A new dawn might have arrived in Greece on July 12, which was when the European Union (EU) officially approved the country’s budget. That ended close to eight years worth of financial peril that put Greece on the brink of total collapse, since the only way they could avoid that fate was to agree to stringent austerity measures.
The inevitable result of those measures, which included steep tax increases and painful government spending cuts, was an recession that led to more Greeks becoming poverty-stricken. Yet the country had little choice, given the fact that its annual budget deficit had surged about five times higher than the accepted EU limit of three percent.
From a government perspective, the infusion of approximately $340 billion that was spread out over a trio of different bailout programs has gotten Greece at least on reasonably solid footing. More importantly, international bond markets can now look at the country from a different prism because of the greater likelihood of getting their money back.
Even the 2016 budget for Greece was able to squeeze out a surplus of 0.7 percent, yet there’s no celebration among the country’s leadership. Indeed, the remaining debt is close to twice what the annual GDP is, which means that it will likely take a few more decades to wipe it out.
Not surprisingly, many Greeks simply grit their teeth when asked about the economic improvement that has taken place. Just two years ago, the national unemployment rate was estimated at 25 percent, while half of those under the age of 24 were also out of work and things haven’t improved a great deal for the overall population.
Aggravating them more is the fact that Prime Minister Alexis Tsipras was elected promising an end to austerity, only to flip-flop once he entered office.