Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Deal on debt? Jaded Greeks ask what's in it for them

Published 06/22/2018, 08:53 AM
Updated 06/22/2018, 08:53 AM
© Reuters. A man stands next to a kiosk selling Greek and EU flags in Athens

© Reuters. A man stands next to a kiosk selling Greek and EU flags in Athens

By Angeliki Koutantou

ATHENS (Reuters) - Greeks were unimpressed by a debt relief package from euro zone finance ministers on Friday, jaded by years of austerity which has pushed a third of the population into poverty and shredded the government's popularity.

Greece has relied on loans from euro zone governments in three bailouts since 2010 in turn for painful reforms, including pension cuts and tax hikes, which have shrunk the economy by a quarter and had sent unemployment to record highs.

Euro zone finance ministers sealed a deal in the early hours of Friday to extend maturities and defer interest rates on a big chunk of loans to Greece, the most indebted country in the euro zone.

But the mood on the streets of Athens was cautious on Friday.

"Our life will continue to be the same, our young people will (continue) to emigrate abroad, the rights of the elderly will be trampled on," said Elvis Papanikolas, 28, a tourism sector employee.

"... this situation will continue with half of Greeks taking medication or committing suicide, and the other half unemployed," he said.

About 40 percent of young people are out of job, leading to the emigration of about 400,000 Greeks over the past decade.

After a deep depression, Greece's economy is slowly showing signs of recovery. The economy was poised to grow by about 2 percent in 2018, but ordinary people are still having trouble paying their bills.

"The debt relief is definitely a good thing for Greece but it will take time for any positive effect to be reflected in the real economy," said Anastasios Zois, 74, a pensioner.

Greece is exiting its third international bailout in August but despite hundreds of reforms requested by its creditors already being completed, investors still need to know the country will be able to service a debt load worth of 180 percent of gross domestic product.

Athens will also get a new 15 billion euro loan, giving it a total cash buffer of 24 million euros which will help cover its financing needs for some 22 months.

Many Greeks were unfamiliar with terms of the deal, focusing more on the palpable impact of bailouts on their pockets.

But with more pension cuts and tax hikes already legislated for in 2019 and 2020 so that Athens keeps its finances on track, Greeks won't expect their finances to improve anytime soon.

Prime Minister Alexis Tsipras's left-right coalition has a fragile parliamentary majority and is trailing the conservative opposition by double digits in opinion polls.

Tsipras on Friday hailed the decision by euro zone's creditors to offer debt relief, saying it marked a definitive turn away from a relentless cycle of austerity.

"I think that Greek people will soon realize the positive changes that will happen both in 2018 and in the comings years from the fiscal room that is being created," Tsipras added.

However, the resigned public response suggests the debt may not give much impetus to the government's hopes of being reelected in a general election due by October 2019.

"What we have here is one more dose of medicine for the patient," said Alexis Kalambokis, 28, who works at leather goods shop in central Athens.

© Reuters. A man stands next to a kiosk selling Greek and EU flags in Athens

"I don't think that the country's economic situation will change much."

Latest comments

What's in it for them? How about the decades of living on credit they had?
No economy can recover by quadruple taxing even the air its citizens breathe...
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.