Greece Prepares to Stagger Back From Debt Crisis, the End of Bailouts in Sight

But Greece still faces daunting challenges.

Unemployment is no longer at historic highs, but one-fifth of Greeks are jobless. The economy is growing, though at a relatively slow pace of 1.4 percent last year. Households have seen their incomes chopped by a third, hundreds of thousands of Greeks work low-paying temporary jobs, and more pension cuts and tax increases lie ahead. The country had to impose credit controls in 2015, and there are still limits on how much cash Greeks can withdraw from shaky banks, although those restrictions have been gradually relaxed in recent years.

“If you look at the past three years, the Greek economy recovered, jobs were created,” said Zsolt Darvas, a senior fellow at Bruegel, a Brussels think tank. “But I think you can’t just look at the past three years. You have to look at what happened in 2010, and clearly it was a huge disaster.”

Prime Minister Alexis Tsipras, who rose to power vowing to reverse austerity, has acknowledged that the end of Greece’s third bailout program will not bring about a magical transformation. “When you take a patient out of intensive care,” he told a group of Greek entrepreneurs last month, “you don’t make him run a sprint.”

Managing the country’s debt, which is equal to nearly 180 percent of its gross domestic product, remains a herculean task. Severe belt-tightening will still be necessary if Greece is to have any hope of regaining credibility with international investors. The country is still years away from being able to sell new debt on financial markets; it still owes staggering sums to banks, financial institutions and other countries, which will be looking over Athens’s shoulder for years to come.

Mr. Tsipras’s political opponents, who have been gaining ground in opinion polls, have noted that the country will remain under foreign supervision for years to come and will still be subject to harsh austerity measures, including a package approved by Parliament last week that includes further pension cuts, tax increases and privatization of state assets.

That view is often echoed by regular Greeks. “What exit? This is a life sentence,” said Giorgos Amanatidis, a 67-year-old pensioner in Athens. He added, “Taxes, taxes and more taxes.”

Article source: https://www.nytimes.com/2018/06/21/business/economy/greece-europe-bailout.html?partner=rss&emc=rss