By Thanos Niforos
On the day it was announced that Greece is coming out of Eurozone’s bailout programme another story about Tilos, a small island in the Aegean also featured in the news. Tilos will soon be powered only by wind and solar power making it the first autonomous renewable green island in the Mediterranean. The final tests are currently being carried out and upon their completion Tilos will run exclusively on an innovative installation of high-tech batteries recharged by a wind turbine and a solar park. In an interesting coincidence with the day’s main news, the announcement pointed out that the project had been funded by the EU and it will be used as a blueprint for other small islands across the European Union that have limited grid connection to the mainland.
Unlike Tilos, autonomy will remain a challenge for Greece as it will be challenging to tap the markets and move towards a sustainable path of recovery. The country’s credibility is now at an extremely fragile state, the result of eight years of tough austerity measures and three successive programmes in 2010, 2012, and 2015 – with the last one being unnecessary – that were marked by soaring unemployment, hardship, and an unprecedented brain-drain effect.
So, is there any real room for growth? The much needed growth is imperative for the country to regain its credibility and at the same time steer through a series of targeted reliefs via tax reduction in 2019 and a set of social and welfare support initiatives that can be covered without external support only up until the end of 2022. The country may have achieved budget surpluses – excluding debt repayments – of around four per cent in 2016 and 2017, but its hands remain tied on social welfare spending.
Recovery is “not an event, it is a process” as the EU’s Commissioner on Economic and Financial Affairs, Pierre Moscovici, said on the day Greece emerged out of the bailout programme. The country can now borrow on market rates but it still has a long way to go in its efforts to refinance maturing loans on sustainable-debt terms, considering especially how fragile the global economy has recently become. A number of unfolding events such as the currency crisis in Turkey, uncertainty in Italy and the increased probability of a no-deal Brexit, can always destabilize global markets and subsequently affect the country’s recovery efforts.
Greece has already legislated for new reforms for 2019 and 2020 and will remain under supervision for several years. The improving economic indicators however are not yet translating into tangible improvements in the day-to-day lives of all my fellow Greeks. Except Tilos. Tilos managed to achieve the autonomy – at least in energy terms – that the country has found hard to reach all these years.
Tilos’ autonomy was also made through EU funding but will generate substantial change to the island’s residents, lead to long-term infrastructure improvements, encourage trade and above all will improve the social and economic status of those that matter most, the people.
The Greek government while celebrating the news of the country’s emergence from the last bailout programme should stop, think of the people and take a look at Tilos. In the process towards the country’s financial autonomy there are lessons that can be learned from this small island in the Dodecanese.