That’s where Greece is.

ATHENS/LUXEMBOURG (Reuters) – Prime Minister George Papandreou asked Greeks on Sunday to support austerity steps and avoid a "catastrophic" default, as European finance ministers discussed extending tens of billions of euros of aid to Athens.

Addressing the Greek parliament, Papandreou appealed for the nation to accept deeply unpopular tax hikes, spending cuts and privatisation plans which international donors have demanded as a condition for the aid.

"The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks and the country’s credibility," Papandreou said at the start of a confidence debate on his new crisis cabinet.

Greek officials have said the country will face default in mid-July if the European Union and the International Monetary Fund do not hand over a 12 billion euro tranche of emergency loans by then.

But when that happens, the passengers insist that the train keep moving anyway.

Athenians used to stop off at Syntagma Square for the shopping, the shiny rows of upmarket boutiques. Now they arrive in their tens of thousands to protest. Swarming out of the metro station, they emerge into a village of tents, pamphleteers and a booming public address system.

Since 25 May, when demonstrators first converged here, this has become an open-air concert – only one where bands have been supplanted by speakers and music swapped for an angry politics. On this square just below the Greek parliament and ringed by flashy hotels, thousands sit through speech after speech. Old-time socialists, American economists just passing through, members of the crowd: they each get three minutes with the mic, and most of them use the time alternatively to slag off the politicians and to egg on their fellow protesters.

And Don Surber does some digging and notes that Nobel-Prize-winning, former Enron advisor Paul Krugman was all behind the taxing and spending in Europe because deficits didn’t matter. But all of a sudden, for Greece, now, they do, according to that same Krugman. But since the solution is to do precisely the opposite of what he’s told us in the past, he won’t supply his answer to the crisis. This time. He’ll just lecture the US to do the same things that Greece did that got them into this mess.

Sometimes it seems he deserved that prize in Economics as much as Obama deserved his prize in Peace.

Filed under: EconomicsGovernment

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