As Greece pays the last of over $70.8 billion in loans on Monday, it will exit what is being called the largest financial bailout in history, and be given greater control of its economy for the first time since 2010, according to the BBC.
Now the country will be able to borrow from financial markets at standard rates, whereas before it was barred from participating in these markets until it had paid off emergency loans from the European Union that carried burdensome contingencies, Reuters reports.
This new phase has elicited modest hopes that the economy will begin to grow at a faster pace, improving standards of living throughout the country, according to the New York Times.
But many economists and everyday citizens alike are not exactly celebrating the news.
Today, more than one-fifth of the the population is unable to afford essential expenses like rent and electricity, and unemployment remains at 19.5%, the highest rate in Europe.
More than half of the country’s elderly have been pushed into poverty because of the crisis, and the only reason why more people aren’t homeless is because Greece has a law that prevents banks from seizing a person’s primary residence.
Only four countries have suffered as much economically since the financial crisis, according to the International Monetary Fund — Yemen, Libya, Venezuela, and Equatorial Guinea.
Greece exited its third and final bailout program. The country’s 8-year financial crisis shrank the economy by 25% and left:— AJ+ (@ajplus) August 20, 2018
▪️ 1/3 of people in poverty
▪️ 1/5 of people unemployed
▪️ 1/5 of people unable to pay basic expenses like rent pic.twitter.com/Xu3Os3XcWs
“I made much more money in my 30s than now,” Costas Papaconstantinou, a 54-year-old waiter in Athens told Reuters. “Were it not for tourism, we would be finished.”
“There is no bailout exit, we will be under a bailout until 2060, until we pay off these loans,” he added.
A pensioner echoed these financial concerns and the psychological toll they take to Reuters.
“I wake up in the morning to a nightmare,” Yorgos Vagelakos, an 81-year-old retired factory worker, told Reuters. “How will I manage my finances and my responsibilities? This is what I wake up to every morning.”
Greece still owes hundreds of billions of dollars that will take decades to pay off and the country will be forced to generate an annual budget surplus of 3.5% through 2022, and 2.2% through 2060, to pay off the loans. Greece also remains hobbled by stringent austerity measures imposed by European Union creditors, and its economy is 25% smaller than it was before the financial crisis began, the BBC reports.
An “austerity” program seeks to keep government deficits from rising by enacting deep budget cuts. Economists have consistently shown that austerity is not an effective means of lifting a country out of a financial crisis and that it hampers both short- and long-term economic growth.
The austerity program imposed on Greece by the EU was especially harsh. It involved deep cuts to pensions, hundreds of thousands of government workers being laid off, public utilities being sold off at steep discounts, and much more.
“2010 to 2018 will go down in Greek history as an epic period of colonization; of asset-stripping and privatization; of unfunded health and education; of bankruptcies, foreclosures, homelessness, impoverishment; of unemployment, emigration, and suicide,” James K. Galbraith, an economist and adviser to the former Greek finance minister, wrote in the Atlantic.