Commission President Jean-Claude Juncker has told European Parliament that the Greek bailout programme, which ended last month, was a success and “Greece is back on its feet”. But the eight-year programme may have caused more harm than good and can hardly be called a success, argues Stavros Papagianneas.

Guest blog post by Stavros Papagianneas, managing director at StP Communications and the author of the book ‘Rebranding Europe’.

Despite the efforts of the EU and the Greek government to put a positive spin on it, it is hard to say that the austerity programme has been a success.

On 20 August, Donald Tusk, president of the EU Council tweeted: “You did it! Congratulations to Greece and its people on ending the programme of financial assistance. With huge efforts and European solidarity you seized the day.”

In contrast, writing in the Washington Post on 3 August, Matt O’Brien, a former senior associate editor at The Atlantic, noted that “Greece has been one of the biggest economic failures you’ll ever see, short of a war or revolution. What Europe calls a success is an economy that has shrunk so much it looks war-torn”.

Under the supervision of the troika (EC, IMF, ECB), Greek GDP shrank by 26% – a decline comparable to the current crisis in Venezuela and during the Great Depression in the 1930s. Greek debt rose from 110% in 2010 to 179% today.

Many enterprises have closed down and senior citizens saw their pensions cut. Household incomes fell by over 30%, and more than a fifth of people are unable to pay basic bills like rent and electricity.

The unemployment rate also rose: from 12.7% in 2010 to 27.5% in 2013. Today it is 21%. Not because the economy is better, but because highly educated young people leave the country in big numbers and disappear from the statistics.

Around 427,000 young, educated professionals – a group with more than 50% unemployment – have left the country. The population is ageing much faster than the EU average.

During my last trip to Greece, I spoke with young adults who struggle between staying unemployed, doing low-paying jobs or leaving the country. I wanted to know what it’s been like to grow up in these depressing circumstances and what their perspectives are for the future.

Konstantinos Psillas, 27, told me his parents had lost their jobs. “I had to work while I was studying and couldn’t participate in university programmes such as Erasmus. I feel that I am enslaved in a life of austerity without having made any mistakes myself”.

Other young Greeks shared similar stories. If they had the possibility to send a clear and loud message to EU leaders, the young people I spoke with would say that Europe needs to be revised.

The EU has lost its meaning. Austerity has killed the hope of many citizens for a better future. What was supposed to be a Union of principles, peace and equality brought impoverishment.

That millions of Greeks find themselves on the brink of poverty and social exclusion has been widely documented in recent years. They have paid heavily for the recovery programme. However, fighting a crisis in such a way was a monumental mistake.

Putting the burden on the weak countries already suffering from high unemployment and low growth rates led to more unemployment and slower growth. If we add the state’s incapacity to reform then we have the perfect storm.

The blind belief in austerity measures and the inability of Europe to cope with major crises, like those of the euro and the refugees, with a coherent and united voice are leading to further disintegration of the European project.

The economic pressure in Europe has stimulated racism and populism. No wonder that politicians like Salvini, Le Pen, Wilders and Orban are so popular.

The primary disruptive element of the EU is its structure. Originally built to become a real federation with its own institutions, it was rerouted by Paris when the French parliament rejected the creation of the European Defence Community (EDC) in August 1954.

At present, the EU is a free association of sovereign states designed to co-operate to achieve their shared aims. As such, the EU will implode if it doesn’t create federal European structures based on a real constitution with a strong parliament and a real government.

The citizens want a Union that is in a position to handle the big crises we are facing today. The EU needs to be reformed and we need it now.

Author : Guest contributor
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