DEBATE: Greece is the EU’s former problem child, but is it now finally out of the woods?

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Greece is the EU’s former problem child, but is it now finally out of the woods?

Emiel van den Heiligenberg, head of asset allocation at Legal & General Asset Management, says YES.

Greek GDP data for the first quarter brought good news: year-on-year growth has increased to 2.3 per cent, the strongest since mid-2008.

That growth is now back in line with the Eurozone average. Greece now has nominal growth back above its nominal financing cost, which should lead to the primary surplus feeding straight into debt reduction. The independent Hellenic Fiscal Council estimates the primary surplus to be comfortably above the target of 3.5 per cent through to 2022.

The IMF loans are the most expensive part of the Greek borrowing mix: replacing them with either debt issuance or more European lending makes the debt arithmetic even easier.

With the Greek bailout programme ending in August, medium-term debt relief is on the table at the next EU summit. The exact form of that relief will be subject to political wrangling, but further extensions to the term of official sector loans (and reductions in their cost) will be part of the solution.

Alastair Benn, news editor of Reaction, says NO.

After the Hobbesian nightmare of the Thirty Years War in the seventeenth century, the aspiration to a common European unity became fashionable among continental thinkers. Following the new horror of WW2, that vision finally took shape in the founding treaties of the EEC – now the EU.

That ancient aspiration to “an ideal of Europe” has repeatedly run up against “problem children” – from the populist, nationalisms of the nineteenth century, through twentieth century British euroscepticism, to inefficient, corrupt Greece (and its Italian neighbour).

Although Greece has taken faltering steps towards growth, and crippling austerity measures are now ending, the social fabric remains fragile, and long-term debt is sky-high.

The lack of European-led initiatives on migrants means Greece struggles with new arrivals, and the (neo-fascist) group Golden Dawn remains a destabilising force, exacerbating fault lines in Greek society by staging vocal rallies in memory of civil war-era fascists and making open attacks on migrants.