, including €256.6bn from the EU and €32.1bn from the International Monetary Fund.
These loans were provided on the condition that Greece undertake an unprecedented and comprehensive reform package, which sought to tackle what the EU called ‘long-standing and deep-rooted structural issues’, which led to the country experiencing an economic crisis in the first place.
What progress has Greece made under the ESM’s stability support programme?
The three-year stability support programme agreed in 2015 provided a total of €61.9bn in exchange for Greece taking measures to ensure its fiscal sustainability, which resulted in the government’s balance from a significant deficit of 15.1% to a surplus of 0.8% in 2017. Economic growth, meanwhile, rebounded from -5.5% in 2010 to 1.4% in 2017, which is expected to remain stable at around 2% for 2018 and 2019.
While unemployment remains very high at 19.5% (as of May 2018), this still represents an improvement; in fact, this is the first time it reached a level below 20% since September 2011. The EU acknowledges that there is still work to be done, although the foundations that will support a sustainable recovery have now been secured.
How have EU authorities responded to the conclusion of the bailout programme?
European Commissioner for Economic and Financial Affairs, Pierre Moscovici, welcomed the end of the stability support programme as good news for both Greece and the euro area as a whole, and suggested that it served as a prime example of the economic solidarity of EU member states.
He said: “For Greece and its people, it marks the beginning of a new chapter after eight particularly difficult years. For the euro area, it draws a symbolic line under an existential crisis. The extensive reforms Greece has carried out have laid the ground for a sustainable recovery: this must be nurtured and maintained to enable the Greek people to reap the benefits of their efforts and sacrifices. Europe will continue to stand by Greece’s side.”