The Greek recession is over. Figures released Nov. 14 show the Greek economy, which has shrunk every year since 2008, grew by an annual 1.4 percent in the third quarter.
The news represents a landmark for a country that has experienced one of the most savage recessions anywhere in the developed world over the past 100 years.
The combination of a global recession brought on by a crisis of confidence in the world’s financial institutions and Greece’s home-grown budgetary largesse has laid waste to an economy that was not so long ago basking in the glory of joining the euro and hosting the Olympic Games.
Following two multibillion dollar bailouts from its partners in the eurozone and the International Monetary Fund that were given on condition of harsh austerity, the Greek economy has shrunk by a quarter.
Attached are images of the momentous events surrounding the Greek economy’s descent as captured by photographers from The Associated Press.
The picture that emerges is of a country that’s suffered an economic shock similar in size to what the U.S. suffered in the 1930s. For the U.S., it took the industrial boom generated by World War II for it to recoup the economic ground lost during the Great Depression.
For Greece, it could take more than a generation. Were the Greek economy to grow a weak 1 percent per year, it would take around 30 years for it to get back to the size it was in the summer of 2008. At a more “normal” 2 percent rate, it could take 15 years.
That’s why the news has not been greeted by the popping of champagne corks across the country of around 11 million.
Plotting a path to sustained growth will be tough, especially at a time when much of Europe is stagnating. And because Greece cannot devalue its currency as a euro member, Greece will have to continue trying to become more competitive by keeping a lid on wages and costs — an agonizing “internal devaluation.”
Unemployment has sky-rocketed to over 25 percent, and remains above 50 percent among those aged 15-24. Poverty rates have swelled dramatically, health concerns are mounting and popular resentment is growing.
And to complicate matters, prices are falling, stoking fears of a debilitating bout of deflation, which chokes growth as consumers put off purchases in the hope of cheaper bargains down the line and businesses delay investments.
Budget restraint will remain the government’s priority indefinitely as public debt, at over 160 percent of annual GDP, is way above what is considered manageable. Recovery will depend on the private sector.
(PAN PYLAS and ANNE-MARIE BELGRAVE)