The Aftermath of the Economic Crisis in Greece


The economic crisis in Greece resulted in a long and complicated system of bailouts and austerity measures which plunged millions in poverty. Unemployment and food insecurity skyrocketed as the economy contracted. The consequences of the crisis are still tangible and will continue to shape the lives of the country’s people for years to come.

The Crisis and Bailouts

Greece has had a turbulent past with the Euro ever since its adoption, but the global financial crisis of 2008 hit the country hard, resulting in insolvency. The extent of Greece’s trouble was revealed in 2009: its budget deficit was exceeding 12 percent of GDP. In 2010, Greece took their first bailout; in the decade that followed, the country had to adopt strict austerity measures directed by the EU and the IMF. Greece’s financial problems threatened to affect the entire eurozone.

On August 20, 2018, Greece took its third and final bailout. It seems that the danger has passed and many are now eager to turn a new page. In 2017, Greece’s economy grew by two percent. However, the country still has the highest debt in Europe: roughly 290 billion euros or 180 percent of its GDP. Unemployment is still high at 20 percent. More concerning is the fact that unemployment among the youth population is even higher, driving many young people out of the country. Greeks are still struggling to recover from a crisis that has been almost as painful and traumatic as the Great Depression in the United States.

The Support System

The economic crisis in Greece sent numerous middle-class households into poverty. Soup kitchens became filled with people who could no longer afford to provide for themselves. While struggling with the increased number of people to feed, soup kitchens across the country became the source of hope for people with no income. Food insecurity became a serious issue, and more than half of the 16,000 Greek families surveyed were suffering from food insecurity and child malnutrition and hunger rose exponentially. A 2014 report by UNICEF stated that child poverty rates in Greece have risen to over 50 percent since 2008.

The Stavros Niarchos Foundation is an organization which lent a hand to the increasing number of people living in poverty. The private organization gives grants to NGOs in different spheres, including social welfare and health. To help Greece, Niarchos Foundation established an emergency grant program: the Initiative Against the Greek Crisis. It was split into two programs, the first running from 2012 to 2015 and the second from 2015 to 2016. The grants, both around $90 million, were distributed primarily to social welfare and health sectors, with the remainder going to arts and education. The foundation aimed to alleviate social exclusion and provide food aid, temporary housing and healthcare to underprivileged groups. A Deloitte report reviewing the initiative found that more than 3,000 jobs were created or sustained.

Another approach to helping people in need and coping with the economic crisis in Greece emerged. Across the country, people began putting up walls of kindness: places where they hung items of clothing or left other products to be picked up by those in need. Clothes with the words, “If you don’t need it, leave it. If you need it, take it,” were hung up on walls along well-traveled routes, aimed to help homeless people during the winter. In addition to clothing, racks with food were left for people in need as well. These walls of kindness, each with its own Facebook page, started appearing in roughly 50 large and small cities throughout Greece.

A Personal Look at Post-Crisis Conditions

Giorgos Semkos is a resident of Thessaloniki, the second largest city in Greece. In an interview with The Borgen Project, Semkos shares, “During these years there is not a significant change to the situation. We have just adjusted to it.” He is echoing many who say that there is not much to be optimistic about. According to a 2017 Hellenic Statistical Authority survey, more than a third of Greece’s population – 3.7 million people – are at risk of poverty or social exclusion. The number has decreased from 2016 but remains dangerously high.

“The situation is not better. We are just used to it. We are now used to getting 500 euro per month compared to 800 euro some years ago,” says Semkos. What he calls a bitter but true fact is that the ongoing refugee crisis actually helped to reinforce the Greek economy. “A lot of money came into the Greek market to buy stuff for support of the refugees. If there wasn’t the refugee crisis, things in Greece would be much worse. It is sad to say, but true for me.”

Greece has not recovered yet, and according to data from the IMF, the country may not return to its pre-recession economic peak until 2030. In its latest report, the Organisation for Economic Co-operation and Development lists reducing poverty, improving workers’ skills, boosting employment and improving job quality as key recommendations for Greece’s recovery.

– Aleksandra Sirakova

Photo: Flickr


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