From 2010 to 2018 Greece lived on three loan programmes agreed with eurozone countries and the International Monetary Fund. In return it had to apply heavy austerity and reforms, set out in documents called memoranda.
The three programmes
| Programme | Year | Lenders | Amount disbursed (approx.) |
|---|---|---|---|
| First | May 2010 | Bilateral eurozone loans (GLF) and IMF | €73 billion |
| Second | March 2012 | European Financial Stability Facility (EFSF) and IMF | €154 billion |
| Third | August 2015 | European Stability Mechanism (ESM) | €62 billion |
The second programme was accompanied by the PSI, the voluntary write-down of privately held debt, worth about €107 billion. See the 2009-2012 crisis.
The conditions
Each tranche was released only after regular reviews by the creditors. Main measures included:
- cuts to public wages and pensions and fewer public employees;
- higher VAT, excise duties and property tax;
- labour market and pension reforms;
- privatisation of ports, regional airports, energy companies and public land;
- primary surplus targets, a budget surplus before interest payments.
Debt relief
Rather than cancel the debt, European creditors made it much lighter: low interest rates, long grace periods and maturities stretched into the 2070s. At the 2018 exit a further ten-year deferral on part of the EFSF loans and a cash buffer were agreed. Thanks to the recovery, Greece repaid all its IMF debt early in 2022 and part of the bilateral loans from the first programme.
An assessment
| What worked | What did not |
|---|---|
| Greece stayed in the euro and avoided a disorderly default | Austerity deepened the recession far beyond forecasts |
| The deficit was eliminated; the budget is now in surplus | GDP fell by a quarter and unemployment topped 27% |
| The debt is sustainable thanks to low rates and long maturities | Hundreds of thousands of young people emigrated |
| Reforms to public administration and taxation | The IMF itself admitted mistakes in its initial assessment |
See also the 2015 crisis and the Greek economy today.