Now what?

Prime Minister George Papandreou begged for European support and got it. He refused to ask for money – stating that Greece would rely on its own strength, while interest rates soared and the markets were having a party with Greek bonds – and he didn’t get any. He introduced tough measures to be implemented in two stages, yet the markets were not appeased. He made threats that he would turn to the International Monetary Fund. The IMF solution was eventually imposed on him as part of a hybrid solution by the eurozone. So, what did the prime minister actually achieve at the end of the day? Reluctant political support and a complicated borrowing plan for some 22 billion euros, via the IMF, should the country find itself unable to borrow the 50 billion euros it needs by the end of the year. The only visible gain was an announcement by the European Central Bank to all European banks that it will continue to accept government bonds as guarantees – though this primarily benefits the banks themselves and has only an indirect impact on societies hard hit by the recession. Over the course of the holidays, the government will look for funds on capital markets in order to service the public debt – it needs 12.5 billion euros by end-April alone. The rates demanded by the markets will certainly not be influenced by German Chancellor Angela Merkel’s somewhat recalcitrant support and borrowing on exorbitant terms will continue. Greece’s debt will continue to soar and depositors will continue to take their money out of Greek banks. The price of gas meanwhile will continue to inch up. The recession will deepen. Nothing, in fact, has changed. Only George Papandreou will continue to express his satisfaction and optimism – while the country’s sovereignty suffers, Turkish warships sail around the Greek islands and everyone keeps mum about bankruptcy. Just like his predecessor, Costas Karamanlis.

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