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Greece Officially Ends International Bailout Program Monday


Pensioners sit outside a shoe shop as they take part in a rally near the Finance Ministry in central Athens, April 25, 2018. Thousands of people have taken to the streets of Athens to protest against a number of bailout-related reforms, including the sale of some power plants, potential pension cuts and staffing funding cuts for state-run hospitals.

Greece officially ends its international bailout program on Monday, after eight years of massive loans and relentless austerity measures.

The completion of the loan program is a major accomplishment for Greece, but the country still faces an uphill battle to regain its economic stability.

The office of Prime Minister Alexis Tsipras described the final bailout loan last week as the “last act in the drama. Now a new page of progress, justice and growth can be turned.”

“Greece has managed to stand on her feet again,” his office said.

FILE - In this six photo series from top left, Greek Prime Minister Alexis Tsipras removes his tie at the end of his speech to lawmakers from his left-led governing coalition in Athens, June 22, 2018. Greek Prime Minister Alexis Tsipras has donned a neck tie, for the first time in more than three years in office, to celebrate the debt relief deal agreed by the country's creditors.
FILE - In this six photo series from top left, Greek Prime Minister Alexis Tsipras removes his tie at the end of his speech to lawmakers from his left-led governing coalition in Athens, June 22, 2018. Greek Prime Minister Alexis Tsipras has donned a neck tie, for the first time in more than three years in office, to celebrate the debt relief deal agreed by the country's creditors.

Economic growth, but challenges

Economic growth in Greece is slowly growing again, tourism is up nearly 17 percent in Athens this year, and once-record levels of joblessness are finally receding.

However, the country still faces massive challenges, including weak banks, the highest debt load in the European Union at 180 percent of GDP, and the loss of about a half-million mostly younger Greeks to Europe’s wealthier neighbors. Greece will also need to continue to repay its international loans until 2060.

By the time Greece completes the bailout program Monday, the country will have had three international bailouts, which took Europe to the brink of crisis.

The financial troubles exposed dangers in the European Union’s common currency and threatened to break the bloc apart. The large debt that remains in Greece and an even larger debt in Italy continue to be a financial danger to the EU.

Members of the Communist Party-affiliated labor union shout slogans during a rally in Athens, Jan. 15, 2018. Greek lawmakers, eying the end of eight years of bailout programs, approved more painful austerity measures late Monday, as strikes and mass protests brought much of Athens to a standstill.
Members of the Communist Party-affiliated labor union shout slogans during a rally in Athens, Jan. 15, 2018. Greek lawmakers, eying the end of eight years of bailout programs, approved more painful austerity measures late Monday, as strikes and mass protests brought much of Athens to a standstill.

Demonstrations

The bailouts also led to regular and sometimes violent demonstrations in Athens by citizens angry at the government’s budget measures required by international lenders in return for the bailouts.

While Greece has begun to make economic progress, economics say the bulk of the austerity measures will likely need to remain in place for many years for the country to tackle its massive debt.

Some international economists have called for part of Greece’s loans to be written off in order for Greece to keep its ballooning debt payments in check. However, any kind of loan forgiveness would be a tough sell in Germany where the initially bailouts were unpopular.

The austerity measures included massive tax hikes as high as 70 percent of earned income and pension cuts that pushed nearly half of Greece’s elderly population below the poverty line.

Pensioner Yorgos Vagelakos, 81, told Reuters that five years ago he would go to his local market with 20 euros in his pocket, while today, he has just 2 euros. He says for him, the bailout will never end.

“It’s very often that just like today, I struggle, because I see all the produce on display at the market and I want to buy things, but when I don’t have even a cent in my pocket, I get really sad,” Vagelakos said.

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