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What does bankruptcy mean for Greece?

By Marlene de Wilde     Feb 11, 2012 in Politics
In a speech to the nation on Saturday night, the Greek Prime Minister outlined the consequences of the latest bailout measures not being ratified in parliament.
In a calm, controlled manner, Mr Papademos made it very clear that those who propose bankruptcy as a better solution to Greece's woes than agreeing to painful austerity measures were misguided. "Some say that rather than implement such a painful economic program, it is better to declare bankruptcy. A disorderly default will lead our country to catastrophic adventure. It would create conditions of uncontrollable economic chaos and social unrest. The state would be unable to pay wages and pensions or to cover basic services such as schools and hospitals".
In his 20 minute speech, Papademos went on to emphasize that imports such as medicines and fuel would be drastically affected and there would be a mass closure of businesses. He said he acknowledged the suffering and hardships of the Greeks but said that these would be much worse should the country default. "We are fully aware that the measures will mean long term painful sacrifices for the people who have already suffered so much. But, in the case of a disorderly default, the country would be swept into a long painful recession of instability, unemployment and unpaid debts These would lead, sooner or later, to the exit from the euro".
In a report on Mega earlier in the evening, Professor of Economics, Panayiotis Petrakis, said that in the case of bankruptcy, nobody will pay anybody. "It will be a period of social and political isolation."
The report went on to say that there would be no goods or foods in supermarkets, no medicines and no petrol in petrol stations. Five hundred thousand people would lose their public service jobs and pensioners would be left to their own fate. Banks would lose their lending ability and ATM's would be disabled.
Papademos said, "It will be the biggest failure of post-dictatorship Greece if, out of want of soul, sheer negligence, lack of responsibility or by fatal error, this country finds itself bankrupt and out of the euro".
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