June 15th, 2012
06:42 PM GMT
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(CNN) – Greece’s financial crisis dates back to December 2009 when its new government came clean about the state of the country’s accounts.

With a deficit more than 4 times the European Union limit and an economy mired in a deep recession, Greece hurtled towards insolvency.

Then-Prime Minister George Papandreou assured the world Greece was determined to confront its fiscal problem.

“We are making deep changes in our economy, our political system, our society, building the conditions for a stable economic environment, a transparent economy, a viable economy,” he said.

But those promises proved futile.

By early 2010, the cost of Greece’s credit had begun to rise sharply - pricing the borrower out of the bond markets and into bailout territory.

In May of that year Greece got its first rescue package worth $140 billion from the EU and the International Monetary Fund.

Along with those funds came demands for severe belt tightening with swingeing cuts to pensions and public sector jobs.

The minimum wage was slashed and swathes of industry earmarked for privatization.

And as Greece’s spending shrank, the unemployment line got longer leaving thousands free to take to the streets, often in violent protest.

By November, Greece’s cash crunch cost it its government, leaving the birthplace of democracy in a technocratic limbo following Papandreaou's failed push for a referendum.

Soon the euro zone crisis claimed other scalps.

In November 2010, Ireland was granted $105 billion after its banks went bust and by April 2011 Portugal had to ask for $98 billion in aid.

To contain the problem EU leaders set aside first temporary, then permanent, bailout funds and pushed member states to commit to balanced budgets.

But many said the moves were too little too late and all the while Greece’s drama continued.

One year after its first lifeline the nation was granted a second rescue package, worth another $110 billion. As part of the deal, bondholders were forced begrudgingly to forgive Greece for half of its debts, setting a dangerous precedent for the single currency.

Yet Greece still struggled to meet the IMF’s terms, leading some to doubt whether the medicine prescribed on this occasion treated the cause or exacerbated the symptoms.

Resistance turned into riots and early this year the human cost of Greece’s austerity spiral shocked the world with a pensioner’s suicide in Syntagma square. In a note explaining his decision, 77-year old Dimitris Christoulas said he couldn’t face a future “scrounging for food in garbage cans.”

A month later Greece went to the polls to punish the ruling political classes who are widely blamed for the state’s sorry scenario.

The vote was fractured, giving a prominent voice to new, anti-austerity parties and jeopardizing Greece’s very future in the euro.

This Sunday a new chapter of Greece’s economic tragedy begins.

The difference this time? The audience just got a whole lot bigger and the world asks itself “when will this end?”

soundoff (32 Responses)
  1. GoldBell

    "Unfortunately, markets and policy makers are so enamored by
    monetary policy solutions, they've forgotten how things are
    supposed to work," which should be based on innovation and
    productivity growth, Cecchini said.

    Trade imbalances sank the Euro and trade imbalances across the planet will sink the world economy.
    It Does Not Work.

    June 15, 2012 at 8:48 pm |
  2. Elias Daskalakis - Montreal

    It is a true shame that it has ended up this way but perhaps when all these tragic economic events have finally been settled maybe, just maybe, it will come to the surface as to who were the culprits and enablers behind this massive financial failure of this simple country but yet so instrumental to bringing democracy to a world that values it so much. Remember there are always two sides to a story.

    June 15, 2012 at 8:56 pm |
  3. Mike

    Courage Greece! Reject the German austerity plan. They don't care about Europe, they don't care about Greece. All Merkel cares about is that Germany keeps on steady growth. They aren't feeling the pain of austerity.

    June 16, 2012 at 2:31 am |
  4. Gods child

    Time has come for common people of all countires to stand united against the atrocities of modern finanical system which is eating into the survival. Now that we've ruined earth , people talk about moon colonizaton. what next ? stop , pause a while & think why we're here in the first place. As shakepshere said , " wold's a stage and we're actors " & thus there would be a play in which we're all acting *& a play has a "PLOT". lets understand that.....................Director & Creator is : GOD himself , who has revaled the plot to humankind through which we finally can have been liberated in life.

    Know the FATHER ( GOD) & Claim your inheritance.

    Om Shanti.
    God's child.

    June 16, 2012 at 5:46 pm |
  5. Gods child

    Time is cyclic...... a cycle is of 5000 years old is 1 YUGA , in which world moves from being NEW to OLD ( Golden Age – > Silver Age – > Copper Age -> Iron Age). At the end of Iron Age , when the world is in a hopeless condition (as it is today) , Incorporeal God bodies himself to reveal the true history ,geography of world and to enlighten us about the purpose of this eternal drama as mentioned in BHAGVAD GITA.(People have mistaken Shri Krishna as God as he is the numeber 1 student of GOD & not God himself)... God doen';t enter the cycle of Life & Death......he is the sweetest of all........Darling of all human souls who refer him in numerous names.(GOD, ALLAH ,ISHWAR ).

    Can't we see the same MAHABHART WAR in front of us now today. Nuclear Missiles , Natural Calamities & cilvil wars will purify the world & libreate the souls from bondage and send to nirvana & then the dieties would decend in the new world.

