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Year in review 2015: Greek crisis far from over

Athens pulled back from the brink of a euro-zone exit, but much turmoil remains.
Elderly people argue with a bank worker as they wait to be allowed into the bank to withdraw a maximum of 120 euros ($134) for the week in Athens. Emilio Morenatti / AP Photo
Elderly people argue with a bank worker as they wait to be allowed into the bank to withdraw a maximum of 120 euros ($134) for the week in Athens. Emilio Morenatti / AP Photo

There was a moment this past summer, as Greeks overwhelmingly rejected in a referendum the deal put on the table by their country’s creditors, when it looked likely that Greece would become the first country to leave the euro zone.

That never happened, and eventually the hugely indebted country was pulled back from the brink. But, not before causing huge damage to Greece’s economy, its confidence, and perhaps most important its relations with its European neighbours and international creditors. There are still major issues to solve.

For weeks on end in July, long lines formed outside banks as Greeks were restricted to withdrawing €60 (Dh240) a day, irrespective of how much money they had in their accounts. Businesses struggled to stay afloat (many didn’t), while demonstrators took to the streets in huge numbers either in support or against their country agreeing to the austerity measures demanded by international creditors in return for much-needed financial aid.

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There were angry clashes between protestors and law enforcement officers with Molotov cocktails thrown at policemen when emotions spilled over.

“It has been a very bad year for Greece, especially with the capital controls,” says George Ioannou, a professor of economics at the University of Athens. “The impact was bad, but maybe it was necessary for a reboot, and maybe that will come in 2016, but I’m not optimistic.”

The country’s third bailout since the financial crisis began ­– worth €86 billion and eventually agreed in August – came with a long list of conditions demanded by Greece’s creditors. These include tax increases and tougher spending cuts, likely to put further pressure on an economy already struggling and further estrange Greece from the rest of the euro currency bloc.

It is estimated that as many as 300,000 businesses have closed in Greece since the beginning of the financial crisis, while unemployment remains stubbornly high, with an estimated 1 million jobs lost since 2009. Public debt-to-GDP is estimated at 180 per cent.

“Would you risk it here as an entrepreneur or businessman?” one young entrepreneur asked me over the summer.

Following the third bailout, and the snap election that kept the Greek prime minister, Alexis Tsipras, and his Syriza Party in power, things have quietened down, but that is unlikely to last.

Last month, Greece’s government struggled to get the latest round of EU-mandated reforms approved by parliament, which included removing some protection for mortgage defaulters, with Tsipras having to rely on votes from the opposition. Street protests in some cities continue.

Greek and EU leaders have had to get used to mammoth negotiation sessions that often continue through the night as both sides try to find common ground. Relations are strained and at times have looked close to breaking. Rifts between the member states, further tested by the migration crisis, became a theme of the year.

For the country and its lenders, problems are likely to remain for years to come. For the Greek people, the situation appears more and more hopeless.

The year ended with yet another test: a bomb, believed to have been left by domestic guerilla groups, exploded in central Athens on November 24, causing damaging headlines but no injuries. It is a worrying sign for Greece, and is the first such attack since Tsipras came to power last January.

Kit Gillet is a freelance journalist based in the Balkans.

Updated: December 26, 2015 04:00 AM

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