Greece Formally Exits Bailout Era After 12 Years of Pain

Greece formally exited the bailout era on Saturday as the “enhanced surveillance framework” imposed by the EU was lifted after twelve years of painful austerity.

In a message on Twitter, President of the European Commission Ursula von der Leyen hailed the determination and resilience of Greece and its people.

“Today marks the last day of the enhanced economic surveillance of Greece,” she said. “Thanks to the determination and resilience of Greece and its people, the country can close this chapter, and look to the future with confidence. The EU will always stand by your side.”

🇬🇷 Today marks the last day of the enhanced economic surveillance of Greece.

Thanks to the determination and resilience of Greece and its people, the country can close this chapter, and look to the future with confidence.

The EU will always stand by your side. pic.twitter.com/hDnFd9dqB5

— Ursula von der Leyen (@vonderleyen) August 20, 2022

In a message, Greek Prime Minister Kyriakos Mitsotakis hailed the occasion as a “historic moment.”

He referred to the hardships Greek people endured through taxation and cuts in wages and pensions and their resilience through high unemployment, the rise of fanaticism and populism, and “policy mishandlings that prevented a swifter exit from our international partners’ surveillance.”

Greece today is a different Greece, he noted, with high growth, a big drop in unemployment, lower taxes, social security contributions and property taxes and support for the vulnerable…[It is] a country closer to achieving its goal of investment-grade status.

“Exiting the enhanced surveillance framework means greater national leeway in our economic choices,” he noted. “But it does not mean a return to the mistakes that brought about the painful adventure of the Memoranda.”

“Besides, what I mentioned before is exactly due to a prudent policy, that uses up the fiscal space without undermining the future. With prudent measures that increase the collective wealth to the benefit of the whole of society.”

Σήμερα η Ελλάδα εξέρχεται από το καθεστώς της Ενισχυμένης Ευρωπαϊκής Εποπτείας. Κλείνει έτσι ένας 12ετής κύκλος που έφερε πόνο στους πολίτες, καθήλωση στην οικονομία, διχασμό στην κοινωνία. Για να ξεπροβάλει ένας νέος, καθαρός ορίζοντας ανάπτυξης, ενότητας & ευημερίας για όλους. pic.twitter.com/dc4cpBPQbS

— Prime Minister GR (@PrimeministerGR) August 20, 2022

Greece returns to “European normalcy”

Greece was given the green light to exit the strict post-bailout monitoring and return to “European normalcy” at the June 16th meeting of the Eurogroup.

Greece will still be monitored by EU institutions until 2059 when the country is estimated to repay 75 percent of the loans it received under the bailout agreements.

Until then, Greece will go through a simple post-program monitoring phase, as is the case with Ireland, Spain, Cyprus, and Portugal, and a biannual evaluation—rather than a quarterly evaluation as has been the case thus far.

On May 23rd, the European Commission adopted the fourteenth enhanced surveillance report for Greece, assessing the country’s progress with respect to policy commitments specified at the Eurogroup in June 2018.

The report acknowledged that Greece had taken the necessary steps to reach the agreed commitments despite the difficult conditions caused by the economic consequences of the new pandemic waves and the Russian invasion to Ukraine.

“Based on our assessments and the successful implementation of the reforms by Greece, the Commission may not extend the enhanced surveillance status after its expiration in August,” Commissioner of Economy Paolo Gentiloni said at the time of the presentation of the report.

The PM’s full statement on Greece exiting the bailout era

Below is the Prime Minister Mitsotakis’ address to the public:

August 20th 2022 is a historic day for Greece and for all Greeks: our country exits the EU’s enhanced surveillance framework—in the most official way. Therefore, a 12-year cycle that brought pain to citizens is now closed. It brought stagnation to the economy and division in society. Now a new, clean horizon emerges, one of development, unity and prosperity for all.

