How Greece was destroyed


Angela Merkel watching Manuel Barroso lecturing George Papandreou


Right from the beginning, the scenario of the Greek financial tragedy was criticised as fake. Towards the end of 2009, the newly elected government of George Papandreou, son and grandson of prime ministers, found out that his PASOK socialist party had won the election on populist promises that could not be fulfilled. Papandreou himself had told the Greeks, “there is money”, despite the then on going credit crunch. It was an old trick of the opposition parties to win elections in Greece and elsewhere, but this time everything was different.

The world was deep in an unseen before financial crisis, which culminated with the bankruptcy of Lehman Brothers in September 2008. Banks had stopped not only to lend to governments and businesses, they didn’t even lend to each other.

In such an environment Papandreou couldn’t follow the good old Greek government tradition of borrowing to fulfil electoral promises. Judging Papandreou in retrospect, he must be a very clumsy politician, because he could have won the November 2009 general election without making costly promises. He also underestimated the credit crisis which was developing uncontrollable, tearing apart huge multinational groups and countries. Even his predecessor, Constantine Karamanlis, a bon viveur and opportunist politician, had seen the incoming calamity and swiftly handed out the steering wheel to Papandreou, by holding early elections with no constitutionally sound reason.

It was a deplorable spectacle to watch those two sorcerer’s apprentices to succeed each other in Greece’s top job. Karamanlis had borrowed more than €50 billion earlier in 2009 and Papandreou didn’t understand that it was impossible to repeat that. At that time, the global financial environment was deteriorating fast with lenders one day giving out €50 billion in new loans and the next snivelling over their empty coffers.

In short, the old Greek tradition of recruiting thousands of party militants in the public sector and handing out hefty wage increases to civil servants was not any more available to Papandreou. Without those traditional governing ‘tools’ he panicked and asked his minister of Finance, George Papaconstantinou, to politically justify that to voters. This last ‘brilliant’ economist didn’t give it much thought. He had the solution ready-made from his predecessor in the Ministry, George Alogoskoufis, also an economist.

What Alogoskousfis did back in 2004 had shaken the Eurozone and the financial world, as he declared that Greece had joined the Eurozone on faked statistics, concerning state debt and government deficits. Blaming the previous government for everything was another Greek political ‘tool’. The country’s political life at that time was reminiscent of the joke with the three envelops, every outgoing prime minster must deliver hand by hand to the next top guy and tell him to open them one by one at times of difficulties.

The first envelop contains a letter with two words:  “blame me”. The second one says “blame everybody else” and the third one contains an advice, “prepare three envelops”. So Papaconstantinou didn’t think for a second. He also denounced the previous government of falsifying state debt statistics, insisting that the real government budget deficit for 2009 was no around 6.5% of the Gross Domestic Product as Aloghoskoufis had estimated but more than the double. In this way, he thought to block internal demands for more state jobs and wage increases. At the same time, however, the other Eurozone governments and all and every financial market were shocked. Unfortunately, this time the world credit crunch had changed everything and Papaconstantinou in 2009 didn’t have the option Alogoskoufis had in 2004, to continue borrowing.

To cut a long story short, Papandreou turned the 2009 state budget deficit problem into a creditworthiness one for the entire country. Then cold political winds start blowing and destroyed the Papandreou administration, sending Greece and the Eurozone to the hands of the troika of International Monetary Fund, the European Central Bank and the European Commission. The IMF got mixed up in this exclusively European problem on the insistence of Berlin, because the Fund reputedly had the expertise to help reshape the over borrowed countries and cut down their fiscal deficits. It turned out that it was not like that.

The IMF’s chief economist acknowledged from the Tokyo general Assembly of the World Bank and IMF that the Fund made wrong predictions for the Greek economy. He also accepted that the programme applied had to be drastically changed. In the meantime (2010-2012) Greece lost almost a quarter of its Gross Domestic Product and income, unemployment surpassed 25% and the government debt from 115% of the GDP at the end of 2009 is today 165%. All that despite the fact, that the country applies almost to the letter whatever troika says, and after Athens have agreed a haircut of 53.5% of the privately held Greek government debt.

