Greece on Monday officially exited the last of the three enormous rescue programs that saved it from going bust and abandoning the euro. But the €288 billion bailouts from the International Monetary Fund, the European Central Bank and the European Commission came at a huge cost that will still be felt for years to come.

In exchange for the money, Greece agreed to drastically cut spending and implement painful economic reforms. Government employees had their salaries slashed, their pensions frozen, and their retirement age pushed higher. Consumer spending plummeted, unemployment spiked and many businesses shut down.

On paper, the government, whose runaway spending fuelled the financial meltdown, has put its house in order. It went from a 15 percent budget deficit in 2009 to a 1 percent surplus in 2017.

The Greek economy is expected to grow 2 percent this year and 2.4 percent next year, after shrinking for eight out of the past 10 years. Public debt is forecast to peak this year at over 188 percent of GDP before declining to 151 percent by 2023, the year Greece is due for another review and possible debt relief.

Crucially, the cost of borrowing has come down.

“The bailouts have achieved their objective — to restore a degree of investor confidence and market access,” said Mujtaba Rahman, Eurasia Group’s managing director for Europe. “Greece can access capital markets and raise money itself.”

The country’s creditors have also agreed to restructure its debts, making it possible for the government to manage future payments.

But plenty of problems remain.

“There’s a range of structural economic issues that haven’t been resolved through the program, despite the supervision during the past eight years,” Rahman said. “I think it’s a stretch to call the program a success. It hasn’t restored economic health.”
IMF Managing Director Christine Lagarde cautioned last month that “greater reform efforts remain key to an economic recovery and lasting growth.”

She said the Greek government still needs to improve how it collects taxes, do a better job of clearing out unqualified civil servants and urgently revamp its privatization program.

Greece was hit hard by the global financial crisis in 2008. The country was already heavily indebted after years of government overspending, but the credit crunch made its finances unsustainable.

Because Greece uses the euro as its currency, the spiralling debt crisis put the whole eurozone at risk. If Greece were to drop out of the single currency bloc, it would undermine investors’ confidence in the entire project.

The first bailout came in 2010. The IMF, the ECB and the European Commission announced a three-year aid package, designed to rescue Greece.

The second package came in 2012.

The pain was made worse in 2015 after the populist Syriza party won national elections on the promise to end the austerity. The party’s leader, Alexis Tsipras, became prime minister and went on the offensive against the country’s creditors.

A third bailout package was agreed, but the IMF did not contribute funds. The total loans dispersed over three bailouts was €288 billion.