Start of the crisis.

History repeats itself in Greek debt crisis

GMT 15:57 2011 Sunday ,24 April

Arab Today, arab today History repeats itself in Greek debt crisis

Greece parthenon

Greece parthenon Austere-looking Europeans dictating economic policy are nothing new for Greece which went bankrupt over a century ago and had to accept an international commission of control over its finances.
The year was 1898. A much smaller Greek state had just lost a disastrous war against the Ottoman Empire and was forced to pay reparations when the government had officially declared insolvency five years earlier.
Determined to collect past loans, Britain, France, Germany, Russia, Austria-Hungary and Italy sent officials to monitor state receipts, taxes and customs duties that would repay Greece's obligations.
"The Greek state was born in debt," notes Stavros Thomadakis, a professor of business economics and finance at Athens University.
"In a way, debt is Greece's original sin," he told AFP.
Fiscal profligacy caught up with Athens again last year when greater investor scrutiny of sovereign debt cast a spotlight on its parlous finances.
The incoming Socialist government of George Papandreou had just revealed that the size of Greece's deficit had been misreported and pledged to set the record straight, but the confidence scare that followed caused Greek loans to dry up.
With insolvency looming, Athens was forced to appeal, on April 23 2010, to its European Union peers and the International Monetary Fund for a bailout loan of 110 billion euros ($159 billion) in return for a sweeping overhaul of its economy.
The unpopular quarterly audits by EU and IMF officials that followed echo a situation described in "The Control", a long-lost play by George Isaias that satirised the country's woes some 110 years ago.
Revived this year by an Athenian troupe, the 1900 play chronicles the arrival of two foreign loan officers, the stiff German Von Gdare (Von Flayer) and the skirt-chasing Frenchman De Fagan (De Glutton), and the efforts of their Greek hosts to mollify them.

The closeness of the script to Greece's current predicament is not lost on play director Costis Kapelonis.
"Once again, it's a control that exceeds the powers of the Greek state and has an impact on everybody's daily life," he says.
Then, as now, major military spending took a large chunk of state funds.
George Dertilis, a director at the Ecole des Hautes Etudes en Sciences Sociales in Paris, noted that the Greek state directed over 33 percent of its spending on the army from 1830 onwards.
At the time of the foreign powers' commission, says Athens University's Thomadakis, the image of creditors "drinking the blood of the country" was deeply embedded in popular culture.
"Today, people see the EU and the IMF as an occupation force even if this is not the case," he says.
And although Isaias' play closes with a call to resistance, Greece actually managed to rebound from bankruptcy, Thomadakis adds.
"The first decade of the 20th century was one of Greece's most productive, to a great extent because of the order restored to the country's finances," he said.
Purported samples of Greece's ornate 1898 bond certificates, backed in gold by the governments of Britain, France and Russia, can today be found on Ebay for under $10.
"You are about as likely to collect on this bond as you are Greece's current debt!" reads one tongue-in-cheek comment.
In another brush with history, albeit unintentional, Papandreou's ruling Pasok party was for decades headquartered on an Athens street named after Harilaos Trikoupis, the visionary prime minister who was forced to declare insolvency in 1893.
The Pasok party moved to new offices before the start of the crisis.

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