June 15th, 2012
06:42 PM GMT
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?”
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