Page last updated at 20:48 GMT, Wednesday, 28 April 2010 21:48 UK

Greece's 'death spiral'

A cartoon in the Greek newspaper Kathimerini, April 2010
Greece's prime minister says the country faces an "Homeric Odyssey"

Malcolm Brabrant
BBC News, Athens

A little knowledge of ancient Greek mythology is required to understand the very prescient cartoon on the front page of today's Kathimerini newspaper.

It depicts Prime Minister George Papandreou in outer space encountering an alien craft and asking "Hey friend, is Ithaca this way?"

The newspaper is mocking the prime minister for saying that Greeks were facing a Homeric Odyssey when he announced last week that the country was triggering the international financial package.

Odysseus, the victorious Greek hero endured a perilous 10-year voyage trying to reach his home island of Ithaca after the siege of Troy.

In the past few days, since that announcement, Greece has been blown way off course and is facing its worst economic crisis since the Greek Civil War, 60 years ago.

Interest rates have taken off like an Apollo rocket, as international traders fear Greece will not be able to pay back its loans in full.

The markets are in meltdown, intensifying the downward pirouette of what the international financier George Soros has called "Greece's death spiral".

Years of austerity

Across the country, people have locked their televisions on to business channels to try to comprehend the whirl of figures that would have made Pythagoras' brain ache.

The highly-educated and cultured Greek population may not understand the complexities of bond markets, short selling and hedge funds.

But what they have fully grasped is that the panic on the markets means that they are facing years of austerity in order to repay the interest on debts racked up by a combination of corruption and tax evasion and as well as the spending habits of incompetent, profligate politicians.

Kriton Orfanos
Psychologist Kriton Orfanos fears his pension will be cut in half

Marching through the streets of Athens, civil servant Despina Koutsoumba summed up Greek resentment towards the external forces driving this crisis: "They want to leave this country without a future."

As fellow protesters chanted: "Down with the junta of banks," Despina complained: "Everything the IMF has been involved with leads to more crisis.

"If everyone in this country is poor, there will be no money circulating in the market.

"The state will have no earnings, because there will be nobody to pay any taxes.

"The IMF wants to create a crisis so that Greece, the state, has to sell off everything it owns, such as aeroplanes, the islands, even the sea."

Fellow demonstrator, bank worker Costas Karambas opposes plans by the Greek government to try to pay off its multi billion dollar debt and not default.

"We should opt for bankruptcy," he said. "Goldman Sachs, Deutsche Bank, Wall Street, they lent us the money. (Far better) they lose their money and people don't lose their jobs."

'New emergency government'

In Kathimerini this morning, the editor, Alexis Papachelas, cautioned against allowing such thoughts to gain traction.

He warned that refinancing or partial cancellation of debt would make the markets turn their backs on Greece.

"The only way Papandreou can succeed is by telling the truth about the state of finances, to adopt the new EU-IMF stabilization programme."

Mr Papachelas also urges the prime minister to create a new emergency coalition government to implement the programme.

Latest opinion polls suggest that about a third of Greeks would also favour a national unity government of Mr Papandreou's socialist PASOK party, the Conservative New Democracy Party, and LAOS, the right wing nationalists.

My five-year-old daughter wants to have a sister. I don't know if my husband will have a job from September. So I don't know if I can have another child.
Despina Koutsoumba, Greek civil servant

But bringing New Democracy into the government would stick in the craw of much of the electorate, because the previous conservative administration of the unlamented Prime Minister, Costas Karamanlis, is blamed for depositing Greece so deeply in the mire.

Many Greeks would like to see Mr Karamanlis and some of his cabinet prosecuted for massaging the country's economic statistics.

The New Democracy leader, Antonis Samaras, an economist, has acknowledged the failure of the previous government to tackle Greece's profound structural problems.

But he has adopted a populist tone during this crisis and has criticised the government for involving the IMF, saying it would subject society to pressures it could not withstand.

'Realm of dead'

German accusations that Greeks have been living beyond their means for years have fuelled inaccurate perceptions abroad that this is a nation full of idle playboys and party animals.

In Athens, people endure some of the highest prices in Europe as well as lower average wages and pensions than those enjoyed by their EU peers.

Demonstrators shout slogans against government's austerity measures during a protest outside the Greek Parliament in Athens on April 27, 2010
Greek voters have blamed the IMF for the country's financial crisis

At one protest rally, Kriton Orfanos, a middle-aged psychologist at a family centre told me the latest austerity measures had resulted a loss of 150 euros from his 1300 euro monthly salary.

He was afraid that his future pension would also be slashed in half to about 600 euros.

Such fears are realistic, according to Daniel Gros, the director of the Brussels based think tank, the Centre for European Studies.

He says that 30% of Greece's GDP is spent on social security and pensions.

"Significant cuts in benefits seem unavoidable," he says.

And so for Greeks like Despina Koutsoumba, the Odyssey of self discovery promised by George Papandreou resembles a vision from Hades, the underworld of the ancients.

"This is supposed to be the most productive, creative part of my life and yet I won't be able to do anything for five or 10 years, in surroundings that will be miserable and poor," she said.

"My five-year-old daughter wants to have a sister. I was planning to do so but now I am afraid. I don't know if my husband will have a job from September. So I don't know if I can have another child."

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