This is not the end of Greece’s misery – but it is a turning point

 

Share

So Greece is returning to the markets to borrow money. The investors who lost big on their bond holdings at the peak of the crisis four years ago will doubtless be more careful this time.

They will not want to experience another “haircut” – that innocuous expression describing the process whereby a country does  not pay back in full the money it has borrowed. But in financial markets there is always someone else prepared to take a risk. For banks that have been lent money at very low rates by the European Central Bank, this could make a nice little profit.

The return to the markets is symbolic too. It coincides with the possible return to economic growth, for the IMF thinks that GDP will increase by 0.6 per cent this year and 2.9 per cent next. That would be the fastest growth in the eurozone, aside from the Slovak Republic, Estonia and Latvia.

This great leap forward, if it happens, does come from a long way back. Greece has lost 25 per cent of its GDP. No other developed country has had as severe a recession.

As Dimitris Kourkoulas, its Deputy Minister for European Affairs,  pointed out: “We have been in seven consecutive years of recession. This has never happened in modern history. Even in the Great Depression of 1929, the American economy was in recession for just three years.”

The austerity forced on Greece has been extreme. Wages have been cut by an average of about 30 per cent. Some pensions have been cut by more. Unemployment is 27 per cent and would have been higher had not nearly 50,000 people a year left the country to find jobs. As a result there has been a wave of protests, and another general strike is scheduled for today.

Yet the democracy has  held together. What has happened in Greece is an extreme example of an economic experiment and to many people a surprising one.

If someone six years ago  as the economy started to head downwards had known that there would be seven years  of recession they would probably have expected that the populace would not accept it. The country would have come out of the euro, maybe even come out of the European Union if that was what the EU imposed on it. Democracy, some might have thought, would not survive.

But none of this has happened. There is anger at Germany, seen as the principal country imposing the austerity, and we may see more of that when Angela Merkel visits on Friday.

But, maybe because emigration has provided a safety valve, the anger has been contained and the hostility seems directed only at Germany, however unfairly, rather than at the EU more generally. The glue that holds together the EU seems to have stuck.

This is not the end of Greece’s misery. The debt to GDP ratio is still 175 per cent. The growth this year may not materialise. The country may need yet another bailout, as the German Finance Minister, Wolfgang Schäuble, admits.

Another global downturn would be a disaster and it will be well into the 2020s before the country recovers the standard of living it enjoyed in 2006. But it is a turning point of sorts and that deserves notice and, for the long-suffering Greek people, respect.

React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Sales Manager

£35000 - £45000 per annum: Recruitment Genius: This is a unique opportunity to...

Recruitment Genius: Trainee Manager - Production

Negotiable: Recruitment Genius: Trainee Managers are required to join the UK's...

Recruitment Genius: Telesales Manager

£25000 - £35000 per annum: Recruitment Genius: You will maximise the effective...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + uncapped commission : SThree: Hello! I know most ...

Day In a Page

Read Next
A picture posted by Lubitz to Facebook in February 2013  

Andreas Lubitz: Knee-jerk reaction to 9/11 enabled mass murder

Simon Calder
The Archbishop of Canterbury, the Most Rev Justin Welby, presides at the reinterment of Richard III yesterday  

Richard III: We Leicester folk have one question: how much did it all cost?

Sean O’Grady
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss