Bailout Addiction: Greece Craves Cash Injection


Prime Minister George A. Papandreou is fighting for another vital cash injection for his collapsing country. He is in Berlin, convincing creditors that his country is enforcing its reforms and can successfully emerge from its debt crisis.

­Speaking to members of German industry in Berlin, Papandreou used very positive rhetoric, saying that he “can guarantee that Greece will live up to all its commitments.”

Germany’s Chancellor Angela Merkel, who was also at the conference, said that she has “absolute respect” for structural reforms pushed through by Papandreou’s government. She believes that the most important thing for Greece is to regain confidence, and said that “whatever Germany can do to support that, [it] will do.”

The Greek PM is expected to hold talks with Merkel over the best way to cut Greece’s budget deficit and drag the country out of crisis.

In support of the prime minister’s commitment, Greek Parliament members passed a controversial new property tax bill. A majority of members in the 300-seat Parliament voted Tuesday in favor of the bill, which aims to boost revenue as the country struggles to meet its fiscal targets.

The property tax hike forms part of a package of austerity measures put together to convince the EU and IMF to hand out an €8 billion bailout loan.

Protesters have gathered outside parliament in an effort to prevent the new austerity measures being passed. The deep unpopularity of these cuts could make them very hard to deliver, as RT’s Sara Firth discovered.

A series of austerity measures has hit the Greek people hard: they have endured cuts in government spending and suffered cuts to their pensions. A lot of people have lost their jobs and the unemployment rate is skyrocketing. And now many see this new property tax as the last straw.

Publicly, EU leaders say a default by Greece is not an option. However, it appears that privately, they are looking at a controlled default as a very realistic plan B, Sara Firth said. And the people are really wondering whether their leaders have the political capabilities to defuse this crisis situation.

George Katroungalos, a professor of constitutional law, believes a default is inevitable. The question is, who is going to control it?

“Either we are going to have a default, a default that we can organize and protect our interests accordingly, or we are going to have a kind of controlled bankruptcy in a way that Brussels and the lenders are going to dictate to us,” he said.

Experts say EU leaders cannot afford to let Greece to leave the Eurozone, because if it can leave, then anyone can. A dangerous precedent would be set, opening an exit route for such countries as Spain and Italy, whose problems could result in the collapse of the entire monetary union.

“The EU is trying to avoid a domino effect,” says Katroungalos. “So practically they are trying to isolate us for us not to contaminate the rest of the Eurozone. Maybe we are going to be a useful sacrifice for them in order to show this kind of austerity measures are necessary – and if they are not followed by the letter, then the disaster is the only possible way out.”


RT, previously known as Russia Today, is a global multilingual news network that is funded by the Russian government and has been labelled as a propaganda outlet by the US State Department.

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