Greece is finally turning the page on its debt crisis, with the end to the system of Enhanced Surveillance, put in place to allow European institutions to keep an eye on the government's books.
When 12 years ago Athens said it may have to default on its debt, the ensuing crisis shook the European Union to its core.
To avoid default, the EU and the International Monetary Fund provided hundreds of billion euros in emergency funding - but this didn't come for free.
Creditors demanded Athens implement austerity policies, which finally led to a substantial rise in poverty.
The economy contracted by more than a quarter, the citizens' disposable income by one-third, and unemployment rates spiked to almost 30%.
Measures were too austere
Now, some leaders admit they were too tough on Greece, which finally delivered.
"The Greek citizens themselves have many, many reasons to be proud," says the EU Commission president of the time, Jean-Claude Juncker. "Because they have suffered a lot during this awful period. Their dignity was not always respected. Measures imposed on Greek society were too austere."
Juncker was speaking to Euronews's Efi Koutsokosta in the Global Conversation. And Greece's finance minister of the time goes further, saying the EU's austerity-driven approach has fuelled today's populist movements.
"I think Europe has been behind the curve," says Euclid Tsakalotos, who was the last Greek finance minister of the bailout era. "I think that there is a real threat to the EU still, which is this divergence in the fate of the economies between Northern Europe and Southern Europe. If you want to understand Salvini and Meloni, if you want to understand Golden Dawn, if you want to understand the rise of the new right, then the economic policies that lead to inequality, that restrict the public services, the access that people have to health and to transport and to education are part of the answer. "
Back to normality
But the current chief of the Greek economy, Christos Staikouras, paints a more upbeat picture of the country's prospects now.
"We are back to normality for the first time since 2010," he told Euronews. "This will have positive, direct and indirect effects on the Greek economy and society. We improve our access to international markets. We boost the preconditions for higher and more strong and robust economic growth in order to attract much more investments."
Efi Koutsokosta, Euronews: So Greece finally officially exited its enhanced surveillance programme after 12 years of pain and a crushing debt crisis. So, actually, what does this mean for Greek citizens and what does this mean for the EU?
Jean-Claude Juncker, Former EU Commission President: The Greek citizens themselves have many, many reasons to be proud. Because they have suffered a lot during this awful period. Their dignity was not always respected. Measures imposed on Greek society were too austere. And so the fact that now Greece has exited not the euro but the program is good news for Greece. It's good news for Europe too, because it shows, independently from all the mistakes which have been made, that European solidarity does exist and those who were defending Greece, that was my case, were right to say no to those who wanted to exclude Greece from the single currency area.
Germany was not the only country critical of Greece
Efi Koutsokosta: We see that even today, there are some populist parties around Europe that are still using the example of Greece and the way the EU behaved to the Greek people in order to blame Brussels for all the people's problems. So what would you say? What is real and what is a myth in this situation?
Jean-Claude Juncker: The European Union was not the problem, Greece was the problem. Because Greece for so many years did not care about budgets, public debt and so on. So the fault was with Greece. But the way the European Union was dealing with Greece was not the best way possible. But finally, success is there after so many efforts, success is there. So the populists are running out of arguments if they are referring to Greece. They should, like I'm doing, admire the courage of the Greek people and not try to manipulate the results and the story.
Efi Koutsokosta: Back then there was a perception that actually the decision-making was in the hands of the Germans. So is the EU too much German-dominated?
Jean-Claude Juncker: When it comes to Greece, Germany was not the only country which has been very critical of Greece. The Dutch, the Austrians, the Slovaks, the Slovenes, the Finns and others never stopped attacking Greece during the so-called Greek crisis. And Germany was not the only one. And Germany was not and is not dominating the entire European Union. Sometimes the Germans domestically give the impression that they are the masters of Europe. This is clearly not the case.
Efi Koutsokosta: When the Germans change their mind on something, everybody somehow changes their mind and we are closer to a pan-European solution. This was the case with Greece. This is the case now.
Jean-Claude Juncker: Yes, but it's not only due to the fact that the Germans, in that sense, are becoming more and more European. It's the case for all the countries because the 27 countries have learnt one lesson. Only the fact that European governments are sticking together and are doing more or less the same things is the best way for Europe to deal with crises of that kind.
