Commentary Greece

Commentary: Greek recovery in sight

The electoral victory of the center-right New Democracy party in Greece may signal the beginning of a recovery in the country, but its huge foreign debt still looms large, Magyar Nemzet columnist László Szőcs writes.

After trusting them for a number of years, voters have turned against left-wing Syriza at the Greek elections on Sunday, after the party was unable to deliver on its promises of putting the country back on track.

Former Prime Minister Alexis Tsipras conceded defeat and the country is now led by Kyriakos Mitsotakis, who has something of an inherited right for the position. Those familiar with Greek political history will know that the American Kennedy and Bush families are nothing compared to the traditionally dynastic Greece, which has for a long time been led by the Papandreu, Karamanlis and Mitsotakis clans.

After having been propelled into leadership by a desperate Greek electorate after the 2009-2010 crisis, Tsipras will most likely only remain a footnote in history. When Tsipras took over, respectable senior citizens fought for cash at the ATMs, many people committed suicide and the youth left the country whose unemployment has reached Olympian levels.

The proven managerial qualities of Mitsotakis offer a modicum of hope that the condition of gravely ill Greece will not only stabilize, but possibly even begin a recovery in the coming years. Hopes are that a policy of tax cuts reduced red tape will give a much-needed boost to the economy, which is now burdened with a public debt of EUR 332 billion or 191 percent of its GDP, second only to Japan in the world.

The major difference, however, is that while Japan’s public debt is largely held by its own citizens, Greece is indebted to the outside world. To put the Greek debt into perspective: the EU considers acceptable a 60 percent debt to GDP ratio.

But the Greek crisis has also highlighted a major structural problem of the European Union, namely that its weaker economies are unable to sustain the burden put on it by the common currency. This is why neither Poland, nor Hungary are especially keen on joining the Eurozone anytime soon.

Title image: New Greek Prime Minister, Kyriakos Mitsotakis

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