Al Jazeera Blogs


Greece and the IMF

Nation braced for further austerity measures as the government negotiates terms for an emergency loan.

Last modified: 22 Apr 2010 09:25
AFP photo

It's another general strike in Athens today; we're expecting a big march in the city centre by trade unions. Schools and government offices will be closed, and hospitals will only deal with emergencies.

The entrances to some of the luxury hotels and department stores just over the street from the Al Jazeera office have been blocked by striking workers for the past two days.

The centre-right Kathimerini newspaper is furious, saying this "is taking protest too far", tarnishing Greece's image in the eyes of foreign visitors.

"What do these people want? Are they trying to push Greece into the abyss, to send us back into the Dark Ages?" it asks.

But, as the editorial staff at Kathimerini well know, Greece's image has taken quite a pounding already, and the country is now internationally synonymous with financial mismanagement, corruption and profligacy.

At least the air-traffic controllers have pulled off a small PR coup; they were also meant to hold a 48-hour strike from today, but decided not to enforce it in view of the widespread travel chaos already affecting Europe.

Officials in town

Meanwhile, officials from the International Monetary Fund and the European Union are in town, negotiating terms with the finance ministry.

The consensus among economists here is that it is now inevitable that Greece will have to take up the offer of an emergency loan from Eurozone partners and the IMF.

This loan could be worth up to 45 billion euros. The Greek government denies that this is a bail-out, because, in theory, the money will be repaid.

But the very reason why Greece would use these emergency funds is because the interest rates on them will be considerably less than those the markets are now demanding.

To me, that sounds like a bail-out.

Historic moment
So, we're approaching a historic moment for this country, and for the whole Eurozone. The last few months have not been pretty.

Europe's reaction to this gathering crisis has been slow and poorly co-ordinated, as a result of competing national self-interests.

Much of the anger on the Greek streets today will be directed at the IMF. Greeks are traditionally suspicious of outside intervention.

On the Greek left, there’s a strong tradition of anti-Americanism that dates back to the civil war and the military junta.

The presence of the IMF here is easily equated in many people's minds with intervention from Washington.

Weary acceptance

There’s a widespread fear that it will impose further austerity measures on the Greek population.

Still, despite the protests, the general mood here now is one of weary acceptance.

Tthe socialist government of George Papandreou remains fairly popular, and most Greeks accept the fact that a long period of belt-tightening is now inevitable.

Unfortunately, unemployment is rising, and the economy is still deep in recession.

What is impossible to judge is whether the public mood will change, as the pain deepens. That, if you like, is the 45-billion-euro question.