Efi Koutsokosta: The EU gave a lot of money to Greece, but with painful strings attached. So can you remember moments when the EU actually showed solidarity in a tangible way?
Jean-Claude Juncker: Many moments. When Prime Minister Tsipras decided to have a referendum on the programme, I had to fight hard to prevent other member states from asking officially for the exit of Greece from the Euro area. Because this referendum was a scandal, to a large extent, because the people in Greece said no, but the programme as it was decided, was implemented. The programme was exactly…
Efi Koutsokosta: …the same? Was it the same as the one they voted no to?
Jean-Claude Juncker: Yes. It was a mistake for the Greeks themselves because they were voting on something which did no longer exist. It was unnecessary. And it created turbulences in the financial markets, Greece came under pressure more than before, so I would like to forget that chapter.
No other economy has suffered so much outside wartime
Euclid Tsakalotos, Former Finance Minister of Greece: When we came into power, there was not much solidarity in the first six months, from January to the summer, when we made the compromise. The original Juncker Memorandum, which we took to a referendum, was completely unacceptable. It was punitive, it had nothing on debt. We managed a better compromise. And I think when the SYRIZA government showed its seriousness, that it actually wanted to leave the Memorandum while doing its best to protect the most vulnerable, I think slowly the Europeans realised: "Look, this is something that is achievable". I think they eventually thought this could be a win for Greece, I think President Juncker is on record as saying that. He staked quite a lot. He was not like Wolfgang Schäuble, the German finance minister at the time who actually I think wanted us out. The fact that we left the programme, something that the previous governments hadn't managed to do. We have this corridor for debt, we've had the buffer which gives some protection, was something that the Europeans can be proud of in the end, but with a huge cost. Let us not forget that. Because any economy that loses 26% of the GDP, which happened in the first and second Memorandum… 26% of GDP! I don't know whether the people listening to us quite understand how big a number 26% is. There is no other economy that has suffered like that outside a war.
Efi Koutsokosta: So Greece recently exited the EU's so-called enhanced surveillance framework. What does this mean for Greek citizens?
Euclid Tsakalotos: We came out of the agreement in the summer of 2018, and it was agreed then that we would leave the enhanced surveillance in three, four years. So it's good news. And the big question now is whether what we achieved in 2018, which was a clear corridor by regulating the debt so that we didn't have very high financial requirements every year - lower than Spain's and Portugal's - whether we can use that space, that corridor, to be able to reduce the stock of debt, the debt to GDP, by increasing growth. I'm not very optimistic, given the way this government has tackled that task, but that's where we are. What we achieved in the summer of 2018 was to leave once and for all the Memorandum, to have a buffer to give the financial markets some comfort, a corridor regulating debt which gave us 10, 12 years in which to get our act together on the real economy side.
Efi Koutsokosta: Even today the Greek example and the way the EU behaved to Greece and Greek citizens is still being used by some political forces across the EU to say how bad the EU is and to blame Brussels for people's problems. What is reality and what is a myth?
Euclid Tsakalotos: Rightly so, I think. Europe has always been behind the curve. They're behind the curve now in the energy crisis. I mean, it's taken a huge disaster to see the first inklings of a united European-wide energy policy. So I think Europe has been behind the curve. I think that there is a real threat to the EU still, which is this divergence in the fate of the economies between Northern Europe and Southern Europe. If you want to understand Salvini and Meloni, if you want to understand Golden Dawn, if you want to understand the rise of the new right, then the economic policies that lead to inequality, that restrict the public services, the access that people have to health and to transport and to education are part of the answer.
Efi Koutsokosta: But in the end, we are coming to the same point. We have the North, we have the South. They have different approaches to things, as we see also today. So what are the lessons learned?
Euclid Tsakalotos: Let me be blunt. You cannot have one currency and some countries going forward, and other countries not going forward. Eventually, that will break. If you want a common currency, then you have to have convergence. And to have convergence, you have to have convergence of policymaking and have that North Europeans understand that just like the United States, if Texas is in trouble or Mississippi is in trouble, whatever state, there will be solidarity through fiscal policies, through stabilisation policies, the same goes. It's in the logic of a single currency.
Efi Koutsokosta: So what are the lessons learnt and not forgotten from this crisis, especially now that another huge crisis is coming closer?
