Greece celebrates as EU fiscal oversight ends

Greece on Saturday ended 12 years of fiscal surveillance by the European Union that was imposed in exchange for bailouts after a crushing debt crisis.

European Commission President Ursula von der Leyen wrote on Twitter that "thanks to the determination and resilience of Greece and its people, the country can close this chapter, and look to the future with confidence."

Greek Prime Minister Kyriakos Mitsotakis called August 20, 2022, a "historic day for Greece and all Greeks."

The formal end of "enhanced surveillance" by European Union creditors means the country will no longer face a quarterly review of its public finances to receive debt relief payments.

Nonetheless, Greece will continue to face scrutiny from its creditors as it repays its debt. In the case of Greece, it will take another two generations before the last loans are due for repayment in 2070.

New prospects for Greece

Ending the oversight gives Mitsotakis' center-right government greater freedom over the budget. It will also strengthen Greece's international market position by increasing its attractiveness to investors at a time when all of Europe is grappling with the crisis triggered by the Russian invasion of Ukraine.

"A cycle of 12 years which brought pain to citizens, led to economic stagnation and divided society," has now ended, Mitsotakis said in a statement. "A new horizon filled with growth, unity and prosperity emerges for all," he added.     

According to forecasts by the European Commission, the Greek economy will grow by 4% this year, significantly faster than the eurozone average of 2.6%.

However, Greece's unemployment rate is still one of the highest in the monetary union, its minimum wage one of the lowest and the country's debt is currently at 180% of its gross domestic product.

Legacy of 2009 financial crisis

In November 2009, Greece announced a sharp increase in its public deficit, which ushered in a eurozone-wide crisis and devastated Greek finances for a decade.

In order to prevent Greece from leaving the eurozone, a "troika” made up of the International Monetary Fund, the EU and the European Central Bank demanded far-reaching reforms from Athens in exchange for €289 billion in bailout funds.

The reforms included deep government spending and wage cuts, tax hikes, privatizations and other sweeping reforms aimed at putting public finances in order.

The Greek economy shrank by more than a quarter, unemployment rose to almost 28% and skilled workers emigrated in droves.

dh/dj (AP, AFP, dpa)