The Financial Crisis: Five Years Later

Riots in Greece: George Papandreou Speaks


Riots in Greece: George Papandreou Speaks

Photograph by Angelos Tzortzinis/AFP/Getty Images

Dec. 15, 2010: Kostis Hatzidakis, a former member of the European Parliament, is bloodied during riots in Athens

Photograph by Kostas Tsironis/Bloomberg

In the summer of 2010 more than 100,000 people took to the streets of Athens to protest spending cuts and tax increases in exchange for a €110 billion bailout. Three people died. The protests continued all year. What was that like for you?
It wasn’t a happy time. We had an initial [bailout] program in March, but because of the indecisiveness of Europe and particularly Germany, the cacophony of the different views, the market didn’t calm and the spreads kept growing. It was a war-like situation. If a country goes bankrupt on your watch, it’s like losing a war. This was like fighting a war. We had to do whatever was necessary in terms of protecting our country. This strict program is what people protested. The people that died did not die because of state intervention or police intervention. I was very, very careful that we did not use the type of force that could endanger anybody who wanted to protest. This was an action by younger so-called anarchists who threw Molotov cocktails into a building. I went to the spot where the people died and put a flower there just as a symbolic act.

Did the failure of Lehman Brothers hurt Greece?
Lehman Brothers was not just a Lehman Brothers problem. It was a systemic problem. What Greece revealed was that there was a systemic problem in the euro zone. The markets and the rating agencies were very reactive after what happened on Wall Street. Had the markets been not as fearful of the Lehman Brothers psychology, Europe would have said, “OK, you’ve got to work to cut your budget.”

We would have had a number of years to cut our budget in a less drastic way, emphasizing more the necessary reforms. Just cutting when you don’t have a competitive economy is not the issue. If Lehman had not been allowed to fail, we would not have had the Wall Street crash, and therefore the reaction to Greece’s deficit would have been much more manageable. I want to own up to our own failings, too. This was an interaction, as it was with Lehman Brothers, of course, between our own problems and the problems of the market.

What’s next?
We will get through. I believe it. We will get to a primary surplus this year, even though with much difficulty. I’m fighting to help Greece in any way I can. I’m writing a book right now.

Can you see yourself being prime minister again?
I’m at a moment where I’m satisfied to be able to not have to be challenged by that prospect.

Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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