ESSAY

AFTER several years in which Greece was kept afloat by the munificence of the eurozone countries, Athens was trumpeted by many media outlets this week as being free at last from an EU bailout programme worth 61.9billion euros (£55billion) in emergency loans. That was part of an eight-year rescue package worth £258billion.

Despite the reports of economic privation and the dark clouds over Greece finally lifting, the reality is that Greece is far from saved from pecuniary disaster. The harsh economic medicine forced on the country by the EU and Germany in particular as conditions of the bailout has resulted in death by a thousand cuts.

The country’s once elegant capital has become one of the most depressing and untidiest cities in Western Europe, a city that is now in terrible decay. Shops on once booming boulevards are shuttered, while heavy machines and cranes stand idle over the shells of unfinished buildings. Much of Athens is covered in ugly graffiti. Even the awnings around Greece’s most revered ancient site the Parthenon, on the Athenian Acropolis, is covered in unsightly painted drawings.

The hardships and deprivations are everywhere – all the more heart-breaking in that this downward spiral had been caused by European leaders who were masquerading as people bearing gifts. Most Athenians are struggling to make ends meet.

 

HOSPITAL doctors, for example, have seen their monthly pay cut to just over a thousand pounds a month. It is only through social conscience and the love of their country that has kept some of them in Athens.

Some 70,000 highly skilled professionals including doctors, dentists and pharmacists have left the country as part of a broader Grexodus of 500,000 people.

The best way for any country to emerge from financial crisis is to increase its national income so that tax revenues rise and global debts can be paid off. But during the last eight years, Greece has moved in precisely the opposite direction. National output has slumped by an astonishing 25 per cent. The result is adult unemployment of 20 per cent. Even more shocking and socially disruptive, some 40 per cent of 18 to 25-year olds are out of work.

Without any income for the young, it is now commonplace for three generations of the same family to be forced to live cheek by jowl in the same crowded apartments. The fact is that the austerity imposed by the eurocrats has ruined Greece and done nothing to relive it of its monstrous level of debt.

It has snuffed out entrepreneurship, as well as created a poisonous political legacy where a far-Left Marxist party headed by Alexis Tsipras rules with the support of fanatical politicians on the populist Right.

The end of the EU’s bailout programme may technically mean that Greece can return to the international markets to borrow again, but any notion that the world’s commercial bankers and financiers will be queuing at Athens’ overcrowded and dilapidated airport to lend – and pour good money after bad – is a fantasy.

After all, the country is still sitting on a debt pile of 289billion euros (£258billion) which the International Monetary Fund (IMF) puts at 191 per cent, or almost twice the nation’s total annual output.

To place that in context, it is more than two times the ratio of Britain’s national debt to output, which after a decade of UK cuts to public services and surging tax incomes as the economy has grown is now, thankfully, on a downward path.

Not only that, Greece’s stricken financial system is currently being kept afloat by short-term cash assistance of some 40billion euros (£35.6billion) per month from the Frankfurt-based European Central Bank. Without this help, which is akin to that provided by the Bank of England to the British banks at the height of the financial crisis a decade ago, the four biggest Greek lenders would be effectively bankrupt.

Together the bad loans on the books of these banks – Piraeus, Alpha, Euro Bank and National Bank of Greece – amount to 101billion euros (£90billion) or 50 per cent of the total, the highest level of any country in the European Union. Indeed the banks, the lifeblood of any Western economy, are so indebted that they cannot lend any more.

 

WHICH means the small and medium-sized enterprises that are the country’s business bedrock cannot get the finance they need to carry on and invest. Nor do ordinary consumers find it possible to obtain credit.

This desolate financial scenario is a direct result of the austerity conditions demanded by Brussels eurocrats and German central bankers. Over the last eight years successive Greek governments have been forced to attend no fewer than 95 meetings at which the most stringent measures have been imposed on them.

The results for the Greek people have been nothing short of catastrophic.

Yet in their determination to preserve the greater political project of the eurozone and the EU, and to keep Greece as their client state, Brussels and German politicians have been utterly ruthless.

In spite of personal appeals from the IMF’s euro-supporting managing-director Christine Lagarde to forgive Greece its debt burden and allow the country to be given a fresh start, the eurofanatics have been unrelenting in their determination to keep the debt anvil hanging around its neck.

Greece is in an armlock it cannot escape because of a combination of its debt burden and the fact that its membership of the eurozone means it can longer devalue its currency. And the EU and Germans are determined to keep it that way to save their precious euro.

So, despite the joyous and uplifting media reports about the bailout this week, be in no doubt that this Greek tragedy is very far from being over.

 

GREECE should ditch the euro as it emerges from eight years of austerity caused by punishing EU bailouts.

The country also should have been afforded the right to have gone bankrupt at the height of the eurozone crisis instead of having been forced into a strict rescue package dictated by Brussels and Germany.

The EU pushed the country into accepting massive loans to save German and French banks from collapse. Greece’s creditors effectively turned the country into a dead colony that had been left devastated by fiscal austerity, with citizens having endured years of pain and misery.

Greece has now existed the final stage of an eight-year, £258billion bailout programme, which has left Athens crippled by soaring unemployment.

On the face of it, what has really changed? Greece’s state debts have not become lower, but higher still. The state is still destitute, private citizens have become poorer, companies are liquidating at an unprecedented rate, and its gross national product has decreased by 25 per cent.

The bailout was intended only for German and French banks who had, against all reasonable logic, loaned vast sums of money to the Greek state and oligarchy. As for the Greek banks and state, they should not have been saved. The country should have been allowed in declaring insolvency, to have suffered the consequences but then being allowed to have picked themselves up and by moving on – something these huge bailouts prohibited.

In a television interview, Yanis Varoufakis, a former minister who served in the Left-wing Syriza government, said: “It was absolutely necessary that the country be prepared to return to its national currency”. Unable to pay its debts, Greece faced a so-called “Grexit” from the eurozone in the aftermath of the global financial crisis of 2008. The economy has now returned to modest growth, but one in five Greeks are unemployed, average incomes have dropped by more than a third and taxes have rocketed.

Critics have argued that Greece would have fared better outside the euro, enabling it to carry out a range of measures including devaluing its currency and lowering interest rates to make the economy more competitive.

EU figures have this week tried to paint the bailout programme as a success, with European Council president Donald Tusk saying: “You did it! With huge efforts and European solidarity, you seized the day.”

Rather, the EU put Greece into a permanent coma and prefer to call it stability.