GREECE GETS HELP
By DAN BILEFSKY and LANDON THOMAS Jr.
Published: May 2, 2010
ATHENS - Greece announced Sunday that it had reached an agreement on a long-delayed rescue package
that will require years of painful fiscal belt-tightening, but the deal probably will not defuse the potential
threats to other European countries also suffering from mounting debts and troubled economies.
"I have done and will do everything not to let the country go bankrupt," Prime Minister George
Papandreou said in a televised address that urged Greeks to accept "great sacrifices" to avoid
The bailout, which was worked out over weeks of negotiations with the International Monetary Fund and
Greece's European partners, calls for as much as €110 billion, or $145 billion, in loans intended to stave
off an immediate debt default and stop the spread of economic contagion to other parts of the region.
But analysts warned that Greece itself has not yet solved its fundamental problems and that other
sovereign debt crises could arise as lenders and market speculators turn their attention to a handful of
similarly vulnerable nations.
"The immediate impact may be soothing, but the inflammation will soon show up again," predicted
Edward Hugh, an economist in Barcelona who writes for the influential Fistful of Euros blog. "My feeling
is the rot has now gone too far."
In Greece, Mr. Papandreou, the scion of a Socialist dynasty whose father, Andreas Papandreou, helped
erect the sprawling Greek welfare state when he was prime minister in the 1980s, sought to embolden
Greeks to accept what is expected to be the greatest overhaul of the state in a generation.
"I want to tell Greeks very honestly," he said, "that we have a big trial ahead of us."
While the bailout provides a lifeline to the Greek government, similar challenges lie in wait for Portugal,
Spain and perhaps Italy, the other countries on Europe's deficit-wracked southern tier. Moreover, outside
the nations that rely on the euro as their common currency, Latvia, Hungary and Romania are all faltering
in their own efforts to meet economic and fiscal goals set in conjunction with the I.M.F.
And even Britain, which has its own currency and so far has had little trouble borrowing at reasonable