The political crisis in Paris has served to demonstrate the “astonishing success of Eurozone bailouts”, according to a ‘Financial Times’ opinion article by Chris Giles published on Wednesday.
According to a press release from the Greek national economy and finance ministry, the article notes the decline in borrowing costs for Greece to French levels and says the “bloc’s periphery” shows the value of steady reform.
“When Greek government borrowing costs fell below French levels late last month, attention focused on the political turmoil in Paris. There is no doubt that the fall of the government after its inability to set a budget demonstrates dysfunction in Paris, but the real story lay elsewhere. It is the astonishing success of what we have derogatively called the Eurozone’s ‘periphery’ a decade or more after its sovereign debt crisis,” the article noted.
The article also adds that “this story of success in Greece defies all the doomsayers and hotheads of 2015, when the country briefly flirted with leaving the euro under its populist-left Syriza government.”
Instead of “suffering in ‘debtors’ prison’, condemned to the permanent austerity and poverty,” as had been forecast by the 2015 Greek finance minister Yanis Varoufakis, the Greek economy “has not only grown much faster than the Eurozone average, it has also been able to run the primary budget surpluses demanded by its creditors under its bailout plans,” the article adds.
“Just last month, the Greek government repaid part of its debts under an early bailout programme from 2010 because its investment-grade status allowed it to borrow more cheaply in financial markets,” it pointed out.
The author cited IMF data showing that GDP per capita has grown more than 11% in Greece and by sizeable amounts in other bailout countries, compared to just 2% growth in France and negative growth in Germany. He concluded by highlighting the value of solidarity across Europe and by noting that France and Germany must now submit to the same reforms as those imposed on bailout countries:
“The difficult and quiet success of the economic reforms since [the crisis a decade ago] tends to pass people by. But it is now undoubted in Europe’s ‘periphery’ and time for France and Germany to practice the medicine they so enjoyed prescribing a decade ago,” Giles wrote.
