Greece’s exit from its international bailout is a bittersweet moment – a time for serious reflection rather than jubilation. Millions of Greeks have suffered horribly in the crisis of the past decade, and these wounds will not heal overnight. Any temptation their leaders might have had to mark this week’s milestone with fanfare was also tempered by the dark national mood that followed the loss of so many lives in wildfires near Athens this month.
The fact that Greece can once again stand on its own feet after the biggest bailout in economic history – euro zone partners and the International Monetary Fund (IMF) lent Athens more than €260 billion – is naturally to be welcomed. In the depths of the debt crisis, the prospect of Greece spinning chaotically out of the single currency area was a near-constant concern. There were also fears for the future of its democracy. Those dangers were averted, and despite the political upheaval that has produced four governments over the course of the recession, the stability of democratic institutions has been maintained.
Yet none of this should obscure the scale of the challenges Greece still faces. The economy has shrunk by a quarter since 2010, and unemployment remains extremely high at just under 20 per cent. Half a million Greeks have emigrated, robbing the country of some of its best and brightest. Across the board, living standards, wages, pensions and life satisfaction have fallen. Poverty levels have shot up, as has public disaffection. The political extremes – most alarmingly, the far-right thugs of Golden Dawn – have been among the beneficiaries.
The big question facing the left-wing Syriza-led government is how to get the economy growing again. Structural weaknesses, high public debt and chronic unemployment, together with a pledge to hit ambitious primary budget surplus targets – 3.5 per cent of GDP in 2018-22 and 2 per cent of GDP in 2023-2060 – will make this very difficult to achieve. But reinvigorating the economy is essential if Greece is to avoid another lost decade of chronic debt and unemployment.