With protests now a daily feature of Greek political life the prime minister reshuffles his government today, but the markets fear he is simply rearranging the chairs on the Titanic.
Greece’s financial crisis is now acute, with some analysts saying debt default is now a question of when, not if. The EU and IMF want to give Athens more money, but the price is even tougher austerity for a people already impatient with the effects of Austerity Mark One.
“I’ve learned to fight battles in my life for my country, for citizens, for values, for the people. I will continue on the same path of duty, along with my Socialist party, the civil service and the Greek people. That is why I am forming a new government and immediately after, of course, I will ask parliament for a vote of confidence,” said Prime Minister Georges Papandreou.
Greek debt is now the most expensive in the world to insure. The spectre of default has sent world stock markets to a three-month low and the euro is tumbling. Big creditors like German and French banks are warning everyone to hold their nerve.
“We’re all making efforts on Greece because it’s important for the eurozone,” said French Finance Minister Christine Lagarde.
Eurozone finance minsters have failed to agree on a new 120 billion euro rescue package financed from private holders of Greek debt. The French and German leaders hold a crisis meeting today.