It's been a year since Greece accepted its third massive bailout, after left-wing prime minister Alexis Tsipras threatened to defy international lenders but ultimately acquiesced. Helena Smith of the Guardian recently visited Athens to gauge the economic climate and the popular mood. She found a large swathe of the population unable to live on the lower wages and increased taxes, and so they turn to buying and selling on the black market. She also found widespread disillusionment with the political class as a whole, with Tsipras "now a reviled figure." It seems apparent that the latest bailout will not solve Greece's economic woes in a stable way, and was perhaps never intended to. As Smith reports:
Almost all agree that last summer’s bailout simply kicks the can down the road – an art EU mandarins have mastered since Greece’s ordeal by financial collapse begun. Europe’s weakest link will face further tumult when the latest measures kick in this autumn and the Syriza-led government is forced to enact contentious employment reforms to secure a further €2.8bn in loans.
"I wish I could say Greece has been on the mend over the last year,” says George Papaconstantinou, who oversaw the country’s first rescue package as finance minister. “Instead we are witnessing a double-dip recession that can be wholly ascribed to Syriza’s first six months in office, which almost destroyed the country and certainly set it back many years.”
More than ever, he says, Greece needs large-scale foreign investment to kickstart growth – investment that is unlikely to happen in the face of government hostility to investors, both domestic and foreign.
Papaconstantinou, who has chronicled the crisis in a memoir, Game Over, argues that last summer’s lifeline was all the more tragic for being unnecessary. “What really differentiates the latest bailout from the previous ones is that this time around, it could have been avoided,” he writes in the book. “It became necessary because of a mix of ideological blindness, lack of understanding of basic eurozone rules, unforgivable brinkmanship and plain incompetence during the first six months Syriza was in power.”
A year on and Greece, though quiet, remains as febrile as ever on the frontline of the euro storm.
Image: Greek anti-austerity protesters staging a demonstration in May. Via the Guardian.