07 June 2018

Greeks hope for
an end to austerity
later this summer

The Greek flag flies beside construction work on new apartments in Rethymnon … but is the economy beginning to recover? (Photograph: Patrick Comerford, 2018)

Patrick Comerford

Tourism has helped to cushion many parts of Crete against the worst effects of the economic crisis that began in 2010.

The height of the tourist season has yet to arrive, and Greece is expecting 32 million visitors this year, more than double the number in 2010 (15 million) and five times the number 10 years ago.

This increase in tourist figures is a boost to the economy, but many people here are now questioning how long this can continue to be good for Greece, and whether these patterns are sustainable.

Although one in five Greeks work in the tourism sector, many people are beginning to wonder about the impact of tourism on the Greek infrastructure and even on the Greek way of life.

Commentators and journalists are saying that after a decade of economic pain, Greece appears to be back on track, although it still faces challenges. The Financial Times reported earlier this week that after eight years, the era of international financial rescue programmes for Greece will draw to a close in August.

Greece is expecting to leave an eight-year dependency on international financial bailouts in August and to repay those debts. Growth is showing some signs of a rebound, and the Prime Minister, Alexis Tsipras, has even declared a recovery. Speaking earlier this week, he said Greece intends to wind up the fourth review of the country’s third bailout in time for the meeting of eurozone finance ministers a fortnight from now [21 June].

Economic growth is expected to reach 2% this year [2018], 2.4% in 2019, 2.3% in 2020, 2.1% in 2021 and 1.8% in 2022. At the same time, the country’s unemployment rate is seen falling to 19.9% this year and to 14.3% by 2022, according to a report published this week [5 June 2018] by the Finance Ministry’s Mid-term Framework for Fiscal Strategy.

The report sees Greece producing primary budget surpluses of more than 3.5% of GDP that reach up to 5.19% in 2022.

With parliamentary elections due next year, his left-wing party Syriza is trailing the conservative opposition party, New Democracy, in opinion polls. Progress under the Tsipras government includes eliminating the budget and current account deficits, boosting exports and embarking on other reforms. Now with Greece expecting to exit its third and final rescue programme in August, Tsipras may decide to bring forward the election date, and call an early election in October.

Yet Greek public debt is more than 180 per cent of GDP, the economy has shrunk by a quarter in these crisis years, and growth is still modest almost a decade after the first EU-IMF bailout of Greece in 2010.

Many Greeks see Germany as the principal enforcer of austerity, demanding severe cuts in pensions, salaries and the public sector in return for €326 billion to reduce Greek debt, and they blame the German Chancellor, Angela Merkel, for their plight.

But others lay the blame at successive governments that mismanaged the economy, failed to end corruption and avoided dealing with the deep structural problems in public administration, tax collection, the judicial system and business regulations.

At least a fifth of Greeks are still unemployed, the economy is still smaller than it was a decade ago, and tourism – despite all the questions about its sustainability and whether it is good for the Greece in the long-term – remains one of the few growth sectors in the Greek economy.

Back in Crete for
the next two weeks in
Rethymnon and Chania

The Varvaras Diamond Hotel is in a quiet corner of Platanes, 5 km east of Rethymnon (Photograph: Patrick Comerford, 2018)

Patrick Comerford

I am back in Crete this morning for a two-week holiday on this Greek island.

This is my second time in Greece this year, having spent Orthodox Easter in Thessaloniki in April, and my fourth time in Greece in the space of 12 months.

I am back in Platanes, a suburban and resort area about 5 km east of Rethymnon, and I am staying for the next week in the Varvaras Diamond Hotel.

I first came to Rethymnon 30 years ago in 1988 and have been staying in this part of Rethymnon for the past four years.

The Varvaras Diamond Hotel is set in a quiet corner on a leafy, flower-filled street that leads to the beach. I am close to restaurants, tavernas and shops, yet in a quiet, laid-back area.

I arrived late last night [6 June 2018] in Chania on a Ryanair flight from Dublin. Although the flight was delayed by more than an hour, but the 4½-hour flight and the one-hour, 65 km transfer to Rethymnon seemed shorter than my six-hour epic journey by public transport from Askeaton in Co Limerick to Knocklyon in Dublin on Wednesday last week.

The Varvaras Diamond Hotel, a family-run hotel owned by the Kantartzis family, was built in 2001 and is surrounded by evergreen trees and gardens with palm trees, colourful plants and flowers. From my balcony this morning, I am looking at lemon trees with the fruits in full bloom.

I am here for a week before moving on to Georgioupolis, between Rethymnon and Chania, next week.

During this fortnight, I hope to spend some time in a monastery, to visit icon workshops, browse in bookshops, swim in the Mediterranean, ramble around archaeological sites, seek out churches and buildings of architectural and historical interest, look for old mosques, synagogues, hanging balconies and fountains in the former Muslim and Jewish quarters of these cities, to get lost in the back streets of Rethymnon and Chania, to read poetry, novels, history and newspapers, and to enjoy long lazy lunches in the sun and dinners in the sunset.

I am about to head off to breakfast. But join me over the next two weeks as I reacquaint myself with places I have come to know so well but also explore new corners of Greece, try to get up to speed with Greek politics and even brush up on my rusty and limited knowledge of the Greek language.

The Varvaras Diamond Hotel is surrounded by trees and gardens