The Greek crisis explained in 9 simple steps

How history repeats itself in (vicious) cycles
by Ellie Ismailidou

1. Crooked data
 January 2010


A report by the European Commission accuses Greek public authorities for unreliable economic data regarding the country's budget, debt and deficit. The 2009 deficit is revised upwards to 12.7%, from 3.7%.

The European Commission has published a damning report on Greece's "unreliable" economic figures, increasing the chances of the EU executive launching infringement proceedings against Athens. The report on Greek government deficit and debt statistics highlights the general "lack of quality of the Greek fiscal statistics" and "failures of the relevant Greek institutions in a broad sense.
Read full story by eubusiness.com here

2. Greece on the brink of default (vol.1)
May 2010

On May 2nd 2010, the International Troika, comprised by the International Monetary Fund, the European Union and the European Central Bank) agrees on a bailout package for Greece worth 110 bn euros. Greek prime minister Georgios Papandreou announces severe austerity measures and thousands of citizens take to the streets. Violence prevails and three people die in a burning building.

Three die in bank during Greek riots  

Riots over harsh new austerity measures left three bank workers dead and engulfed the streets of Athens on Wednesday, as angry protesters tried to storm parliament, hurled Molotov cocktails at police and torched buildings. Police responded with barrages of tear gas.
Tens of thousands of people took to the streets in a nationwide strike to protest new taxes and government spending cuts demanded by the International Monetary Fund and other European nations before heavily indebted Greece gets a euro110 billion ($141 billion) loan package to keep it from defaulting.
The three bank workers a man and two women died after demonstrators set their bank on fire along the main demonstration route in central Athens. As their colleagues sobbed in the street, five other bank workers were rescued from the balcony of the burning building.

Read full story by USA Today here

3. I won't pay
February 2011


Rise in taxes and a severe decline in employment rates and salaries leads to the creation of the "I won't pay movement", a citizen mobilization of civil disobedience against taxation.

They blockade highway toll booths to give drivers free passage. They cover subway ticket machines with plastic bags so commuters can't pay. Even doctors are joining in, preventing patients from paying fees at state hospitals.
Some call it civil disobedience. Others a freeloading spirit. Either way, Greece's "I Won't Pay" movement has sparked heated debate in a nation reeling from a debt crisis that's forced the government to take drastic austerity measures -- including higher taxes, wage and pension cuts, and price spikes in public services.
What started as a small pressure group of residents outside Athens angered by higher highway tolls has grown into a movement affecting ever more sectors of society -- one that many say is being hijacked by left-wing parties keen to ride popular discontent.

Read full story by MSNBC here

4. Indignant citizens take over public places
May-June 2011


Inspired by the Spanish "Indignados", Greek citizens form their own "Indignant Citizens Movement", a non-violent anti-austerity movement that is not affiliated to any political party and gains nationwide support. Tens of thousands of citizens gather outside the Greek parliament and hundreds of them camp there for eight consecutive weeks, asking the government to repudiate the loan agreements.

Tens of thousands of demonstrators converged in and around Syntagma Square on Sunday for a 12th day of protests against the goverment's ongoing austerity drive. The crowd in central Athens was the largest since the campaign began with the turnout estimated at 80,000 and police out in force. Following a dip in numbers at rallies toward the end of last week, yesterday's crowd spilled out of Syntagma Square and into surrounding streets.
It appears that a larger number of Greeks were inspired to join Sunday's protest as rallies were also taking place in Spain and Portugal, which have similar economic problems. Greece's self-professed "Indignant Citizens" -modeled on a movement with the same name that was launched in Spain last month - have pledged to continue their protests until the government reacts.

Read full story by Kathimerini here

According to a survey conducted by the Athens University of Economics statistics department, unveiled on Friday, more than two thirds of Greeks are supportive of the indignant citizens' movement that has now been protesting virtually non-stop outside the Greek Parliament since May 25.

Read full story by Athens News here

5. Greece on the brink of default (Vol.2)
July 2011


Eurozone leaders reach an agreement for a second bail-package for Greece. The new package grants Greece 109 bn euros worth of credit in exchange for new austerity measures on behalf of the Greek government.

The package includes:
109bn euros in new loans to Greece
Various options to extend Greece's repayment terms and reduce the amount it repays on existing loans
Voluntary private sector participation in these options, so that banks share taxpayers' burden
Doubling the length of repayment terms for the Irish Republic and Portugal, both of which have received financial assistance previously
Additional powers granted to the European Financial Stability Facility to buy up bonds and to make credit available to countries such as Spain and Italy that are not at immediate risk of insolvency.

