Greece will end its loan agreement in 2014 and become self-sufficient without any further loans, Greek Prime Minister Antonis Samaras announced. In his address on national TV channel, Mr Samaras said that Greece would once again enter global markets and become an ordinary and normal country in the new year. He added that exiting the bail-out agreement would be a giant leap for the country. Moreover, its debt will be officially declared viable, which means that the country will not need any extra loan contracts.
Greece initially asked the EU and International Monetary Fund (IMF) for financial help of more than 100 billion euro four years ago, but the value of the Greek aid package amounted to about 240 billion euro already in 2012, which is by far the most extensive bail-out in the eurozone. In the meantime, private creditors had to acknowledge the loss of about 50 percent of their agreement.
The end of the bail-out agreement does not mean that Greece could stop with its austerity measures, nevertheless it is hailed as a symbolic victory, which the country certainly needs at the times of its EU presidency, which Athens assumed on January 1. The country hopes that the presidency will help to enhance its rather poor reputation among Europeans. Moreover, Greece expects to resume a positive growth rate in 2014 by hoping to attain 0.6 percent after six consecutive years of recession and stagnation.
In contrast to the good mood of the Greek government, the country’s creditors are less optimistic as the IMF anticipates that Athens will need an additional 11 billion euro to repay its debt installations due this year. Also, the country’s economic output was lower by about a fourth compared to 2007, while the unemployment rate reached Europe’s highest – 27 percent. To make things worse, the Greek debt reached 180 percent, which is three times more than what is allowed by EU regulations.
The good news from Greece has been embraced by the rest of the European Union. Germany’s finance minister, Wolfgang Schaueble, said that the EU would stand by Greece as it goes on to run reforms of its public sector and labour market.
