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Marketplace Morning Report

Greece emerges from bailouts, but Greeks remain skeptical

Stephen Beard Aug 14, 2018
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In this photo illustration, a one euro coin stands on a map of Greece showing the city of Athens.
Sean Gallup/Getty Images

Next Monday, Aug. 20, is a red-letter day for the European Union. It’s Bailout Exit Day for Greece. The eurozone’s most heavily indebted member state will formally leave the program of financial support set up initially in 2012 when the cash-strapped country found itself unable to borrow in the markets at reasonable rates of interest.

International investors were shunning Greek government bonds for fear the country would default.

Over the past eight years, under three bailout programs organized by the European Union and the International Monetary Fund, Greece has borrowed more than $260 billion at rock-bottom interest rates.

But now, the country’s creditors believe it is able to finance itself in the financial markets.

“This is an historic moment. This is a new page, a new chapter. I’m quite optimistic, and I’m sure that we will be successful,” Constantine Michalos, head of the Athens Chamber of Commerce, told Marketplace.

The Greek government was even more effusive. 

“The crisis is over. The Greek people can smile again,” a government spokesman said. 

The European Union hailed the exit as a “turning point.”

But few ordinary people in Athens share that enthusiasm. Few seem to believe that the country is ready to stand on its own two feet or that Bailout Exit Day will be a new beginning.

“It’s just a day like any others. It won’t make a big difference to me,” said Christos Mavrou, a sales manager for a household goods manufacturer.

“It’s a joke. Let’s be honest here. Nothing has really changed,” said Nikos Voglis, boss of a sandwich bar in the center of the city.

“I don’t think any average person, normal citizen will celebrate this. There’s nothing to celebrate. We’re not doing any better. It’s a joke. It’s a joke,” laughed Spiros Kontogiannis who runs a flower shop underneath the parliament building.  

Despite their skepticism, the Greek economy has improved since the darkest days three years ago when the country almost crashed out of the eurozone. The economy, having shrunk by more than a quarter since 2010, is now growing at almost 2 percent a year. As a result of big public spending cuts and higher taxation, the government’s finances are in better shape and unemployment, which hit 28 percent, has fallen to just over 20 percent.

But the benefits of this fairly modest recovery are barely filtering through to the general public. Kontogiannis is complaining even though his shop is still open.

“I’m still open because I have no employees. Which means I do everything. I’m only marginally profitable, I would say. And if consumption goes down, I don’t think I will survive,” he said.

Ten years of crisis and eight years of austerity under the bailout programs have battered the country’s confidence and sapped its happiness. Copywriter Fotis Mantelos is keenly aware of the gloomy national mood.  

“You barely see people who are really, really happy. You know, we have such a beautiful country with the sun, but we’re not enjoying ourselves that much. Because everybody, in the back of their minds, has this miserable thing that always keeps us behind and not happier about our lives,” he said.

When Marketplace first interviewed Mantelos six years ago, he was scraping by on meager, erratic wages from part-time work, and he was still living with his parents. Things are better for him today. He now has a steady job in advertising and can afford a place of his own. But wages in Greece have fallen by a third over the last decade and Mantelos can’t afford much else beyond the rent

“I’m still trying to scrape by,” he admitted. “For example, I don’t have a car. I can’t afford to have a car now. I’ve moved on since the crisis, but I’m not a happier person.”  

The same is true of Oliana Spiridopolous and her husband, Yiannis Spiliotakis. Their company, Starbags, which sells and rents designer handbags, is faltering. Business was brisk in the early part of the downturn as Greeks strove to keep up appearances, but, Spiliotakis said, even renting a bag for 80 bucks a night, let alone buying one for many hundreds of dollars, has lost its allure.

“People are not as happy as they used to be, and if your everyday existence is not really as good as it used to be, you don’t want to spend that kind of money. You just don’t want to do it.” he said.  

He doesn’t believe that Bailout Exit Day will restore consumer confidence. Rather the opposite. 

“Greeks are weird, you know. As soon as you let them do their own thing, they just go and screw everything up. What can I tell you? We’re not very good at looking after our own affairs,” he laughed.

That’s not what Greece’s eurozone partners want to hear. They hope that Bailout Exit will herald a fresh start for the currency bloc’s most notorious backslider.

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