Greek Prime Minister Papademos gave a long introductory speech to his cabinet meeting last Friday (10/02/12). Considering his previous speeches and announcements, he devoted a big part of his speech by describing what would happen to Greece and Greeks should we end up in a disorderly bankruptcy.
Here’s a hasty translation of that part:
A disorderly bankruptcy would throw our country into a disastrous adventure. Circumstances would create economic chaos and uncontrollable social explosion.The adverse consequences of a disorderly bankruptcy would be multiple and extremely painful for the Greek economy and society.
The state will be unable to pay salaries, pensions, to cover basic functions, such as hospitals and schools, while we will still have a primary deficit of 5.2 billion euros. Which means that the state revenues would be insufficient to cover our expenses, even if we would stop serving our debt.
Direct spending cuts which would have to go in case of a disorderly bankruptcy would result in real wages and pensions collapse, especially since it would be even more difficult to collect taxes.
The import of basic goods such as medicines, oil, machinery, etc., would be particularly problematic, as the country, both public and private sectors, will lose all access to borrowing and liquidity will shrink. Businesses would close en masse, unable to raise finance.
The living conditions of Greeks in the case of a disorderly bankruptcy would collapse and the country would drift into a long spiral of recession, instability, unemployment and destitution.
These developments will lead, sooner or later, at the exit from the euro. From the core country of the Eurozone, Greece would become a weak country on the fringes of Europe.
The full speech (in Greek) can be found here.
Never before has he spent so many words to describe what his vision of Greece is. Never before has he used more words to inform us how the situation can improve. Never before, during his duty, has he told us where exactly we are led with this new round of measures. For the first time he chose to describe the worst case scenario, a psychological blackmail trick that has been abused repeatedly during George Papandreou’s two years in power.
It’s not a new or unique phenomenon in politics. British film maker Adam Curtis described it in his 3-part documentary called “The Power of Nightmares”.
In the past, says Curtis, politicians were competing each other by offering a better future. Citizens were choosing the best and more feasible future and would vote it in elections. In the past decade or so this has changed. Politicians are now competing by offering the least worse future for the citizens, who live in a state of fear of what could happen to them.
Lucas Papademos just joined the group.