Much as we hated to hear about it, the Eurozone crash had been predicted by many banks three years ago. And Greece almost worked its way to its bottom, before raising itself from its own ashes like a Phoenix. As banks opened up on 20th July 2015 and the government seems to be taking a recourse to help the country finally, we recount the Greek saga of financial crisis through pictures that shook the world.
The story began in 2009 when after an eventful election, the old government headed by PM Karamanlis was replaced by George Papandreou in the month of October.
By December, 2009, the new government announced that fiscal condition of the country and its position in the Eurozone had been misrepresented by the former government, and appropriate documents and records indicate towards a debt crisis.
From 2009 December to 2011 June a two-fold approach in stopping the crisis occurred. Firstly, the Greek government issued several austerity measures to reduce public spending. The Eurozone came together grant a 145 billion euros rescue amount to help the country survive.
Trade Unins called a 24 hour strike in June 2011 to reduce austerity measures and attract more funds. As a result of this strike, the European Union came forward with another bailout offer of 109 billion Euros.
Demonstration At Athens in 2011 against the Austerity Measures
Greece lost its position as an elite member of the European Union and in most credit rating agencies, it was considered at a high risk level that was close to default. The Union decided to write off 50 percent of the debt amount if the government agreed to more severe austerity measures.
The bail-out was countered by a referendum by the PM of Greece who resigned soon after issuing the referendum, in the face of violent protests in Athens and rest of Greece. His resignation in November 2011 puts Lucas Papademos as an interim Prime Minister. He was head of the Bank of Greece and was responsible for bringing Greece back to its financial stable condition before spring 2012, when the elections were scheduled.
He succeeded in getting a Debt Swap deal with major credit agencies from the private sector who had funded Greece in the past, with the help of a 130 billion Euros deal with the EU. This led to protests all over again demanding anti-austerity parties.
After the failure to form a working coalition amongst the leading three parties chosen in May 2012, fresh elections were held in June 2012. The results of this election led to the rise of Antonis Samaras who created a coalition using the Pasok party and weaker groups that scored low in election results.
Under the new Prime Minister, Greece saw a reduction in protests, but an increase in unemployment. The scores rose to 26.8 percent (overall) and 60 percent (youth) by January 2013. In the meantime, a 13.5 billion euros bailout plan with tax rises and pension cuts was passed by the Parliament, which happened to be the fourth bail-out plan in the previous three years.
With step by step measures, like arresting Golden Dawn party leaders, closing down public broadcaster ERT to cut costs, and presenting a new budget, Prime Minister Samaras laid the foundation of what he called an end to the six year ld Recession in Greece. But there still was a long way to go.
By 2014 April, the Government attracted the consent of 4 billion euros bailout form the European Union and also drew 4 billion dollars from the world by selling long term government held bonds. Greece was growing steadily here, but then elections struck!
Syriza party won the elections and formed a coalition government in the European Union in May 20014 and Syriza won the parliamentary elections in Greece in 2015 January and appointed Alexis Tsipras as the Prime Minister. They cut down austerity measures and reinstated the ERT according to its manifesto. The result was disastrous.
Almost identical to pouring water on the Samaras government endeavors, these acts of the Syriza government forced the European Central Bank to stop emergency funding to Greece in June 2015. All banks were closed down in Greece and capital controls announced. The European Central Bank demanded a referendum to the original bail-out plan.
Greece goes for an election where the voters reject the referendum. The negative feedback forces the government to ask for a new way out. 17 June 2015 elections bring back New Democracy party into power, which is entirely pro-austerity.
As a result, the Greek government is forced to enter into a new bailout with even stricter austerity measures and no debt write-off. Emergency Parliament sessions are now being held to decide the fate of the country’s new bailout programme.