ATHENS, June 25 (Xinhua) -- Euro zone officials greeted last week the upcoming end of the third Greek bailout program this August as Greece has returned to normality, but the situation on the ground is quite different, experts warn in Greece.

The deal struck at the Eurogroup meeting in Luxembourg on June 22 provides for some notable debt relief for Greece, adds to its cash buffer with a final bailout installment of 15 billion euros (17.5 billion US dollars) and introduces a strict surveillance model of quarterly inspections on which the implementation of the debt easing measures will depend.

"For the euro zone this is seen as a very positive development, as European Union officials are eager to point out this is an issue that has closed, that Greece needs no more money. This is important for them as the challenges the bloc is facing from the European south, especially Italy, as well as the Brexit prospect, mean they need to focus on other issues now," Nikolina Kosteletou, an economics lecturer at the University of Athens, told Xinhua.

"However the issue is not closed in Greece, as the people have not yet overcome the crisis, and their tax-paying capacity is exhausted. So far tax revenues have done well, but from now on it will be difficult, with the new pension cuts and tax hikes, and the consequences could be serious," said Kosteletou who is also a governing board member at the Independent Authority for Public Revenue.

The economy has not exactly recovered just yet. Unemployment stood at a particularly high 21.2 percent in the year's first quarter according to the Hellenic Statistical Authority (ELSTAT).

The growth rate remains rather feeble, at 1.4 percent in 2017 and projected at 2 percent this year by the Bank of Greece, far from the strong rebound originally anticipated by the creditors and the government alike, experts noted.

The creditors' requirement for a high primary budget surplus of 3.5 percent of the Gross Domestic Product every year until 2022, and 2.2 percent thereafter, confirmed the pension cuts planned from January 2019 and the reduction of the income tax discount as of January 2020.

"With such high primary surpluses and huge taxes, the economic growth will be hard to come. There even is a small possibility that in six or 12 months Greece reverts in a critical condition, for political or other reasons, domestic or external," warned Kosteletou.

Greece aspires to return to the markets in full, but the high interest rate of its benchmark 10-year bond in the secondary market, coming to 4.15 percent even after the favorable Eurogroup decision, means the country will find it hard to finance its needs for now.

The agreed enlargement of the grace period for the repayment of euro zone loans by 10 years and the extension of the loans' maturity from 2056 to 2066 will ease Greece's debt and make it sustainable, said Prime Minister Alexis Tsipras.

But at 177 percent of the GDP the state's dues to its official creditors remain particularly high, compared to a 110 percent rate generally considered as sustainable, according to experts.

"Greece's objective will now have to be the projection of an image of normality, with a stable tax environment that will be friendly to investors, so as to reach the goal of the increase of economic activity," noted Kosteletou.

Yet as austerity continues, over one in three Greeks (34.8 percent of the population) are threatened by poverty or social exclusion, per the latest ELSTAT figures, while foreign investments remain few and far between.

Experts add there is plenty of work to be done in the sectors the bailout programs directly touched on, such as banking and public administration.

The credit sector has to a great extent emerged from its crisis after three recapitalizations, with the effort focusing now on the further reduction of bad-loan portfolios.

Banks in Greece are set to achieve the targets set for slashing their nonperforming exposure stock through settlements, sales and write-offs, according to the latest report by the country's central bank, but more ambitious targets are required for the sector to resume financing the economy, the Bank of Greece warned last month.

In civil administration the reforms introduced by the economic streamlining programs are also seen as insufficient.

"After eight years of bailouts, what ought to be done in public administration has hardly been done. All the proposals brought to Greece over those eight years could have been implemented smoothly in a 15-year program by ourselves, and then we would not have needed recourse to foreign creditors," Vassilis Kefis, associate professor of civil administration at Panteion University in Athens told Xinhua.

He argued that "the Greek civil sector has a tremendous human capital that has been largely untapped. It requires proper management, because that alone could help the state mechanism take off."

The state mechanism still requires the transfer of knowhow in new technologies and innovations that the country's creditors have started offering through the bailout programs, the expert said. (1 euro = 1.16 US dollars)