It was, 12 years ago, to the day, when then PM George Papandreou announced from Kastelorizo the recourse of Greece to the support mechanism of the International Monetary Fund, putting the country in the memoranda and unleashing harsh austerity measures.
Contrary to the serene background of the beautiful island behind the prime minister, the announcement of the activation of the support mechanism would put the country in a great adventure of austerity and social unrest, which it had not experienced anything like it since the fall.
After the signing of the first Memorandum, salaries and pensions were reduced, companies were “locked in”, homelessness increased, while many depositors withdrew their money, either to take it abroad, or to cover permanent and ongoing needs.
The cost of living has risen due to a series of taxes on fuel, beverages, soft drinks, cigarettes, catering products. On the contrary, personal income has dropped, at the same time as citizens have been repeatedly called upon to pay extraordinary contributions.
End of an era for the IMF as a lender to Greece
This year, after 12 years – and after three memoranda cycles – the country “finished” with the IMF repaying in advance the remaining loan of 1.86 billion euros from the 1st and 2nd Memorandum.
“It closes a chapter that was opened in May 2010, with the application of Greece to the Fund, for financial support”, Minister of Finance, Mr. Christos Staikouras said a few days ago on the occasion of the disbursement of the amount to the IMF.
The Minister also noted that this is a very positive development, which sends a positive message to the markets about the financial situation of the country, strengthens the public debt profile and brings savings to the state budget, totaling 230 million euros, in favor of Greek society.
It is recalled that, in addition to the early repayment of IMF loans, Greece has pledged to participate a posteriori in the new lending program prepared by the Fund for countries facing fiscal programs. The program started in 2012 but Greece was absent due to the economic crisis. Now, Greece will pay its participation (approximately 1 billion euros) with a loan made by the Bank of Greece.
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