Greece is in spite of everything turning the web page on its debt disaster, with the top to the machine of Enhanced Surveillance, installed position to permit European establishments to control the federal government’s books.
When 12 years in the past Athens stated it is going to need to default on its debt, the following disaster shook the European Union to its core.
To steer clear of default, the EU and the International Monetary Fund equipped masses of billion euros in emergency investment – however this did not come without cost.
Creditors demanded Athens enforce austerity insurance policies, which in spite of everything ended in a considerable upward thrust in poverty.
The economic system reduced in size by means of greater than 1 / 4, the electorate’ disposable source of revenue by means of one-third, and unemployment charges spiked to just about 30%.
Measures had been too austere
Now, some leaders admit they had been too difficult on Greece, which in spite of everything delivered.
“The Greek citizens themselves have many, many reasons to be proud,” says the EU Commission president of the time, Jean-Claude Juncker. “Because they have suffered a lot during this awful period. Their dignity was not always respected. Measures imposed on Greek society were too austere.”
Juncker used to be chatting with Euronews’s Efi Koutsokosta within the Global Conversation. And Greece’s finance minister of the time is going additional, announcing the EU’s austerity-driven means has fuelled nowadays’s populist actions.
“I think Europe has been behind the curve,” says Euclid Tsakalotos, who used to be the remaining Greek finance minister of the bailout technology. “I think that there is a real threat to the EU still, which is this divergence in the fate of the economies between Northern Europe and Southern Europe. If you want to understand Salvini and Meloni, if you want to understand Golden Dawn, if you want to understand the rise of the new right, then the economic policies that lead to inequality, that restrict the public services, the access that people have to health and to transport and to education are part of the answer. “
Back to normality
But the present leader of the Greek economic system, Christos Staikouras, paints a extra upbeat image of the rustic’s possibilities now.
“We are back to normality for the first time since 2010,” he instructed Euronews. “This will have positive, direct and indirect effects on the Greek economy and society. We improve our access to international markets. We boost the preconditions for higher and more strong and robust economic growth in order to attract much more investments.”
Full Interviews
Efi Koutsokosta, Euronews: So Greece in spite of everything formally exited its enhanced surveillance programme after 12 years of ache and a crushing debt disaster. So, in reality, what does this imply for Greek electorate and what does this imply for the EU?
Jean-Claude Juncker, Former EU Commission President: The Greek electorate themselves have many, many causes to be proud. Because they have got suffered so much right through this terrible duration. Their dignity used to be now not at all times revered. Measures imposed on Greek society had been too austere. And so the truth that now Greece has exited now not the euro however this system is excellent news for Greece. It’s excellent information for Europe too, as it displays, independently from all of the errors that have been made, that European cohesion does exist and people who had been protecting Greece, that used to be my case, had been proper to mention no to people who sought after to exclude Greece from the only forex house.
Germany used to be now not the one nation crucial of Greece
Efi Koutsokosta: We see that even nowadays, there are some populist events round Europe which are nonetheless the usage of the instance of Greece and the way in which the EU behaved to the Greek other folks to be able to blame Brussels for all of the other folks’s issues. So what would you assert? What is actual and what’s a fable on this scenario?
Jean-Claude Juncker: The European Union used to be now not the issue, Greece used to be the issue. Because Greece for such a lot of years didn’t care about budgets, public debt and so forth. So the fault used to be with Greece. But the way in which the European Union used to be coping with Greece used to be now not one of the simplest ways imaginable. But in spite of everything, good fortune is there after such a lot of efforts, good fortune is there. So the populists are working out of arguments if they’re regarding Greece. They will have to, like I’m doing, respect the braveness of the Greek other folks and now not attempt to manipulate the effects and the tale.
Efi Koutsokosta: Back then there used to be a belief that in reality the decision-making used to be within the palms of the Germans. So is the EU an excessive amount of German-dominated?
Jean-Claude Juncker: When it involves Greece, Germany used to be now not the one nation which has been very crucial of Greece. The Dutch, the Austrians, the Slovaks, the Slovenes, the Finns and others by no means stopped attacking Greece right through the so-called Greek disaster. And Germany used to be now not the one one. And Germany used to be now not and isn’t dominating all the European Union. Sometimes the Germans locally give the influence that they’re the masters of Europe. This is obviously now not the case.
Efi Koutsokosta: When the Germans alternate their thoughts on one thing, everyone one way or the other adjustments their thoughts and we’re nearer to a pan-European resolution. This used to be the case with Greece. This is the case now.
Jean-Claude Juncker: Yes, however it is not most effective because of the truth that the Germans, in that sense, are turning into increasingly more European. It’s the case for all of the nations since the 27 nations have learnt one lesson. Only the truth that European governments are sticking in combination and are doing kind of the similar issues is one of the simplest ways for Europe to maintain crises of that sort.
