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And after the Greek government began to send an SOS that government finances sink, credit agencies, in turn, began to cut the credit rating of Greece and its banks. Instead of taking a lesson after the first downgrading, the socialist government continued to tour Europe and the world, telling how tragic the situation in Greece is. This inevitably led to speculation that Greece could go bankrupt. A country’s bankruptcy, however, is not as simple as a company bankruptcy (I say it with respect and apology to the owners who have experienced bankruptcy). As it can occur to all of us, the people who manage billions of euros were not born yesterday, to say it plainly. They have invented the financial tool called CDS (Credit Default Swap), which actually is insurance of the government bonds and is activated in the event of bankruptcy, also known as a credit event - bankruptcy, suspension of payments, debt restructuring and so on. In other words, this is what happens when a country does not pay on time or at all its obligations to investors.

The whole drama about Greece was offset by the financial support the country received from the International Monetary Fund (IMF), the European Central Bank (ECB) and the European Commission (EC). In return for the low-interest loan, which allowed the Socialists to continue to pay salaries and pensions, Greece has agreed to make some changes in the functioning of the public sector and the management of its finances so as to fit within its means. In other words, it has agreed to implement fiscal consolidation and structural changes. In early May, 2010 George Papandreou thanked Brussels (EC), Washington (IMF) and Frankfurt (ECB) for the 110 billion euros and promised to arrange the things in the country so that the deficit falls to zero at the end of 2014. Then, the country would start producing primary budget surpluses, which means that the revenues exceed expenditure in order to pay its foreign debt with the positive balance.

None of this seems possible a year after the beginning of the recovery program. The hopes of the Minister of Finance Georgios Papaconstantinou were that when the credit rating agencies see how well the Greek government is doing with the deficit reduction, Greece would be welcome and the country would be able to borrow money from the capital markets again at the end of 2011. The deficit actually fell by as much as 5% and reached 10.4% of the GDP in late 2010, but unfortunately it was at least two points higher than what was planned for that period. Moreover, since the government has shown determination to cut the pensions and salaries and to raise the taxes, it did nothing to restrict substantially the bloated public sector and the costs it makes at the expense of the ordinary taxpayer. Nothing significant has been done to limit tax crime, and for state enterprises, which cost billions of euros per year and have no productive return.

In the overall picture of discontent and resentment, the Greeks sank in the specific terms of economic analysts without being aware that they themselves should initiate the change.