Greek business owner discusses euro crisis in 2012
Greece, once stricken by crippling EU debts, recently sealed its first 30-year bond deal in more than a decade. Marking the country’s steep change in fortunes since its money troubles, the bond issue, which raised €2.5bn (£2.1bn), outlines how Greece has rebuilt its access to public markets. This was after it became the centre of the eurozone debt turmoil that followed in the wake of the 2008-09 global financial crisis.
The country was plunged into its biggest economic crisis in living memory, with millions losing their jobs and income overnight.
Dimitra Nousi, a former civil servant and director of Athens’ Homeless Centre, in 2012 summed up Greece’s bleak position.
At the time, homeless numbers in the city had risen to 20,000, notwithstanding the country at large.
Ms Nousi told the BBC’s ‘This World, Michael Portillo’s Great Euro Crisis’ how in a short period of time she had gone from managing Greece’s wealth boom under the EU to managing poverty.
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She said: “The number has been going up in the last months especially because of the crisis.
“Only in ten months, it’s a shock.
“From the European Project, from ambitious breakthrough projects, to slices of bread for poor people.”
At the time of filming, the food centre was feeding 1,250 a day.
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Debate over who to blame for Greece’s crisis has raged ever since the crash.
While many accuse the country’s politicians for lack of foresight and a financial splurge, others point the finger at the EU – at the time under European Commission President of José Manuel Barroso – and, in particular, Germany.
Yanis Varoufakis, Greece’s former finance minister and a vocal critic of the EU, has argued that the bloc’s enabling Greece to borrow vast sums of money from German banks was the biggest driving factor behind the fallout.
During his 2018 Oxford Union address, he said: “Germany is the greatest beneficiary of the eurozone.
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“Between 2000 when the euro began and now – because effectively the euro is another form of the Deutsche mark, let’s not fool ourselves – the fact that the riff riff of Europe was part of the euro, of the Deutsche mark, it was out currency, the Mediterraneans, it kept the value of the currency low.
“That was a great boon to German exporters; the total net export surplus of German industry between 2000 and 2018 was €2.2trillion, which isn’t bad.
“Now, what do you do if you’re constantly in surplus with somebody? If you’re in surplus with someone it means you keep selling stuff to them.
“But, if I keep selling more stuff to you, then I end up with your money, and I don’t have anything to do with that money.
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“The result was a lake of euros accumulating in the banks of Frankfurt.
“The biggest nightmare of a banker is of money they are not lending – they don’t sleep at night if they have money and there is not enough demand for it.
“So what do they end up doing? Lending it to the Greeks, lending it to the Irish: What did Greece, Ireland, Portugal bring into the eurozone? We brought low levels of debt.”
The low levels of debt and relative economic stability, he said, provided lenders in Germany a market they could flood with money and credit.
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As Greece found itself at the epicentre of the crisis, it was forced to reach out to the European Central Bank (ECB) and International Monetary Fund (IMF) for help.
It was granted €110billion (£96.7bn) in loans bolted with interest rates.
Germany provided the largest sum, around €22bn (£19bn).
In exchange for the loans, the EU required Greece to roll-out crippling austerity measures and cuts to public funding.
Greece continues to pay back the sum, with its final scheduled instalment not until 2040.
Currently, 40 percent of those aged 15-24 are unemployed – the average for the same age group across the entire continent is just 14 percent.
Many believe the coronavirus pandemic and a blow to the tourism industry could reverse some of the progress the country has made.