Efi Koutsokosta: The EU gave some huge cash to Greece, however with painful strings hooked up. So are you able to take into account moments when the EU in reality confirmed cohesion in a tangible method?
Jean-Claude Juncker: Many moments. When Prime Minister Tsipras made up our minds to have a referendum at the programme, I needed to combat exhausting to forestall different member states from asking formally for the go out of Greece from the Euro house. Because this referendum used to be a scandal, to a big extent, since the other folks in Greece stated no, however the programme because it used to be made up our minds, used to be applied. The programme used to be precisely…
Efi Koutsokosta: …the similar? Was it the similar as the only they voted no to?
Jean-Claude Juncker: Yes. It used to be a mistake for the Greeks themselves as a result of they had been vote casting on one thing which did now not exist. It used to be needless. And it created turbulences within the monetary markets, Greece got here underneath power greater than ahead of, so I wish to fail to remember that bankruptcy.
No different economic system has suffered such a lot out of doors wartime
Euclid Tsakalotos, Former Finance Minister of Greece: When we got here into energy, there used to be now not a lot cohesion within the first six months, from January to the summer season, once we made the compromise. The unique Juncker Memorandum, which we took to a referendum, used to be totally unacceptable. It used to be punitive, it had not anything on debt. We controlled a greater compromise. And I feel when the SYRIZA executive confirmed its seriousness, that it in reality sought after to go away the Memorandum whilst doing its highest to give protection to probably the most prone, I feel slowly the Europeans realised: “Look, this is something that is achievable”. I feel they ultimately idea this is usually a win for Greece, I feel President Juncker is on report as announcing that. He staked relatively so much. He used to be now not like Wolfgang Schäuble, the German finance minister on the time who in reality I feel sought after us out. The undeniable fact that we left the programme, one thing that the former governments hadn’t controlled to do. We have this hall for debt, we’ve got had the buffer which supplies some coverage, used to be one thing that the Europeans will also be pleased with in any case, however with an enormous value. Let us now not fail to remember that. Because any economic system that loses 26% of the GDP, which came about within the first and 2d Memorandum… 26% of GDP! I do not know whether or not the folks being attentive to us relatively know how large a host 26% is. There is not any different economic system that has suffered like that out of doors a conflict.
Efi Koutsokosta: So Greece not too long ago exited the EU’s so-called enhanced surveillance framework. What does this imply for Greek electorate?
Euclid Tsakalotos: We got here out of the settlement in the summertime of 2018, and it used to be agreed then that we’d go away the improved surveillance in 3, 4 years. So it is excellent information. And the large query now could be whether or not what we completed in 2018, which used to be a transparent hall by means of regulating the debt in order that we did not have very top monetary necessities yearly – not up to Spain’s and Portugal’s – whether or not we will use that area, that hall, so as to cut back the inventory of debt, the debt to GDP, by means of expanding expansion. I’m now not very constructive, given the way in which this executive has tackled that process, however that is the place we’re. What we completed in the summertime of 2018 used to be to go away as soon as and for all of the Memorandum, to have a buffer to offer the monetary markets some convenience, a hall regulating debt which gave us 10, 12 years by which to get our act in combination on the true economic system aspect.
Efi Koutsokosta: Even nowadays the Greek instance and the way in which the EU behaved to Greece and Greek electorate continues to be being utilized by some political forces around the EU to mention how dangerous the EU is and guilty Brussels for other folks’s issues. What is truth and what’s a fable?
Euclid Tsakalotos: Rightly so, I feel. Europe has at all times been in the back of the curve. They’re in the back of the curve now within the power disaster. I imply, it is taken an enormous crisis to look the primary inklings of a united European-wide power coverage. So I feel Europe has been in the back of the curve. I feel that there’s a actual risk to the EU nonetheless, which is that this divergence within the destiny of the economies between Northern Europe and Southern Europe. If you need to know Salvini and Meloni, if you wish to perceive Golden Dawn, if you wish to perceive the upward push of the brand new proper, then the industrial insurance policies that result in inequality, that limit the general public services and products, the get entry to that individuals need to well being and to move and to training are a part of the solution.
Efi Koutsokosta: But in any case, we’re coming to the similar level. We have the North, we have now the South. They have other approaches to objects, as we see additionally nowadays. So what are the teachings realized?
Euclid Tsakalotos: Let me be blunt. You can’t have one forex and a few nations going ahead, and different nations now not going ahead. Eventually, that may wreck. If you need a commonplace forex, then you must have convergence. And to have convergence, you must have convergence of policymaking and feature that North Europeans keep in mind that identical to the United States, if Texas is in hassle or Mississippi is in hassle, no matter state, there will probably be cohesion via fiscal insurance policies, via stabilisation insurance policies, the similar is going. It’s within the common sense of a unmarried forex.
Efi Koutsokosta: So what are the teachings learnt and now not forgotten from this disaster, particularly now that any other massive disaster is coming nearer?