Read full story by the BBC here

6. Greece on the brink of default (Vol.3)
November 2011


After an agreement is reached among leaders of the European Union to reduce Greek debt by 50%, Prime Minister George Papandreou announces his intention to call a referendum on the issue. This provokes severe condemnation from international leaders and Greek officials, which lead to Papandreou's resignation. An interim government is created with the mission to pass new austerity measures and hold national elections.

George Papandreou, under intense pressure to end the political uncertainty engulfing Greece, is expected to formally resign immediately as prime minister after convening an emergency cabinet meeting.
Sunday's extraordinary cabinet session would be the crisis-hit leader's last as prime minister, a government spokesman confirmed as cross-party talks to form a national unity government continued behind closed doors for a second day. Papandreou would quit once personnel of the new administration had been agreed, he said.
(...)
The creation of a broad-based interim government representing Greece's entire political spectrum is essential to implementing a new bailout programme from the EU and International Monetary Fund that foresees Athens pushing ahead with painful austerity measures, officials in Brussels say.

Read full story by The Guardian here

7. Greece on the brink of default (Vol.4)
January-February 2012


Private creditors agree to a 50% cut-off on the Greek debt, through a bond swapping process. The Eurozone leaders decide on a third bail-out package for Greece, worth 130 bn euros. In exchange, the Greek government passes new austerity measures in exchange: 22% off the minimum wage, 15% off pensions and 15,000 public sector jobs. Unemployment rises to 21%, an all-time record.

Greece ended months of uncertainty by finally securing a new bailout and debt-restructuring agreement with euro-zone finance ministers, but doubts remain over whether Greece will be able to meet the ambitious terms of the accord.
The finance ministers agreed on the long-awaited €130 billion ($171.9 billion) deal after haggling into the early hours of Tuesday morning to settle the final details.
Officials said the meeting, which lasted nearly 13 hours, produced a plan that would reduce Greece's debt to 120.5% of gross domestic product by 2020.

Read full story by the Wall Street Journal here

8. Elections dead end
May-June 2012


After a national election in early May, no political party manages to get the majority required by the constitution for the formation of a government. The hung parliament is divided between supporters and opponents of the Memorandum (the bailout agreement between Greece and its creditors, which essentially stipulates severe austerity in exchange for further credit). Repeat elections are convoked and Alexis Tsipras, leader of Syriza, a liberal left-wing party, vows to repudiate the Memorandum.

At 37, and looking not a bit his years, Alexis Tsipras is clearly enjoying his moment. He vaulted to prominence less than two weeks ago, when his previously obscure left-wing party placed second in national elections with the promise of repudiating the loan agreement Greece's previous leaders signed in February.

Since then, he has engaged in a high-stakes game of chicken with Europe's leaders. While they have scrambled to put together contingency plans in case Greece exits the euro zone, Mr. Tsipras has calmly stated his case and let the rest of Europe sweat about the possibly disastrous ramifications if it does."It's true," he said Friday, with a smile and a glint in his eye, during an interview in his small office in the Greek Parliament. "I like to play poker."

Read full story by the New York Times here

9. History repeats itself
June 2012


Right-wing pro-austerity party New Democracy wins a narrow electoral victory at the repeat elections. It manages to form a coalition government with the former governing party PASOK to support a new bail-out agreement with foreign creditors. In exchange, the coalition government agrees to pass a wide range of austerity measures.

The pro-bailout New Democracy party came in first Sunday in Greece's national election and could gather enough support to form a pro-bailout coalition to keep the country in the eurozone. As central banks stood ready to intervene in case of financial turmoil, Greece held its second national election in just six weeks to try to select a new government after an inconclusive ballot on May 6. Sunday's vote was seen as crucial for Europe and the world, since it could determine whether Greece is forced to leave the joint euro currency, a move that could have potentially catastrophic consequences for other ailing European nations and the global economy. Although official projections late Sunday showed that no party will win enough seats in the 300-member parliament to form a government on its own, Greece's two traditional parties -- the conservative New Democracy and the socialist PASOK -- would have enough seats to form a coalition together. They have both expressed a willingness to work with other European nations to stay in the 17-nation eurozone.

Read full story by New York Daily News here