If everything goes according to plan, Greece will be without aid again for the first time in ten years next year. The rest of Europe is also up. An overview and overview.


Image: Euro coins as gears 

Greece is still facing painful reforms

For Greece, which has long been at risk of bankruptcy, the end of the financial crisis has never been so close. The economy is growing, new debt is falling and unemployment is also falling. In 2018, economic growth of 2.5 percent is expected. Unemployment is expected to fall to 20 percent by the end of 2018. Just two years ago, it was 25 percent.

In the heyday of the crisis in the summer of 2015, international financiers and Athens had agreed on the third aid package of up to
86 billion euros by mid-2018 agreed. In return, the country must implement a long list of austerity and reform measures. Tsipras, who was elected in January 2015 with the promise to defy the austerity measures, is now eager to meet all requirements as quickly as possible.

But the last reforms that Athens has to implement are very painful. The banks must devote themselves to the bad loans in their balance sheets. Homes and homes of debtors who do not pay could be confiscated and come under the hammer.

Debt and mass emigration

Athens still has a mountain of debt of about 180 percent of GDP. Tax increases, pension cuts, part-time, lack of prospects and emigration are reality. It is estimated that between 400,000 and 500,000 mostly young and well-educated Greeks have emigrated over the last four years.

Almost two-thirds of all Greek workers do not have a full-time job. Especially young people often work for less than 400 euros a month. Many of them are therefore on the verge of poverty and depend on the support of their families.

Elsewhere, things get better faster

Other former crisis countries such as the Republic of Cyprus are now off the hook. After the severe banking crisis of 2013, the island republic is back on track and can finance itself with its own resources. The rescue program was with a volume of only ten billion euros and much fewer editions, however, not comparable to that for Greece. When Spain left the bailout program in November 2013, the country had used just 40 billion of the originally approved 100 billion euros for the banking sector.

Four years later, the country is doing quite well again – even though the Catalan crisis is worrying. After the independence referendum in the strong economic region and the disempowerment of the regional government, the government in Madrid had corrected its growth expectations for the coming year from 2.6 to 2.3 percent in October. The unemployment rate in Spain had recently fallen to 16.4 percent, the lowest level in about nine years.

Generally good prospects

For the entire Eurozone, the prospects are at least at first glance as good as long. The EU Commission expects GDP growth in the 19 member states to reach 2.2 percent in 2017 and 2.1 percent in 2018. The currency area could provide the strongest economic growth in more than a decade. At the same time, the debt ratio – the ratio of government debt to GDP –
2017 to 89.3 and 2018 to 87.2 percent decline.

However, according to the EU Commission, the recovery is not yet on a firm footing. For economic growth, accompanying measures such as the ECB are still necessary, according to the Brussels authority. Even from the point of view of ECB President Mario Draghi, the eurozone is still dependent on the cheap money of the central bank.

Debt ratio in Italy is very high

Above all, Italy is worried about Italy. The country has the highest debt-to-GDP ratio in the EU at around 130%, and there are many bad loans on banks’ balance sheets. Should the Eurozone heavyweight seriously falter, the euro rescue fund ESM, which recently shouldered the rescue programs, could be overtaxed.

Against this backdrop, the reform debate on Economic and Monetary Union should gain momentum. One of the biggest controversy is the planned introduction of a common bank deposit guarantee system. Germany is banning itself, as the banks here in Germany fear that in case of doubt they will be held liable for institutions in other countries. However, many experts argue that even the distribution of liability risks on European shoulders would contribute to more security in future crises.

Chancellor Angela Merkel (CDU) last signaled at the Euro Summit in mid-December possible compromise. In the coming months, Germany and France also want to agree on common positions for the Eurozone reform. For Commission Vice-President Valdis Dombrovskis, the situation is clear: “We should not wait for the next crisis.”


Net loan amount Euro
Loan term 12 months 24 Months 36 months 48 months 60 months 72 months 84 months 96 months 108 months 120 months
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