Jean-Claude Juncker: We will have to now not repeat the errors we have now made right through the Greek Euro disaster. And I’ve at all times regarded as that the distribution of the efforts between wealthy and deficient used to be now not balanced sufficient. Part of this error is because of the European Union, as a result of… on the IMF, on the Central Bank, and on the Commission right through the years ahead of my years, we put into position a blind austerity price range, which used to be a mistake. I would really like the Commission to be mindful the social penalties of the anti-crisis tools that are put into position. This isn’t a question for top officers. This is an issue for politicians.
Competitive benefits of the Greek debt
Greece’s economic system is rising speedy, however the nation nonetheless has the absolute best debt to GDP ratio within the eurozone, amounting to 189%. The unemployment charge is without doubt one of the absolute best whilst on the identical time the minimal salary is rating a number of the lowest within the euro house. The present disaster is popping the highlight as soon as once more onto the South. Euronews’ Symela Touchtidou spoke to the present Greek Finance Minister, Christos Staikouras.
Symela Touchtidou, Euronews: Greece has not too long ago exited the improved surveillance programme. What does this almost imply for the Greek other folks?
Christos Staikouras, Greek Finance Minister: It’s an ideal good fortune for Greece. On the sacrifices, the massive sacrifices of the Greek electorate. This is jointly a good fortune for excellent executive and our companions. This implies that we’re again to normality for the primary time since 2010. This can have sure, direct and oblique results at the Greek economic system and society. We make stronger our get entry to to world markets. We spice up the preconditions for upper and extra robust and powerful financial expansion to be able to draw in a lot more investments. And we’re a lot nearer to attaining the general function, the general milestone of our financial coverage, which is funding grade standing.
Symela Touchtidou: Practically, Greece has now extra financial freedom, however it comes at a time when the viewpoint for the European and the worldwide economic system is relatively gloomy. So how a lot room do you in reality need to assist other folks, families and companies in Greece?
Christos Staikouras: We attempted to create a fiscal room within the fiscal area to be able to create a security internet round household-sensitive costs. And we have now too, within the remaining 3 years, controlled to enforce environment friendly fiscal measures so as now not most effective to get well strongly again in 2021, but additionally to cut back unemployment, which is a very powerful, bearing in mind that we had the absolute best unemployment amongst all EU member states. At the similar time, it kind of feels that we have got powerful financial expansion. So we will be able to be mindful this financial efficiency to be able to create the preconditions to cut back much more taxes and social contributions and on the identical time, to be very as regards to Greek society, to be able to enforce the fiscal measures which are wanted, to be able to counter a part of the sacrifices led to by means of the industrial disaster: the power disaster that we are facing on the European degree not too long ago.
Symela Touchtidou: And the invoice from all of the improve measures. Does it fear you that it would weigh closely on Greece’s public debt, which is already top?
Christos Staikouras: First of all, public debt as a in line with cent of GDP diminished by means of 13% again in 2021, the biggest lower for the reason that starting of the eurozone. And we think this lower to be a lot upper in 2022. We have money reserves at round €49 billion as a share of GDP among the absolute best on the European degree. At the similar time, a good portion of debt is at the legitimate sector with fastened charges. And an important factor is that the once a year gross financing wishes stand at round 10% of GDP – part of what the European moderate is. All those are aggressive benefits of the Greek debt, when compared with many different European friends.
Symela Touchtidou: And having a look forward, there’s a dialogue within the EU about fiscal laws and financial governance. Do you imagine that the principles on debt will have to be rethought? And what would you plan for your opposite numbers?
Christos Staikouras: Definitely, we will have to incorporate the revel in of the critical disaster we are facing on the European degree within the remaining 3 years. The elementary element is that we will have to have fiscal self-discipline, which is a prerequisite for financial expansion, however on the identical time, fiscal flexibility to be mindful the industrial cycle. At the similar time, we will have to incorporate the revel in we confronted, by means of making the most of the Recovery and Resilience plan and the independence we have now on the European degree, to be able to enforce coherent and sustainable insurance policies on the nationwide degree.
Efi Koutsokosta: So after having survived all this, what do you spot nowadays? Do you assume that the location in Greece, now not most effective financially but additionally socially and politically, is healthier?
Jean-Claude Juncker: I feel that there’s no comparability imaginable between the location now and the location I used to be suffering with originally of the century till 2015, once we in spite of everything outlined the suitable resolution to the Greek downside. But Greece nonetheless has main difficulties. Greece resides in a turbulent area of Europe. Turkey, the incursions of Turkish aviation, drilling issues, the shut neighbourhood to the northern a part of the African continent, refugees… that is nonetheless a significant issue in Greece. Times are nonetheless tricky. I feel the most important downside is that Greece isn’t enjoying the position in Europe it will have to play. Without Greece, the European Union would now not be entire and I would really like Greece to echo in a more potent method its specific voice.
