The World's 'Biggest-Ever Financial Rescue' Is Over

8-year bailout era is officially over in Greece
By Kate Seamons,  Newser Staff
Posted Aug 20, 2018 11:00 AM CDT
Greece's Crisis Ends, but He Still Wakes Up to 'Nightmare'
In this photo from Thursday, a woman walks in central Athens in an arcade with shuttered shops due to the financial crisis.   (AP Photo/Petros Giannakouris)

"I wake up in the morning to a nightmare. How will I manage my finances and my responsibilities? This is what I wake up to every morning." That reality is not set to change for Yorgos Vagelakos, an 81-year-old retiree living in Athens—even as Greece's reality changes in a major way. The country's eight-year bailout is officially over, with the country's third and final bailout program ending Monday, but the cuts to public spending it has had to make over the past eight years will live on. Reuters reports that Vagelakos, who had originally received a monthly pension of about €1,250 (about $1,430), now gets €685, or about $780, with further cuts likely next year. More:

  • While the BBC notes Greece will now finally be able to borrow at market rates again, the AP notes "there'll be no dancing in the moonlit streets of Athens" over the end of the bailout, during which Greece received roughly $330 billion in loans. The Guardian reminds us that represents the "world's biggest-ever financial rescue."

  • Yes, things are better, at least "on paper," reports CNN, which notes there was a 1% budget surplus last year, an about-face from the 15% deficit in 2009. The export picture is improving, and unemployment has retreated from its 28% peak, adds the AP. But that figure is still around 20%, and "underpaid drudgery is the norm in new jobs." Taxes are up, income is down by about a third on average, and even suicides are up.
  • And that's not all. Here's how the AP explains what the future looks like: "The government has agreed to a timetable of savings so strict as to plague a future generation and a half: For every year over the next four decades, governments must make more than they spend while ensuring that the economy—that shrank by a quarter since 2009—also expands at a smart rate."
  • The Guardian reports on those debt conditions. Greece's budget surplus must stand at 3.5% of GDP for the next five years, after which it can sink to 2%. The bailout came via the European Central Bank, European Commission, and International Monetary Fund, with the Guardian noting the IMF hasn't been a fan of those targets, which it saw as overly burdensome. The BBC reports some analysts expect Greece to be paying off its debt beyond 2060.
  • Some perspective from the IMF: In the last decade, the economies of just four countries shrunk more than Greece's: Yemen, Libya, Venezuela, and Equatorial Guinea.
  • The Financial Times looks at what's next for Greece from an economic perspective. Dive in here.
  • Or read the AP's timeline of the crisis. Its first entry dates to Oct. 18, 2009.
(More Greece stories.)

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