The ESM board on lessons from financial assistance to Greece

The lessons from the economic crisis of Greece showed that the financial aid programs were beneficial in “providing indispensable financial support to Greece following its loss of market access, and in preserving the integrity of the euro area,” despite the “considerable economic and social costs” to the country, the European Stability Mechanism (ESM) board of governors said.

Discussing an evaluation report on Greece by Joaquin Almunia, ESM’s board said that “the absence of the financial assistance would have resulted in a substantially costlier outcome both for Greece and the euro area, with unforeseeable negative effects.”

The board also said that “the financial assistance provided to Greece by the EFSF and ESM helped preserve euro area integrity, stabilise Greek public finances, and strengthen the institutional framework in Greece,” while they did underline the importance of social impact and long-term growth as well. They added that “the Greek economy’s resilience to shocks improved following the exit from the ESM programme,” that Greece left the financial assistance programs “with a stronger economy building on the fiscal and structural reforms implemented,” and recommended that the reform process continue for a sustainable growth path with higher employment and job creation.