Michael Portillo on Greece’s ‘rigged’ finances when entering euro
Top eurocrats hailed the apparent “enormous benefits” Athens has received since joining the bloc in 1981. But experts and insiders hit back, insisting that membership of the EU’s single currency bloc has been massively damaging for Greece. Yanis Varoufakis, who served as finance minister during the country’s debt crisis in 2015, said its economic growth in the 20 years prior to joining the EU had “outperformed the 1981-2010” period”.
He added: “Public debt skyrocket after our entry in the European Economic Community and, then, spare a thought for the 2010-21 tragedy that followed.”
In 2015, Greece was forced to submit to a programme of extreme austerity in order to secure a bailout after its finances spiralled out of control.
The EU, Germany and the International Monetary Fund agreed to pump funds into Athen’s ailing economy as long it stuck to a series of deficit and spending targets.
At the time, Berlin even pondered temporarily kicking Greece out of the Eurozone in order to save the rest of the single currency area from collapse.
The enforced fiscal rules have created a lot of ill-feeling towards the EU amongst the Greeks, who have been left to stomach the massive cuts forced upon their government.
Yanis Varoufakis laments Greece’s EU membership on 40th anniversiary of joining bloc
Yanis Varoufakis is a former Greek finance minister
European Council President Charles Michel last night paid tribute to Greece’s membership of the EU in a social media post.
He said: “Since you, Greece, formally joined our common Europe, which had always been yours, you have known the best years in your history.
“They have permanently put you on the path to peace and prosperity.”
Mr Michel was branded ignorant by Mr Varoufakis, who replied: “Your ignorance of our history is forgiven.
“Why should you know, for instance, that our growth rate was far greater, and that our democratisation deeper, before we joined the EEC?
European Council President Charles Michel
“It is the slavishness of our PM, watching you speak, that will remain forever unforgiven.”
Speaking at an event to celebrate the 40th anniversary of Greece’s accession to the EU, Greek Prime Minister Kyriakos Mitsotakis said the decision to join the bloc had enriched both sides.
He claimed the country’s EU membership is a non-negotiable aspect of its identity.
In a video message, European Commission president Ursula von der Leyen said: “The Union gains an enormous benefit by having Greece in its nucleus.”
She said Athen’s vaccine programme has been an “object of envy for many other countries”.
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Greek PM Kyriakos Mitsotakis
The Brussels boss also attempted to underline the many apparent benefits of EU membership enjoyed by Greeks, including free movement, large scale investment and the subsequent quality of life.
Pieter Cleppe, editor of the Brussels Report website, said Greece’s decision to join the EU had been a “good idea” but its membership of the Eurozone a “terrible idea”.
He told Express.co.uk: “For Greece, it was a good idea to join the European Union, but it was a terrible idea to join the Eurozone.
“The EU did not only offer it a stable home in a family of Western democracies, EU trade facilitation and reduction of trade barriers also offered good economic opportunities.
“A downside however was the transfer of massive EU funds that have been promoting cronyism in Greece for decades now. Better motorways are a good thing, but not if they come at the expense of fuelling the corruption that is holding economic development back.”
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Greek citizens, however, have suffered massively from Athen’s decision to join the EU’s single currency bloc, Mr Cleppe added.
He said the decision has meant Greeks have been saddled with massive debts as a result of the move.
“Greek membership of the eurozone, which is a bad mistake, should be seen as yet another big transfer from Northern Europe to Greece,” he said.
“The euro enabled the Greek government to saddle Greek citizens with more debt than would have been possible with a national currency – due to the fact that Greek banks became able to receive liquidity from the European Central Bank and that currency debasement at the Eurozone level can go much further than at the national level.
“In this way, eurozone savers – most of whom reside in wealthier eurozone member states – were being expropriated to finance government spending by eurozone governments.
“When things went awry and the Greek state was no longer able to refinance its debt, taxpayers and once again savers were asked to bail out Greece with multi-billion euro bailout schemes, both openly, through democratically approved emergency bailout funds and secretly, through the actions of the European Central Bank.”