Today’s development signals the end of the Memoranda and of what was imposed in their name: Unbearable taxes and cuts in wages and pensions, bank controls and mortgaging of public assets, the downgrading of national defense, public education and health, as well as the marginalization of Greece’s position in Europe and the world. All of these, fortunately, now belong to the past.

What also belongs to the past are the wounds that have opened in the backbone of our society these 12 years: fanaticism, fires, violence, as well as tragic deaths, like the deaths at Marfin Bank. The blind undermining of institutions and lies that sprung up, across town squares, next to the poison of Golden Dawn. Four years of demagogy followed, which cost our nation 100 billion euros and pushed the country to the precipice. It took hard battles against populism for the country to remain on a European trajectory.

Only he who does not forget finds the strength to move forward. This is why we must learn from this recent experience. From the longstanding and cross-party responsibilities that led to the Memoranda with extravagances beyond our capabilities. From the policies that exacerbated their consequences, but also from mishandlings that prevented a swifter exit from our international partners’ surveillance.

Greece today is a different Greece. It sees high growth and a big drop in unemployment, which has already decreased by 3 percentage points since last year and by 5 points since 2019…while, at the same time, many taxes that were imposed on the people during those rocky years have been scrapped or eased. Everybody now pays less in social security contributions. And almost everybody pays lower property tax (ENFIA), while the minimum wage has been increased by 63 euros, and the most vulnerable are supported in a targeted way.

I will repeat that the recovery was neither obvious nor easy, given that it was achieved in the midst of consecutive challenges: from migration incursions in Evros and the permanent aggressiveness of our neighbors to the global pandemic and the explosion in energy prices and inflation due to the war in Ukraine. Persistent fronts, for which the State has already allocated 50 billion euros.

And yet, in an uncertain world, our country is moving forward with consistency and the certainty of the outcome. Reinforcing our armed forces with state-of-the-art equipment and our diplomacy with dynamic initiatives. Taking public education and health to new heights. Increasing total revenues thanks to a better-than-expected performance by the economy. Transforming Greece into an immense work site with hundreds of large and small-scale projects. And digitizing the state to such an extent that we have forgotten how our lives were before gov.gr.

Exiting the enhanced surveillance framework means greater national leeway in our economic choices. But it does not mean a return to the mistakes that brought about the painful adventure of the Memoranda. Besides, what I mentioned before is exactly due to a prudent policy, that uses up the fiscal space without undermining the future. With prudent measures that increase the collective wealth to the benefit of the whole of society.

We forge ahead without forgetting. Because we now know that lower taxes lead to growth and that investments lead to new jobs. We know that Europe does not only have the aspect of control, but also that of solidarity that strengthens the position of the country. And that in the end, economic independence goes hand in hand with national independence. Just like the progress of the state can be translated into supporting and benefiting every Greek household.

Therefore, these last three years constitute, in practice, a response to the lessons of the last 12 years. They show the way so that we never, ever, go back to what we have lived through. They forge our self-awareness. And they urge us to move ahead united, armed with the truth and realistic solutions, and not with lies and easy denials. On a course that may entail mistakes but is definitely not a wrong path!

In the difficult years that preceded, our people have suffered a lot. But they have also proved many things. Thanks to their sacrifices, our country swiftly got back on its feet. The mishaps have become lessons of mature responsibility in our political behavior. And when needed, Greek women and men showed trust and joined forces with the state and the responsible stakeholders, against common threats. I want to thank them from the bottom of my heart.

Tomorrow can and must be fairer. With more opportunities for everyone. So that we don’t experience another brain drain of our youth. So that women can live and work with safety and equality. So that people with disabilities and every vulnerable person can feel they are cared for by the state. In a country of established rights and well-paying jobs. A country with an open education and a dignified health system. We can make it happen.

Today the government, even before it completes its first 4-year term, is writing the final credits to this long ordeal. Let’s turn them into a prologue to a new fascinating course. With the first stop being to regain the investment grade. With the National Recovery Plan as a steady compass that will build a strong, modern and self-reliant Greece. With stability, continuity and consistency.