And that was a question asked almost three years ago and still the debt remains unresolved.
Greece is one of the most renowned ‘victims’ of the economic decline that hit the world markets in the early part of this century.
Amidst ever increasing taxes, government spending cuts and other aggravating national reforms that heralded general civil unrest, riots and protests the IMF, ECB and Eurogroup all intervened with attempted bailout loans as part of Economic Adjustment Programmes.
Notably, between 2008 and 2014 the Greek GDP had fallen by 26% and the government’s capacity to repay its creditors was drastically reduced.
Then on 30th June 2015 Greece became the first so-called developed country to default on an IMF loan repayment.
The gravity of the situation was felt not just economically, with the higher taxes and resulting tax evasion/avoidance, but also socially through mass unemployment and a severe increase in the number of homeless and those unable sustain themselves on a daily basis.
Since then Greece has seen frequent changes to the political leadership and an ever increasing implementation of so-called austerity packages (thirteen to date!) none of which have proved popular with the nation - let’s face it if you were a Greek farmer would you be happy, let alone be able to survive, after an enforced diesel fuel tax increase of 5,400%!
Most recently the Greek Finance Minister, Euclid Tsakalotos, alleged that the Greek authorities were now firmly focussed on an exit from the ongoing bail-out programme and not an extension of it; this strategy is hoped to be finalised by August 2018!
He also added that (as to be expected) the “EU monitoring missions would probably be more frequent than the twice - yearly assessments that are standard in post-bailout countries. It is likely to be a case of three or four visits instead of two.”
So what are the options for the future of Greece? Latest analysis hints that any realistic potential debt relief is also likely to include a mechanism to link debt repayments to the rate of Greek economic growth — a so-called Growth Adjustment Mechanism.
Given the recent and ongoing Greek economic history this, or indeed any other strategy, is not something I for one would be prepared to speculate on the success of.
It’s very much a case of watch this space and don’t hold your breath in the meantime. Or as the Greeks say, they seem to still be caught between Sculla and Harybdis - a rock and a hard place!
