ATHENS – The day Greek governments has been waiting for – Aug. 20, 2018 – heralds the end of more than eight years of three international bailouts of 326 billion euros ($372.03 billion) but not the austerity that came with them, nor the misery that will go on for many after repeated pay cuts, tax hikes, slashed pensions and worker legacies.
Those troubles are likely to be the legacy of the attempts by the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) and the Washington, D.C.-based International Monetary Fund (IMF) to keep Greece’s economy from collapsing – although the debt is still rising and the loans won’t be repaid until 2060.
Without the bailout monies, Greece will rely on a cash buffer of 9.5 billion euros ($10.84 billion) from the last 15 billion euros ($17.12 billion) installment of a third rescue package of 86 billion euros ($98.14 billion), enough to last for perhaps 22 months.
After that – or before if the government feels the risk is worth it – Greece will have to return to the mercy of the markets with two previous test bonds of 3 billion euros ($3.42 billion) selling but at interest rates more than three times higher than the bailouts.
Even a recently-concluded debt relief deal didn’t provide lower interest, only a longer time to repay and Prime Minister and Radical Left SYRIZA leader Alexis Tsipras’ constant claims he’s bringing a recovery and a “clean exit” from the bailouts have repeatedly been dashed by the creditors who said the country’s economy will need scrutiny for years to make sure fiscal targets are hit and there’s no backsliding on more austerity.
More pension cuts are due to begin Jan, 1, 2019, an election year with polls showing Tsipras and SYRIZA have plummeted in popularity after he reneged on anti-austerity promises, and first-time taxes are due to begin in 2020 for previously exempt low-and-middle-income individuals and families who will now have to pay because the tax threshold is being lowered.
The government canceled plans for a celebration because of the July 23 wildfires that killed 96 people and left Tsipras and his coalition partner, the pro-austerity, marginal, jingoistic Independent Greeks (ANEL) under bitter criticism for not having a disaster or evacuation plan.
The country’s economy has shrunk more than 25 percent since then-Premier and PASOK Socialist leader George Papandreou in 2010 went to the remote island of Kastellorizo near Turkey to announce he’d be seeking a bailout of 110 billion euros ($125.53 billion) before a second for 130 billion euros ($148.35 billion) was sought by a New Democracy led-government and the third by Tsipras and SYRIZA, which promised to take on the creditors but bowed to them too.
“Basically, what is going to happen when we leave the bailout is that we stop borrowing money at 0.5 percent from our Eurozone partners and start borrowing on the bond market at 4.5 percent,” Nicos Voglis, boss of a sandwich bar in central Athens told the site Marketplace.
“I don’t think that is anything to celebrate. It’s not something to have a party about. Come on!” he said.
Even some members of SYRIZA said the atmosphere was too glum for the party to rejoice over the bailouts end and while Tsipras hasn’t mentioned that if a recovery is coming it’s largely because he reneged on promises to help the country’s most vulnerable, burying Greeks with an avalanche of taxes, new taxes and more austerity he swore he’d stop but continued.