Greeks may have resented Germany’s reluctance to extend a helping hand to a country hit by financial woes. However, Wolfgang Schaeuble was amongst the 16 eurozone finance ministers who have agreed on Sunday 11 April 2010 to provide 30bn euro in loans at interest rates of 5% to debt-stricken Greece. The IMF is poised to provide another 15bn euro. But the IMF is moving in sooner than thought.
The eurozone agreement was received with relief from Athens and Greek Prime Minister George Papandreou hailed it as a message to speculators: “nobody can play with our common currency”, he said. “Nobody can play with our common fate”.
The Greek media warned that eurozone rescue was by no means the end of the affair. Greece successfully raised 1.56bn euro on Tuesday and already on Thursday 15, Greek finance minister wrote to the EU, European Central Bank and IMF to discuss the rescue plan. Today, Friday 16, EU finance ministers agreed to create a permanent mechanism to cope with any financial difficulties the EU might face in the future.
IMF and Financial Aid
Prime Minister Papandreou told parliament that the 45bn euro financial aid mechanism will be activated if the country needs it. Already IMF officials have agreed to come to Athens on Monday 19 April to discuss the details of the rescue of debt-stricken Greece. Everyone wants to avert a potential Greek bankruptcy but the intervention of the IMF was resented by many.
However, by seeking talks with IMF and EU officials Greece is moving a step closer to accepting EU and IMF help. On Thursday European Central Bank council member, Ewald Nowotny, revealed that Greece has initiated the process of activating the bailout mechanism. It seems that the Greek Prime Minister is preparing his country for such an eventuality.
The fact that the IMF is poised to rescue Greece does not mean that the country is bankrupt, George Papandreou told MPs. “It means that the stability programme, the terms ... go through the IMF”. The mechanism is a “safe harbour” for Greece where it can be protected from market speculators. “It is my duty to protect the motherland from bankruptcy”, he added.
Greek Bankruptcy
Greece has had a long history of foreign interventions in its internal affairs and the Prime Minister was under fire from the opposition for allowing the IMF to determine the country’s economic policy. It seems that memories of the 1893 Greek bankruptcy and the International Financial Control Commission overseeing the payment of the interest of the country’s large external debt in 1897 die hard.
Lito Apostolakou - Lito is a historian with an interest in digital archives and online historical resources. She is the author of blog Palimpsest.
