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Hoe staat Griekenland er economisch echt voor?

Foto ANP

De grote winnaar van de Griekse verkiezingen Syriza is tegen de strenge hervormingen die het land moet doorvoeren in ruil voor internationale miljardensteun. Daarmee lijkt een confrontatie met Europa onafwendbaar. Maar hoe staat het land er economisch eigenlijk echt voor?

Greece has finally emerged from the six-year recession that shrank its economy by a quarter, tripled unemployment and left medicine in short supply.

But the struggle over its finances isn’t over. In the years since it announced that hidden deficit spending had left the country broke, Greece has been a flashpoint in the European Union’s broader economic debates as well as a practical problem for the countries that banded together to adopt the euro. To richer northern countries, Germany in particular, Greece is a spendthrift needing harsh economic medicine.

To many Greeks, the depth of their travails has shown the limits – or even folly — of the spending cuts and tax increases pressed on it and other ailing economies like Portugal, Spain, Ireland and Italy. In 2012, conflicts over Greece’s debts threatened to tear the euro zone apart. Now, another Greek political crisis is echoing on a continent mired in economic stagnation. A protest party’s decisive victory could herald a showdown with the country’s lenders. The change in Greek leadership isn’t expected to threaten the end of the euro, but could be the start of a broader revolt against austerity.

The Situation

Syriza, an acronym that stands for Coalition of the Radical Left, finished first in elections held on Jan. 25, ousting the New Democracy party of Prime Minister Antonis Samaras, who had gambled and lost in a parliamentary showdown in a bid to shore up his weak coalition.

Syriza’s 40-year-old leader, Alexis Tsipras, campaigned on a promise to write off some of Greece’s roughly 320 billion euros of debt and unravel reforms that were a condition of receiving financial aid from the European Union and International Monetary Fund. That would put him on a collision course with the so-called troika of creditors, including the European Central Bank, who have kept the country afloat.

Some in Germany have expressed a belief that a departure of Greece from the euro area would now be manageable, although German Chancellor Angela Merkel wants it to remain. The prospect of a so-called Grexit has driven up yields on the country’s bonds.

 

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The Background

Syriza’s victory marked an end to a 40-year era in which Samaras’s New Democracy party and the socialist Pasok founded by Andreas Papandreou traded power after the ouster of a military junta. The parties’ competition for votes led to a spending spree financed by international debt while tax evasion flourished.

In 2009, Papandreou’s son George took power and revealed a deficit that was four times what the euro rules allowed. Greece received a total of 240 billion euros in EU and IMF funds to stay afloat. It also forced creditors to write down100 billion euros of privately held bonds. In return, in addition to spending cuts, the country’s lenders have pushed for an overhaul of everything from labor rules to taxi licensing.

In 2013, the country achieved a budget surplus before interest payments, one of the conditions set for possible concessions on its debt, which grew to more than 170 percent of GDP as the country borrowed more and the economy shrank. The economy is forecast to grow 2.9 percent in 2015, and in 2014 youth unemployment, which had peaked at over 60 percent, fell to about 49 percent.

 

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The Argument

Even most austerity-weary Greeks don’t want to give up the euro, according to polls. But the country’s creditors have shown no interest in the debt forgiveness sought by Syriza. Many economists agree with Tsipras that the country’s debt is too large for it to pay, although there’s far less support for his call for new populist benefits like free electricity.

The party’s argument that austerity has made things worse instead of better has struck a chord with the public, but for many Greeks his main appeal is that he is not one of the country’s too-familiar faces. The fact that Spain and other indebted countries are doing better could weaken Syriza’s leverage in debt negotiations if it wins.

But a Syriza victory could also embolden protest parties like Spain’s Podemos or Sinn Fein in Ireland that are challenging their country’s established parties, all of whom had a role in the tough — and increasingly unpopular — policies imposed as part of their own bailouts.

bloomberg