    Learn RajYoga & become the king of kings......!!! ..
    Internet, Mobiles , Electricity , Space exploration , Cars ,motors , robots , industrial stuff never exitsed even 100 years ago.Its an illusion to think Humankind is progressing for the good.Its all POMP Of MAYA...to deviate us from the path of UNIFICATION with our FATHER.

    June 16, 2012 at 6:05 pm |
  6. TrythbTold

    Do you actually think that people votes make a difference? NOOO they will decide regardless like every other country on the outcome and make it look like people vote... THERE IS NO DEMOCRACY!!

    June 16, 2012 at 7:02 pm |
  7. Chuck

    Greece exiting the EU may be a disaster for the bankers CDS speculators (who should fail anyway) but not for the Greek people who stand to recover like Iceland after telling the bankers to GTH.

    June 16, 2012 at 7:17 pm |
  8. Nathan Kyle

    Those ultimately responsible for the debt crises should be held to account for their actions.
    there is a clear case for Criminal Incompetence & Criminal Neglect, and they should answer for the Economic and Fiscal mismanagement of the their respective nations finances when they were in Goverment.

    June 16, 2012 at 7:23 pm |
  9. Johnson

    We need to get rid of Greece out of the EZ and if possible the EU. They are parasites on the rest of the world and will not change. The best that could happen would be for Turkey to take control of Greece again.

    June 16, 2012 at 8:09 pm |
  10. bob

    any 8th grader knows the solution, which is you can't spend more money than you take in, period. The USA is going down the same path, and Obama, the spend, spend, spend president, couldn't care less.

    June 16, 2012 at 9:14 pm |
  11. Sadia Younis

    Greece's economy depends on tourism and agriculture which seem to be declining and with so many internal conflicts going on its hard to keep up. Besides it only contributes to 5% of the Euro zone economic output which is too little. Its becoming a liability on the EZ so time for greece to say good bye.

    June 16, 2012 at 11:03 pm |
  12. konstantina

    People in Greece are starving and the crime rate has increased dramatically during the last 2 years.There have been about 2,500 suicides since the economic crisis began but most people around the world are not aware of the current situation. They blame the Greek people but in fact it's the Greek politicians' fault and irresponsibility. Angela Merker treats Greece as the 'guinea pig' of Europe and the Greeks should not accept it. Greece has a long history and culture that no other country has and we must defend our civilization. So, those who have no idea about Greece, its predecessors and its people, please do not say such foolish things as 'Greece is a parasite.... Turkey should take control of Greece again'. This is total ignorance.... first educate yourself and then judge. I am Greek, I am proud of my country and I will continue to be proud whatever happens.

    June 16, 2012 at 11:09 pm |
  13. Macedonian

    Elias, what ancient values are you recalling by saying : "this simple country but yet so instrumental to bringing democracy to a world that values it so much"???!!. This Greece, has only the name related of the ancient one, nothing else. Look at the campaign, your politicians are capturing voters sympathies not by recognising the cause of the problem and offering crisis solution, but more by blaming those who lent you money or by promising more blockades to your neighbour Macedonia, acting against the highest democratic right that lets someone be called as he feels to be called (not to say as his grand grand fathers has being called). What values are you talking about friend. I think, nowadays Greeks will be defeated by their own greed, arrogance and laziness, which has nothing to do with the so called ancient values, just forget about them..i just hope new generation will start thinking and acting in a better way in the future.

    June 16, 2012 at 11:32 pm |
  14. F Robinson

    Greeks are the biggest Tax cheats on Earth. A few years ago I visited Greece I was amazed to see that tax cheating was a national game. There is no such thing as a free lunch unless you are in Greece.

    June 16, 2012 at 11:48 pm |
  15. GG06

    What is going on? Greece just beat Russia 1-0. They are advancing to the Euro quarter finals. Don't believe me, just look at UEFA's official site. :)

    June 17, 2012 at 12:49 am |
  16. Banks & IMF Collapse

    All the developed countries are in DEBT to the bankers. No one has the right to criticise Greece without looking at their own Government and the debt over their own heads. The USA, Germany, France, Uk, Canada owe TRILLIONS. Yet people comment on the fake debt(of the 350bill, 200 billionis debt that did not even go to Greece but the bankers but ended up on the Greek Balance Sheet).

    Get rid of Pasok and ND and vote elsewhere. Germany will contiune to punish Greece because the German voter expects this. They can't accept the fact that the Germant banks gambled with their money and the German Taxpayer now want someone to compensate them. Simple.

    June 17, 2012 at 1:16 am |
  17. V.D.

    Jonson...I bet your surname is either Turkish or Slavic. Your wording 'parasites' is the PERFECT indication of envy. Enjoy this crisis while it last because one day when Greece re-bounces you'll lose your sleep. And it will re-bounce as a completely different country that you knew. With the old structures down and a new more efficient state and economy. In fact, this crisis has cleared the air for something better and new. Actually, this crisis is not a reason for you to be happy but of concern since Greece will come out of it a much better country and economy. We've just hit rock-bottom. Your real envy and nightmare will soon begin after this

    June 17, 2012 at 1:21 am |
  18. Derek

    **NEWSFLASH** The EURO is dead!

    June 17, 2012 at 1:26 am |
  19. V.D.

