Greece 'a normal country' as bailout ends

Athens' finances will remain under the watchful eye of Brussels for decades to come. Photo / Getty Images

Greece completed eight years of European Union-enforced bailout torture on Monday but Athens' finances will remain under the watchful eye of Brussels for decades to come.

Pierre Moscovici, the EU's commissioner for economic and monetary affairs, said that after a "deep" and "violent" crisis, Greece was now a "normal country again", even though it will still be subject to an "enhanced surveillance framework" that begins on Tuesday.

The surveillance, which is more draconian than the fiscal rules adhered to by other Eurozone nations, is meant to ensure that future Greek governments stick to their reform commitments. For example, Greece has agreed to keep a budget surplus until 2060, binding the hands of future governments.

The country received tens of billions of euros to fix its economy and prevent it crashing out of the euro but at the price of heavy austerity that saw pensions slashed, public sector jobs cut and huge tax increases.

Greece has been provided with €288.7 billion ($498.9b) in loans since 2010, including €256.6b from the EU and €32.1b from the International Monetary Fund.

The loss of a quarter of Greece's national output over eight years, the net emigration of some 180,000 people since the crisis, and current unemployment of about 20 per cent give Greeks little reason to celebrate their exit from a third bailout programme, despite some growth in employment and the economy and a budget in trade surplus.

Moscovici, a former socialist finance minister of France, said that such a surveillance framework was "significantly different" than the three bailout programmes endured by Greece since 2010.

He revealed that Greek reforms would be scrutinised four times a year. Two of those inspections would take place as part of the EU's regular overview of national budgets to minimise embarrassment.

"The commission wants to make it really respectful of Greece's sovereignty," said Moscovici, who insisted that Greece was now free from outside influence to once more to direct its own financial policies.

"Let's not imagine that no discipline is needed, no reforms are not needed," he added in defence of the continued surveillance, before pointing out that Greek public debt remained about 180 per cent.

Moscovici lashed out at the "false idea" that the EU was responsible for the austerity that has crippled Greece.

"There is great emotional solidarity we all feel with the Greek people who have been the victims of this crisis," he said.

"I don't feel like I am a cold man imposing austerity from the outside," he added, "If Greece had left the euro, the situation would have been much worse and the adjustments would have been much harder."

"The conclusion of the stability support programme is good news for both Greece and the euro area. For Greece and its people, it marks the beginning of a new chapter after eight particularly difficult years. For the euro area, it draws a symbolic line under an existential crisis," he said.

The extensive and painful reforms Greece had carried out had laid the groundwork for "a sustainable recovery", he added.

Greek Prime Minister Alexis Tsipras has said that Greece can start focusing on a "social state".

"Now we have the opportunity to proceed with targeted relief, to proceed with tax reduction in 2019 and to support the social state and welfare," he said.

Jean-Claude Juncker, the president of the European Commission, said: "I have always fought for Greece to remain at the heart of Europe."

Donald Tusk, the president of the European Council, tweeted: "You did it! Congratulations to Greece and its people on ending the programme of financial assistance. With huge efforts and European solidarity you seized the day."

In June, European leaders struck a deal on Greek debt relief, allowing Greece to put off the repayment of nearly €100b of debt by a decade, equivalent to 40 per cent of the debt that it owes the eurozone.

Christine Lagarde, managing director of the IMF said the institution still had "concerns" about the long-term future of Greece after the deal was struck.