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Greece completes massive economic bailouts, but crisis not over yet

By Ed Adamczyk
A Greek national flag and a European Union flag flutter in the wind as the Parthenon is seen on the Acropolis archaeological site in Athens, Greece. The Greek government borrowed billions from the EU as part of three large bailout programs that Athens has now completed. File Photo by Dimitris Michalakis/UPI
A Greek national flag and a European Union flag flutter in the wind as the Parthenon is seen on the Acropolis archaeological site in Athens, Greece. The Greek government borrowed billions from the EU as part of three large bailout programs that Athens has now completed. File Photo by Dimitris Michalakis/UPI | License Photo

Aug. 20 (UPI) -- After three years, the Greek government on Monday exited the last of three large emergency bailout programs -- a move that returns the country somewhat to normal economic footing.

The cash-strapped nation completed the third $71 billion program that was given in in 2015 in exchange for Athens agreeing to reduce spending and implement tough economic reforms.

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Greek Prime Minister Alexis Tsipras called for celebrations Monday to mark the end of of the bailout program, and praised citizens' strength in withstanding the eight-year economic crisis.

A total of $330 billion in loans was given to Greece in three installments from the International Monetary Fund, the European Central Bank and European Commission. Experts believe they will take decades to repay.

A record number of tourists in 2018, a 2 percent growth rate after a decade of declines, a modest improvement in the Greek unemployment rate and higher-than-projected surplus of government cash indicate Greece may have turned an economic corner. Because it has completed the programs, Greece can now borrow at market rates -- for the first time since 2010.

The rejoicing will be muted, though, because Athens continues to recover from a number of catastrophic and historic fires this summer that killed nearly 100 people.

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The economic policies required for the loans will remain in place for some time. In exchange for the loans, Greece agreed to reduce government salaries, freeze pensions and increase its retirement age, as runaway government spending was the cause of the country's fiscal problems. Many businesses closed and the Greek economy is now three-quarters its 2007 size, but the government went from a 15 percent budget deficit in 2009 to a 1 percent surplus last year.

While European banks and governments laud Greece for surviving its crisis, problems remain. The unemployment rate, at 19.5 percent, is the highest in Europe. Taxes have increased while salaries have fallen. Public services have deteriorated and Greeks are now accustomed to living under perpetual public and personal debt.

One in three Greek workers is a part-time employee. Additional pension reductions are scheduled for 2019 and taxes on low incomes will begin in 2020. Hospitals report shortages of staff and basic equipment. The devastating fire in July was amplified by inadequate communication between police and fire fighters, an example of the cuts in public services.

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