Ex-PM says analyzed every scenario before Greece’s first bailout, including default

Former prime minister George Papandreou said his cabinet explored the possibility of refusing a bailout deal from international creditors back in the spring of 2010, when the ex-socialist leader likened Greece to a “sinking ship.”

Speaking on Real FM radio on Thursday, the former chief 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.

“As much as they came out at the polls as anti-memorandum forces, the Samaras and Tsipras governments stuck exclusively to the memorandums because they had no other program,” Papandreou said.