Greece exits third international bailout in vote of confidence for major economic reforms
Today, Greece formally exits its third international bailout programme since 2010. Funded by the lending troika of the European Commission, the European Central Bank and the IMF, it is hoped that reforms enacted by Athens will be sufficient to secure the country financially over the long-term.
But daunting prospects remain as Greece looks to achieve growth and the ability to secure its own financing needs once again. Indeed, while a final exit agreement was signed by Eurozone finance ministers earlier this month, a debt burden of 180% of GDP, as well as a requirement to maintain budgetary surpluses at various levels until 2060 remains a concern. Specifically, experts have suggested that Athens should have accepted a small precautionary credit line and minor supervision for an additional period.
Concerns remain over the sustainability of debt servicing, which has been raised repeatedly by the IMF amid calls for outright debt cancellation to lower the risk of Greece defaulting again.
However, it’s not all bad news; growth for the last five quarters has remained above 1.5%, while the European Commission expects growth of 1.9% for 2018. A sustained drop in unemployment to 19.5% from 29% looks set to continue, with the government confident in its ability to deliver on surplus targets over the next two years. Despite a painful, decades-long repayment schedule, prospects for the Greek economy are looking somewhat more positive.
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