As Dimitri Lascaris of the Real News reports, the eurozone and the Syriza-led government of Greece’s Prime Minister Alexis Tsipras announced with much fanfare that Greece had finally exited its bailout.
The bailout amounted to 289 billion euros over an eight-year period commencing in 2010. The bailout has left Greece with a crushing debt amounting to approximately 180 percent of GDP. Moreover, the bailout loans were conditional upon the Greek government imposing extraordinarily onerous conditions of austerity on the Greek people. That austerity resulted in an unprecedented 25 percent contraction in Greece’s economy, soaring unemployment and poverty, a massive brain drain, and sharply increased rates of suicide.
Yet, the insanity does not end here.
Costas Lapavitsas explains that Greece is formally obligated to ensure primary surpluses of 3.5% of GDP annually for the next four years, to 2022 (!) Primary surpluses are the surpluses the government must make before paying interest on its national debt. These surpluses can only be made by imposing heavy taxes, by cutting public expenditure. That’s the way to do it. After 2022, Greece is formally obliged to ensure primary surpluses of more than 2 percent annually until 2060 (!)
On top of that, Greece has got a public debt in the region of 180 percent of GDP, which basically dictates the policies that the country will follow, because it has to be serviced.
The current government has signed up already to get a fresh round of cutting pensions in January 2019, and another round of raising taxes in 2020. These are obligations he has to fulfil. So under no circumstances is Greece in the same position as other European countries.
Finally, in terms of monitoring by the lenders, which was the reality of the last few years, because of these onerous obligations on the part of the country, Greece will be subjected to more severe monitoring than other European countries, with quarterly visits by the troika [ECB, IMF, European Commission] to examine its accounts and so on. The next visit is planned for the 10th of September.
This economy has got negative net savings. In other words, it hasn’t got the capital to invest. It doesn’t generate the capital to invest. And it has got banks that are basically dead on their feet. Greek banks have got non-performing loans; 45 percent of their total assets. These are ghosts. They’re not real banks. So they cannot write the credit that is necessary for investment to take place. So investment has collapsed. There is no investment in Greece. The capital stock is not even replenished. It’s basically dying away.
On top of that, 400,000 Greeks during the last few years have emigrated. These are Greeks who are very well trained. These are the best in the country. They’ve emigrated because they cannot live in the country. And that, of course, weakens the prospects for growth. Because if you don’t have trained labor, how can the economy grow?
So, this is the general picture concerning Greece. We have seen the complete failure of the IMF policies in the past in various regions, which were implemented only to save the Western big capital from the bursting bubbles. For the first time, these policies brought utter disaster to a developed region. And this time, it was Greece's partners who ruined the country with the help of the IMF mafia, just to save the FrancoGerman banks.
Greece has become a great example of the failure and insanity of the neoliberal priesthood.
The brutal neoliberal experiment has ended for the boiled frog Greece - what we should be expecting next