The European Union, the European Central Bank and the IMF agreed a 110 billion euro bailout for Greece last year.
This was supposed to help the state pay off its debt, lead to growth and stop the “contagion” spreading to other countries.
It has failed. The austerity that was part of the bailout has further wrecked Greece’s economy. Its debt is growing and it has entered its third year of recession.
Economic chaos has spread to Ireland and Portugal—and looks likely to hit Spain next.
Greece is unlikely to be able to raise the billions of euros that it needs if it is to pay its debts next year.
Speculators are terrified that Greece will default—and have made it prohibitively expensive for the country to borrow money.
A Greek default could see the same kind of turmoil spread through the global system as happened after the collapse of the Lehman Brothers bank in 2008.
There are also rumours that Greece may try to leave the euro.
The bailout was never meant to aid the Greek people, but to help European banks get the money they were owed.
British banks held almost £12 billion in Greek assets at the end of last year, but French and German banks are the most exposed.
Austerity has devastated workers’ living standards.
Unemployment stood at 15.1 percent in January—meaning almost 800,000 people are out of work. The rate has more than doubled since 2008.
A thousand jobs are being lost every day. The average household has seen a drop in its spending power of
40 percent over the past year.
“Workers have suffered,” said Seraphim Rizos, a teacher in Crete. “Our pensions, salaries, rights and healthcare have all been reduced.
“Last year I earned around 1,300 euros a month. Now I get 1,200.”
The bonuses that workers get during holiday periods have been slashed.
These guaranteed many public sector workers a decent standard of living in a low wage economy.
Seraphim said, “What is known as the 13th salary, which we get at Christmas, used to be 800 euros. It was 380 euros last Christmas.
“The 14th salary, which we get at Easter, used to be 500 euros. This Easter it was 200 euros.”