Helena Smith, who has reported from Athens for more than 20 years, says the country is on the edge of a precipice
Despair has enveloped Greece. This weekend the bankrupt nation, for that is what it is, began negotiating the latest act of a drama that many fear will end in catastrophe – financially, socially and politically.
In an electric atmosphere, with thousands demonstrating outside parliament, MPs began debating the arduous terms of a €130bn (£110bn) rescue package that the interim prime minister, Lucas Papademos, insists is the only way left to avert economic collapse.
"A disorderly default," he said, referring to the 20 March deadline that Greece faces of repaying €14.5bn in maturing debt, "would plunge our country in a disastrous adventure. It would create conditions of uncontrolled economic chaos and social explosion."
With today's vote on the loan deal seen as a ballot on euro membership, political chiefs on both the left and right also weighed in, urging MPs to vote for the accord despite unpopular austerity measures that are likely to define the lives of Greeks for decades. "If we do not dare today, we will live a catastrophe," said the former prime minister and Socialist leader George Papandreou. "The recipe … isn't right or wrong; it's the only one available."
Antonis Samaras, the New Democracy party leader and a vehement opponent of the fiscal remedies meted out to Greece – until participation in Papademos's emergency national unity government forced him to change tack – agreed. The bailout was the only route to survival. "It distances us from bankruptcy, looting, the chaos that would follow," he said.
But in both parties MPs are far from convinced. The country has reached a crossroads, of that there can be no doubt. But almost two years since it was first "rescued" with €110bn, the nation's acceptance of this latest lifeline puts it in a perilous place. Politicians, almost without exception, believe they are "damned if they do and damned if they don't".
After more than two decades reporting from Athens, I can only concur. For the truth – as unpalatable as it may be for the IMF, EU and European Central Bank, Greece's "troika" of creditors – is that, far from plugging the country's budget black holes, the harsh austerity pursued in the name of deficit-reducing goals has pushed it towards economic and social collapse. Relentless wage and pension cuts, tax rises and cost-cutting reforms have left the country a shadow of itself. In its fifth successive year of recession, Greece is a hollowed-out version of what it once was, coming apart at the seams a little more with each day. Men and women forage through rubbish bins late at night. More sleep on the streets. Last week as Eurostat, the European statistic agency, announced that poverty had engulfed more than a third of the nation, it was revealed that unemployment had also exceeded one million people, from a record 19% to 20.9% in one month.
"Nothing functions. Nobody pays anybody any more and the state is not just crumbling but in complete stasis," said Giorgos Kyrtsos, a prominent political commentator. "These guys," he said of officials in the troika of European agencies negotiating the bailout, "should really lose their jobs. They've miscalculated everything. I understand on Friday the police trade union called for their arrests. Well, maybe they are right!"
With the rhetoric at such levels, and none of the sacrifices having improved the situation so far – at more than 10% last year, Greece's budget deficit was way off target – it is easy to see why, among politicians at least, there is little stomach for more. "We don't want to turn our country into a marginalised third world state where citizens are forced to live on slave wages," said one MP, requesting anonymity ahead of the vote. "If we go along with these measures, that is exactly what will happen."
A series of resignations by ministers on Friday, unwilling to support the latest measures, not only underlined the panic of the political class – in a country where MPs no longer feel safe walking in the streets – but proved how tenuous public support is for the bailout. If there is to be a social explosion, many said that it would come because Greeks had been pushed too far. The loan agreement not only will lead to job losses and more cuts in salaries and pensions but a 22% reduction in the minimum wage.
Ferment on the street is back. The clashes during last week's second general strike are generally expected to be a prelude to something much more ominous. "There is going to be a huge social eruption," said Apostalia Kiroudi, an unemployed jeweller shouting herself hoarse in front of parliament.
"Our politicians lied to us. They never told us the truth, and now they want to pass policies that they have no mandate to do. As that sign says over there," she said, pointing to a friend holding a placard, "We choose to be free. Keep your money." But that was one of the milder slogans.
Unlike two years ago, when the angry graffiti demanded that the "IMF go home" and "reject austerity" it now exhorts protesters to "murder bankers" and "rise in rebellion" and "never be slaves". The spirit of resistance shows no sign of abating. With support for the left, including the militant Communist party (KKE), growing by the day, opposition to any cost-cutting reforms is bound only to increase. "Martial law has to be imposed for these measures to be implemented," said Kyrtsos.
"In a democracy, they will never pass because people will resist them. The loan agreement may be voted through, just as our foreign lenders want, but it will be a hollow victory," he said, adding that after general elections, possibly as early as April, the entire political landscape will have changed. "Despair is growing. We are soon going to see incredible scenes with everyone taking to the streets if these measures are applied. Something has to give, and at this point it has to come from Europe."