While the ruling Radical Left SYRIZA is expected to celebrate when three international bailouts of 326 billion euros ($376.54 billion) end on Aug. 20, more than eight years after an economic crisis began, the reality is years of scrutiny from international lenders, more pension cuts and slashed spending if fiscal targets aren’t met.
Repeated pounding by austerity measures, including those imposed by Prime Minister Alexis Tsipras who vowed to reverse them, have left Greeks weary and putting up only feeble protests after thousands of demonstrations and strikes have done nothing to halt the brutal measures, excepting Parliament workers who were exempted when they threatened to strike.
Consumers and experts agree the the economy won’t rebound significantly and that investors will have confidence once the rescue packages end and the country is left at the mercy of the markets.
“Rather than hitting the ground running, the Greek economy is seen limping out of the Eurozone -funded program,” the report said.
“The Greek bond yields remain high in comparison to other countries, although they have gone down compared to previous years. They highlight that there is no confidence in Greece, and this has been aggravated by the government’s handling of the recent deadly fires in Attica, as this rendered evident the incapacity of the administration,” Nikolina Kosteletou, lecturer of economics at the University of Athens, told the Chinese news agency Xinhua.
“I don’t know how Greece will pay for it in market terms, but it will also depend on how the exit from the bailout program takes place in general,” she added.
Greek central banker Yannis Stournaras said the markets will take it out on Greece if Tsipras – who reneged on anti-austerity promises to voters – tries to weasel out of reforms he’s imposed and more promised to the lenders, the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) and Washington, D.C.-based International Monetary Fund (IMF).
Those include more pension cuts starting Jan. 1, 2019 and in 2020 first-time taxes on previously exempt low-and-moderate income individuals and families even if he’s voted out of office in the next elections which must be held by October, 2019.
He’s tried to curry favor with handouts to low-income pensioners who benefits are being cut more than the gifts, and with bonuses to young jobless, funded by what Finance Minister Euclid Tsakalotos admitted was money from deliberate overtaxing of the middle-class.
“By offering handouts, all we will do is to burden the economy further. We need to give a chance to the economy to grow, especially exports that should have grown far more than they have actually done. In Greece it is only tourism that is doing well, nothing else,” said Kosteletou, also a governing board member at the Independent Authority for Public Revenue (IAPR).
Official projections point to a 2 percent economic expansion this year, and the Economic Sentiment Index of Greece’s Foundation for Economic and Industrial Research (IOBE) showed in July its highest reading in the last four years.
But consumer confidence showed no improvement last month, according to IOBE, as the main tax-paying season has started, and the property tax is expected to be heavier for many property owners later in the year.