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Greece

Yearbook 2015

Greece. The lingering economic crisis paved the way for a turbulent year. The traditional political establishment was voted off and tough negotiations with international lenders were conducted - but in the end, the government was still forced to agree on tough loan conditions to obtain continued support from abroad.

2015 Greece

According to COUNTRYAAH, a new election was held at the end of January, after Parliament failed before the New Year to elect a new president. The result was a big victory for the left-wing Syriza party, which went to elections to pledge to cut decisions on cuts and renegotiate aid terms. Syriza, which was merely a mandate from its own majority, formed government with the small right-wing populist party Independent Greeks. Syria's 40-year-old leader Alexis Tsipras became prime minister, the country's youngest prime minister of modern times.

The new government halted ongoing privatizations and reintroduced social benefits and demanded renegotiation of the aid programs concluded with the so-called troika: the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF). The government ended up collision course with the rest of the EU, which on the whole had a cold attitude towards the requirements for loan relief and debt amortization. Throughout the spring, a tug of war between the government and actors in the outside world continued.

In early June, Greece postponed an expected payment to the IMF, in protest of new austerity requirements. The tone was sharpened and, from the EU side, more and more warnings came that Greece was in danger of leaving the euro zone. People began withdrawing money from savings accounts to such an extent that the banking system threatened to collapse. Intensive negotiations were brought in last, before a deadline expired on June 30, when a large payment would be made to the IMF as a condition for Greece to receive new money. Then, in an unexpected play, Tsipras announced a referendum on the lenders' demands - even though the negotiations were not concluded and thus it was unclear what the vote would mean. The crisis caused all banks to close and a limit of 60 euros a day was introduced for withdrawing from the ATM.

The government supported the downside - against austerity and tough lending conditions - which won convincingly by 61% in the July 5 referendum. Shortly thereafter, the uncompromising and unconventional finance minister Yanis Varoufakis resigned, who, among other things, accused the lenders of "terrorism".

The banks opened again after three weeks, but restrictions on withdrawal rights existed. The stock exchange closed for five weeks in connection with the crisis, which hit hard on the already weak economy. The cautious growth that had started at the beginning of the year was halted and the economy shrank again. It would also turn out that the referendum was a blow in the air - the lenders were pushing hard against hard and soon it was clear that Greece would have to agree on at least as tough conditions as had previously been set in view. In mid-August, Parliament voted for a third five-year package of EUR 86 billion, linked to promises of continued cuts and structural reforms.

The settlement created tensions within the government and led to another election held on September 20. Despite the disappointment of the development among many voters, Syriza won again and Tsipras was able to re-form government with Independent Greeks. However, almost half of the electorate stayed at home, and later a strike was announced for the first time against the left government's austerity policy. Growth for the year was estimated to be zero.

Greece played a key role in the refugee crisis that escalated during the year, with its strategic location between the rest of Europe and the Middle East. In the fall, thousands of refugees landed every day on Greek islands where dramatic scenes took place many times. In October alone, there were more than 200,000 people. Most people went north as soon as they could.

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