Jean-Claude Juncker: We should not repeat the mistakes we have made during the Greek Euro crisis. And I have always considered that the distribution of the efforts between rich and poor was not balanced enough. Part of this mistake is due to the European Union, because… at the IMF, at the Central Bank, and at the Commission during the years before my years, we put into place a blind austerity budget, which was a mistake. I would like the Commission to take into account the social consequences of the anti-crisis instruments which are put into place. This is not a matter for high officials. This is a matter for politicians.
Competitive advantages of the Greek debt
Greece's economy is growing fast, but the country still has the highest debt to GDP ratio in the eurozone, amounting to 189%. The unemployment rate is among the highest while at the same time the minimum wage is ranking among the lowest in the euro area. The current crisis is turning the spotlight once again onto the South. Euronews' Symela Touchtidou spoke to the current Greek Finance Minister, Christos Staikouras.
Symela Touchtidou, Euronews: Greece has recently exited the enhanced surveillance programme. What does this practically mean for the Greek people?
Christos Staikouras, Greek Finance Minister: It's a great success for Greece. On the sacrifices, the huge sacrifices of the Greek citizens. This is collectively a success for good government and our partners. This means that we are back to normality for the first time since 2010. This will have positive, direct and indirect effects on the Greek economy and society. We improve our access to international markets. We boost the preconditions for higher and more strong and robust economic growth in order to attract much more investments. And we are much closer to achieving the final goal, the final milestone of our economic policy, which is investment grade status.
Symela Touchtidou: Practically, Greece has now more economic freedom, but it comes at a time when the perspective for the European and the global economy is quite gloomy. So how much room do you actually have to help people, households and businesses in Greece?
Christos Staikouras: We tried to create a fiscal room in the fiscal space in order to create a safety net around household-sensitive prices. And we have too, in the last three years, managed to implement efficient fiscal measures in order not only to recover strongly back in 2021, but also to reduce unemployment, which is crucial, taking into account that we had the highest unemployment among all EU member states. At the same time, it seems that we have robust economic growth. So we will take into account this economic performance in order to create the preconditions to reduce even more taxes and social contributions and at the same time, to be very close to Greek society, in order to implement the fiscal measures that are needed, in order to counter part of the sacrifices caused by the economic crisis: the energy crisis that we face at the European level recently.
Symela Touchtidou: And the bill from all the support measures. Does it concern you that it might weigh heavily on Greece's public debt, which is already high?
Christos Staikouras: First of all, public debt as a per cent of GDP decreased by 13% back in 2021, the largest decrease since the beginning of the eurozone. And we expect this decrease to be much higher in 2022. We have cash reserves at around €49 billion as a percentage of GDP amongst the highest at the European level. At the same time, a significant portion of debt is on the official sector with fixed rates. And the most important issue is that the annual gross financing needs stand at around 10% of GDP - half of what the European average is. All these are competitive advantages of the Greek debt, compared with many other European peers.
Symela Touchtidou: And looking ahead, there is a discussion in the EU about fiscal rules and economic governance. Do you believe that the rules on debt should be rethought? And what would you propose to your counterparts?
Christos Staikouras: Definitely, we should incorporate the experience of the severe crisis we face at the European level in the last three years. The basic component is that we should have fiscal discipline, which is a prerequisite for economic growth, but at the same time, fiscal flexibility to take into account the economic cycle. At the same time, we should incorporate the experience we faced, by taking advantage of the Recovery and Resilience plan and the independence we have at the European level, in order to implement coherent and sustainable policies at the national level.
Efi Koutsokosta: So after having survived all this, what do you see today? Do you think that the situation in Greece, not only financially but also socially and politically, is better?
Jean-Claude Juncker: I think that there is no comparison possible between the situation now and the situation I was struggling with at the beginning of the century until 2015, when we finally defined the right answer to the Greek problem. But Greece still has major difficulties. Greece is living in a turbulent region of Europe. Turkey, the incursions of Turkish aviation, drilling problems, the close neighbourhood to the northern part of the African continent, refugees… that's still a major problem in Greece. Times are still difficult. I think the biggest problem is that Greece is not playing the role in Europe it should play. Without Greece, the European Union would not be complete and I would like Greece to echo in a stronger way its particular voice.