Greece’s Ordeal Is Far From Over

Only genuine debt relief can ensure it won’t be back in crisis.

August 20, 2018

Greece reaches an important milestone today: After nearly nine years of crisis, brutal austerity and political turmoil, it’s exiting what is supposed to be the last of three bailout programs. If only it weren’t doing so with Europe’s largest debt burden.

Europe’s leaders are understandably eager to be done with an embarrassing episode. The debt crisis that began in 2010 highlighted not only Greece’s financial mismanagement, but also how Germany, France and other core countries allowed their banks to enable it. Bailing out Greece was an act of political sleight of hand: It indirectly saved the banks, while putting the onus on the Greek people.

Miraculously, Greece survived. The federal budget is in surplus, and the economy is growing again after one of the deepest recessions ever. But it’s also stuck with the bill: more than 240 billion euros in official debt, which together with private debt brings the government’s total burden to more than 180 percent of gross domestic product.