Since Monday the leaders of the European Union have been celebrating, writes Dag Daniš. Greece is successfully leaving the financial assistance programme and starting to finance its activities independently, through market loans.
A few politicians and the media are reporting that the latest events are proof that the programme, which resulted in shared guarantee for the Greek debt were effective. According to these views the skeptics who criticized the approach of the Eurozone and the ability of the Greeks to pay their debts were incorrect. This view is false, the reality is different.
Greece is not leaving the economic adjustment at all, it simply finished one of its chapters and started another. In the new era the fourth, fifth, tenth assistance programmes of the member states should not be coming, the market is overtaking the task of financing the country. This is the formal end of one important phase, but Greece stays in the emergency mode with constructed conditions up to the year 2060, when it repays the last financial portion guaranteed by the member states of the Eurozone, including Slovaks.
The country is rolling over debts, old loans are being paid by new loans and refinancing. Greece is unable to pay everything even to the countries of the Eurozone. A big part of the missing sum needs to be written off. Which is exactly what the skeptics warned of, the Greek debt is affecting the other member states. This is a partially controlled bankruptcy of a country, what the Eurosceptic and realist branch was trying to achieve decades ago. After 2009 the Greek case should be solved by a controlled bankruptcy.
In 2009, Greece recorded a debt of EUR300 billion equivalent to 130 percent of the Gross Domestic Product. After the rescue programme this proportion went up to 180 percent and the economy was shrinking. One project became three. To sum it up the rescue efforts resulted in three outcomes. The debt was raising, the economy crippled and the holders of the risk are the Eurozone member states instead of the financial institutions, which were simply investing badly.