The European Commission announced on Wednesday that it was ending years of surveillance of Greek government spending. The move marks a formal end to a major crisis that threatened Greece’s expulsion from the euro currency group, inflicted dire hardship on its citizens and sent global financial markets into turmoil.
The commission, which oversees the budgets of the 27 EU member countries, said it would launch its “enhanced surveillance” program on the 20th euro area.
Greece was granted billions of euros in three consecutive bailouts after 2010, when Athens lost access to international bond markets after it admitted to misreporting key financial data. Greece’s debt rose to over 180% of GDP.
Two of the financial bailout packages ultimately failed to bring enough relief, although creditors in the Eurogroup demanded – and received – deep economic reforms that hammered citizens with austerity measures, including repeated tax hikes and pension cuts. Poverty and unemployment skyrocketed, and at one point about a quarter of the labor force was unemployed.
In 2015, then-Left Prime Minister Alexis Tsipras jeopardized his country’s membership of the eurozone and ultimately the EU by calling a referendum on whether Athens should accept the terms imposed on it by its creditors, led by Germany. Voters rejected the terms, but the government then imposed draconian terms demanded by creditors anyway.
But on Wednesday, the EU Commission said that now “as a result of Greece’s efforts, the resilience of the Greek economy has improved significantly and the risks of spillover effects on the euro area economy have decreased significantly”.
“With this development, together with the early repayment of loans from the International Monetary Fund … a difficult chapter for our nation after 12 years ends,” Greek Finance Minister Christos Staikouras said in response to a letter from the Commission confirming that the strengthened surveillance would end.
Staikouras said the move strengthens Greece’s position in international markets. The government hopes to return to investment grade by next year.
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