A big milestone for Greece.
Record spending by foreigners as Greece’s tourism industry slashed prices helped the country’s current account post its first surplus last year since official data began in 1948, central bank figures showed on Wednesday.
Current account deficits have been a drag on the Greek economy for decades, offset with borrowing and capital investment from abroad.
The payments gap swelled to 15 per cent of national output in 2008 after the country entered the euro zone, fed by a debt-fuelled economic boom that led to a consumption frenzy on foreign imports.
Most countries, when they need to adjust economically, see a drop in their currencies, making their products more competitive. Greece didn’t have the luxury to do that, since it doesn’t control its own currency, and thus it had to undergo the much more painful process of internal devaluation (lower wages, etc.). This is painful since nobody likes nominal wage cuts, but also because the value of the country’s debt did not adjust.
But some normalcy is returning to Greece, and milestones like this point to a light at the end of the tunnel.