Papademos: We are one step away from zero

"Today is not patriotic to throw out shields, but we must unite to make the difficult decisions necessary to save the country," said Lucas Papademos, asking the Greeks to find courage and fight to prevent a disorderly bankruptcy.  The prime minister had three main objectives in the message he addressed to the people: 
  • to warn that a possible disorderly bankruptcy would bring infinitely greater suffering than the painful measures that are currently enforced upon the Greek people
  • to assure that with the new loan agreement the entire public debt of Greece will be reduced by 100 billion euros
  • to assure that as long as the program is implemented properly, then it wil restore the financial stability and international competitiveness of our economy, which will return to sustainable growth probably from the second half of 2013
Papademos chose to answer the question that is heard everywhere in Greece, whether a bankruptcy would be preferable to the implementation of the draconian adjustment program imposed by troika.
"Some people say: We prefer bankruptcy from a financial plan that includes such painful measures. They are grievously mistaken, or dangerous demagogues. A disorderly bankruptcy would create conditions of economic chaos and uncontrollable social explosion." 
"The savings of the citizens would be at risk. The State would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, as it still has a primary deficit of over 5 billion euros. This means that State revenues are insufficient to cover expenses, even if stopped serving the debt.
The import of basic goods, such as pharmaceuticals, oil and machinery, would be problematic, as the country, public and private sector alike, would lose all access to borrowing and liquidity would shrink. Businesses would close en masse, unable to raise financial aid. Unemployment, which is already unacceptably high, would rise even further.
The living conditions of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to the exit from the euro." 

According to the data presented by the PM, "the economic program and the loan agreement which will accompany it are of major importance for the country's future. The new loan agreement secures our funding with 130 billion euros and enables us to reduce the existing debt by about 100 billion. By reducing the debt we will release valuable resources for economic development and social protection and create conditions of security, stability and confidence." 

"The fact that Greece is currently drawing the biggest ever financial support under such favorable terms, reflects the will of our partners to support our stay in the euro." According to what the PM said, our European partners are pushing us "to capitalize on this support, by creating the conditions for sustainable participation in our common currency. We need to restructure our economy."
"It would be the biggest defeat of Greece after the junta, if due to despondency or lack of sense of responsibility, the country went bankrupt and out of the euro."
Papademos stressed that "the adjustment of our economy will not end in a year. To complete the changes will require hard work, continuity, consistency, cooperation and unity of all social and political forces. We must have confidence in ourselves and faith in the need to change our country."
"We will not get out of the crisis without sacrifices. We are proud and conscientious people. We know a thing or two about fighting. And this today is the fight of our country. To provide our children a Greece of European stability, prosperity and democracy that we won the past thirty years."

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