    F. Robinson, we do know that tax evasion is a huge problem in Greece and the biggest front to tackle in the aftermath of this transforming crisis – However, apparently you have personal psychological issues for calling the Greeks the "biggest tax cheats on Earth" when taxes ( admittedly we deserve it to a certain extent) weigh so heavily on everyone these days. Show some respect and dont be so blatant and uncouth. Above all show us the statistical data out of which you infer that we are "the biggest tax cheats on Earth". Come on...show us the statistics and base your argument on solid grounds. If not, then it verifies what I wrote above – you have personal psychological issues with the Greeks and you are simply trolling along the websites insulting them

    June 17, 2012 at 1:53 am |
  20. Niko - Athens, Greece

    I am Greek, I am proud for my self (my ethics and dignity) and I feel lucky to inherit the glorious Hellenic past.

    I am not willing to defend my self against all the cliche imposed on people's minds about me as a Greek nor will I comment on the out of the subject bitterness of what I consider "just a pseudo-Macedonian shout"

    But, I can't resist wondering loudly:
    - how can a country with a GDP of around 4% of the total EU GDP can be so powerful to make the whole world be so anxious about its elections?
    - if the global economic turbulence was triggered by the ponzi-like real estate US market and the ponzi game was supported by house buyers, the banks, those who were giving AAA to junk derivatives and the state, should I imply that the Americans have the "fraud gene"? If no, could I support that "Greeks are the biggest Tax cheats on Earth", or that Germans are "this" and "that" etc?
    - how can a thinking person blame a whole country or nation as lazy or parasites without having lived their for at least 5 or 10 years?

    In other words, I believe we can start thinking more before taking the easy step of throwing the stone to whoever the tabloids are targeting. Just a bit more clear thinking and the world will be a better place.

    Thank you for your interest in my country.

    June 17, 2012 at 2:14 am |
  21. george


    June 17, 2012 at 2:24 am |
  22. Sirned

    Notice all the countries that are in big finacial messes and have populations losing wealth to the rich Globalists are all tied to Wall Street... It's simple folks break up the banks and regulate the heck out of them or watch your wealth get slowly eroded one knife cut at a time.....

    June 17, 2012 at 3:41 am |
  23. Dan

    The fall of the Soviet Union should have taught people that socialism doesn't work. Those that do not learn from history are destined/doomed to repeat it.

    June 17, 2012 at 4:13 am |
  24. Ro Nel

    Dan do you understand the world economy austerity will never work never have never will. History is only repeating itself. Just like most far right thinkers you are an idiot. You have to have balance in any and everything you do

    June 17, 2012 at 4:38 am |
  25. str009

    Once, just once, I'd like to see a government program that is paid for on the spot. If it's worth buying, PAY THE BILL. Everyone says they know why this is all happening. I say it's because people lived beyond their means, then had the nerve to act surprised when the bills came due, and they didn't have the money. Unless it's a national emergency: Pay. As. You. Go. And even in an emergency first try something like sell bonds at the moment to pay for it. Only the banks get rich on debt.

    June 17, 2012 at 5:23 am |


    June 17, 2012 at 5:42 am |
  27. bobed

    there is no hope for greese they do not want to take their medicine and do what it takes to right their ship they think they can just continue with things the way they are but they will have to face the truth that they are broke and have no money they will have to take deep cuts and go to work to do what ever it takes to get out of trouble follow the german example it will not be easy but they have to do it theirselves there is no more help

    June 17, 2012 at 5:54 am |
  28. phil

    Unlike the Greeks, we here in Germany pay tax and are not so corrupt as is normal in Greece. Pay the price yourselves

    June 17, 2012 at 10:41 am |
  29. Liza

    Having read all of the comments posted i believe that we all like to find scapegoats and put the blame on them, because it is a simple and easy solution. The thing is that this crisis isn't something that will go away if we target a group of people and put the blame on them. Just like we can't say that ALL Germans ALWAYS pay ALL of their taxes, we can't claim that ALL Greeks ALWAYs pay NONE of their taxes. There are no absolutes! In every society you have people who will try to cheat the system. Having lived in this country for 20 years now i have to admit that
    *there is a great deal of corruption in the gov't sector
    *tax evasion is easy because the right mechanisms have not been put into place for a select group
    *politicians make laws which suit their own needs – not the needs of the people
    *not all greeks are lazy- many are hard working individuals
    *yes many were living beyond their means-especially the greek gov't
    When all is said and done, Greece deserves a chance to get its finances in order- not because of its glorious past-
    but because of its unique individuality! What makes Europe great is that we all share a common currency but not a common culture! It would be terrible if countries with such diverse cultures had to exit the EU so that some banks did not have great losses!

    June 17, 2012 at 2:40 pm |
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    July 29, 2012 at 7:49 am |
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