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Little has been as satisfying for Greek policymakers as seeing the country’s journey from Eurozone delinquency end in the election this week of Kyriakos Pierrakakis, the Greek finance minister, as president of the Eurogroup.
The group of finance ministers, which steers euro area policy, embodied for Athens the hardship and turmoil of the bailout years: it handled negotiations with Greece as the country teetered on the edge of bankruptcy during the Eurozone crisis a decade ago.
While Pierrakakis is not the first minister from a former bailout country to take the role — Portugal’s Mário Centeno was chair a few years ago — Greece’s crisis was deeper, longer and more existential than any other in the Eurozone.
The symbolism matters not only in Athens but across the bloc: a country once seen as Europe’s weakest link is now chairing the group that had debated its expulsion.
The Eurogroup played a central — and at times painful — role from the moment in 2009 when Greece’s then finance minister shocked colleagues by revealing the country’s deficit was five times higher than the Eurozone’s limit, through to the peak of the crisis in 2015 when Germany proposed a temporary Greek exit from the euro.
Thomas Wieser, former head of the Eurogroup Working Group and a key figure behind the scenes of the sovereign debt crisis, said he saw the election of Pierrakakis as revealing both how far the country had come and the fragmentation of the political landscape elsewhere.
“It shows that Greece has become sort of credible,” he said — a statement that would have been unthinkable to some a decade ago.
Wieser recalls a clandestine meeting at the home of Greece’s then finance minister Yanis Varoufakis at the height of the crisis, at which he gave a lengthy explanation of the consequences of a sovereign default, seen in many European capitals as a real possibility.
He remembers vividly that the Greek hosts did not address any of his warnings. “At the end, they just looked at me and said ‘the main course is pasta’,” he said.
Jeroen Dijsselbloem was Eurogroup president during what was arguably its most fraught moment, in late June 2015.
A day after the Greek government announced a surprise referendum on bailout terms — and urged voters to reject them — Varoufakis walked out of the meeting, leaving his counterparts to discuss how to ringfence the Eurozone.
At that point, a Greek exit from the single currency was seen as the most likely scenario.
It was, Dijsselbloem admits, hard to imagine then that a decade later “Greece would be leading by example . . . not just leading the Eurogroup but showing what sound policy choices and reforms can do for economic dynamics,” he said.
For Klaus Regling, former head of the European Stability Mechanism and the Eurogroup’s longest serving participant, the worst moment of the crisis came in July 2015.
Greece had voted against the bailout terms in its referendum and Germany’s Wolfgang Schäuble circulated a proposal for Greece to take a temporary exit from the Eurozone. “He only sent it to a few selected colleagues. But everybody knew he would have preferred that Greece left,” Regling said. “And it got very close, as we know.”
A decade later, Regling says: “Greece has come a very long way.”
Greece’s debt today remains the highest in the EU — but the debt-to-GDP ratio is falling quickly and debt service payments are relatively low because more than half the debt is owed to the European Stability Mechanism (ESM) at very low interest rates. The country is among the few in the euro area with a budget surplus, and its economy is expanding faster than many of its peers, after years of stagnation.
“It shows that a country that puts in place the right reforms and makes the necessary adjustment can go a long way,” Regling said. “And the new finance minister contributed to that by implementing the digitalisation of Greece which is also needed in many other European countries.”
Pierrakakis used his acceptance speech to signal a forward-looking agenda, calling for unity, urgency and results.
“In the years ahead, my aim will be to keep the Eurogroup a body of unity and shared purpose,” he said, promising to overcome old divisions “between the north and the south, the east and the west, the so-called ‘frugals’ and the so-called ‘spenders’.”
Wieser notes that the job, for all the satisfaction it brings Greece, will not be easy. “As fantastic as the creation of the euro area has been, it has led to a loss of economic policy competence in individual member states,” he said. “So we have to balance that in a way. And I don’t think we’re there yet.”
