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Ex PM Papandreou says his gov’t explored Grexit option and refusal of first bailout

Former prime minister George Papandreou said that his government explored all possibilities including refusal of first bailout as well as exit from the eurozone before deciding to bring the International Monetary Fund in the country in May 2010.

Speaking on Real FM radio on Thursday, the former leader of PASOK said that his government considered what would happen if it refused the country’s first of three multibillion-euro loan packages, granted in exchange for tough reforms and austerity measures.

“A ‘no’ would likely have meant bankruptcy the very next day,” Papandreou said, defending his decision to agree to the first loan package of 60 billion euros. “A ‘no’ would have cost the Greek people a lot more than what they have already paid. There wasn’t even a mechanism at the time. Would you have risked it? I didn’t.”

Papandreou said the PASOK government also explored – and rejected – the option of leaving the eurozone and returning to the drachma, a scenario still championed by some who argue it would give Greece more fiscal independence and latitude.

“We decided we would take it on our own shoulders since the opposition refused to give us any support,” Papandreou said, adding that he had asked conservative New Democracy leader Antonis Samaras to back the government’s decision to sign Greece up for financial assistance.

“I could have gambled to see if he was bluffing, but would you put the country at such a potential risk? Would you play its future in a dice roll?” he said.

Papandreou also criticized the current government and Prime Minister Alexis Tsipras in particular for dragging out negotiations with creditors over the third bailout package and coming away with stricter austerity measures and no agreement on debt relief.

PS hm… he could have opted also for a referendum and have asked the Greek people on such a crucial issue. Speaking of a referendum in Cannes in October 2011 was too late – for the creditors. They replaced him in zero time.

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