THE relationship between Greece and its creditors, which has been tense since the crisis began in 2010, has worsened significantly in the past few months and reached a breaking point. Last Wednesday, the creditors gave the country a final chance to come up with a “credible” reform programme in five days or else, exit the eurozone (Grexit).

Five years after the crisis and two bailout packages later, the cost of austerity has been high. Greek gross domestic product has contracted by 25 per cent, while the unemployment rate has soared to 25 per cent – or 50 per cent among the youth. Nominal wages have fallen by 20 per cent on average and pensions by between 20 and 60 per cent. Such adjustment costs have not been seen since the Great Depression of the 1930s. No wonder anti-austerity sentiments are rising in Greece.

… The writer is an associate professor and coordinator of the International Political Economy Programme in the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.