Not to say anything about the damage on the country’s social coherence and the damage to the prospects of at least two generations. If this is a salvation, then words have lost their meaning. Most irritating in now the fact that Papandreou travels around the world giving paid lectures over all that. Presumably he tells his audiences how a wealthy country can be destroyed. Who would pay a ticket to hear from him anything else than that? In any case Greece is now caught in a vicious cycle of recession and expenditure cuts.










the European Sting Milestones

Featured Stings

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

G20 LIVE: World Leaders in Turkey for G20 Summit. Global Economy will be discussed in Antalya

How Japan became the world leader in floating solar power

“Who do I call if I want to call Europe?” Finally a name and a number to answer Henry Kissinger’s question

The horrific trend of the anti-vaccine movement in Turkey

Guatemala Dos Erres massacre conviction welcomed by UN human rights office

Assault on key Yemeni port would endanger 300,000 children and ‘choke off’ aid for millions more: UNICEF chief

Commission takes further action to ensure professionals can fully benefit from the Single Market

Foreign Investment Screening: new European framework to enter into force in April 2019

How China raised the stakes for electric vehicles

Copyright: MEPs update rules for the digital age

‘Global clarion call’ for youth to shape efforts to forge peace in the most dangerous combat zones

These are the world’s most fragile states in 2019

The importance of collaboration in the digital economy

Why strive for Industry 4.0

Public opinion misled by the Commission on air transport safety

Here’s how to make ‘value-based healthcare’ a reality

MEPs want to ensure sufficient funding for Connecting Europe’s future

Is this the way to finally beat corruption?

EU labour mobility: Inconvenient truths for everybody

Catalonia’s vote for independence and the power of symbols

Fighting crime: faster EU-wide exchange of non-EU nationals’ criminal records

The Stray

Seize the opportunities of digital technology to improve well-being but also address the risks

Are you breathing plastic air at home? Here’s how microplastics are polluting our lungs

“16+1” Cooperation injects new vigor into China-Europe cooperation

Rising human trafficking takes on ‘horrific dimensions’: almost a third of victims are children

Food for millions in Yemen at risk of rotting in key Red Sea port, warns UN

A backbencher Tory MP threatens both EU and UK with a no-deal Brexit

ECB money bonanza not enough to revive euro area, Germany longs to rule with stagnation

Civil society groups matter for Cambodia’s sustainable development: UN expert

India’s future as a world power depends on 4 key relationships

Future of EU farming: MEPs push for modern common policy with fair funding

The impact of mobile and rapid digital adoption on how India consumes

A new catastrophic phase in the Syrian carnage

Youth Internationalization: part of everyday life in JADE

Fears for food security and the future of farming families, as Fall Armyworm spreads to Asia

DR Congo: ‘New waves of violence’ likely, UN warns, unless State acts to prevent intercommunal reprisals

The European Sting Cookie Policy

The EU Parliament unanimously rejects Commission’s ideas about ‘seeds’

FROM THE FIELD: Green shoots of peace in South Sudan

Will Brexit shatter the EU or is it still too early to predict?

Financing the 2030 Agenda: What is it and why is it important?

There are now four competing visions of the internet. How should they be governed?

5 ways governments can unleash the power of young entrepreneurs

Do you dare to go to China?

Mali not fulfilling its ‘sovereign role’ in protecting its people: UN human rights expert

Corruption In The Balkans Is Impeding EU Membership

UN recognises role of sport in achieving sustainable development

A Sting Exclusive: “The challenge of Society’s digital transformation”, Spanish Minister of Spain for Industry, Energy and Tourism José Manuel Soria live from European Business Summit 2015

EU makes key TTIP document public as protests get louder

EU Commission – US hasten talks to avoid NGO reactions on free trade agreement

Banks get trillions and the unemployed ECB’s love…

Chile ups foreign bribery enforcement but flawed case resolutions are insufficient to ensure transparency and accountability

These coastal countries are sinking the fastest

Youth unemployment: think out of the box

Gender minority and health sector: promoting mental health with better medical education

Commission presents far-reaching anti-tax evasion measures

Don’t compare data to oil – digitization needs a new mindset

Commission’s action plan: financial world mandatory links to environmental targets

Civilians ‘continue to pay highest price’ in Ukraine conflict, with peace prospects losing ‘momentum’

More Stings?


  1. Hey! This is my 1st comment here so I just wanted to give a quick
    shout out and say I really enjoy reading through your posts.
    Can you recommend any other blogs/websites/forums that deal with the same
    subjects? Thank you!

Speak your Mind Here

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s