Coruscation

During its first decade of membership, the European Union's generous subsidies helped catapult Greece out of its Balkan backwardness. By the time 1997 came around, and Europe's leaders prepared to introduce the single currency, some were hailing Greece, enjoying steady economic growth of more than 3 percent under the then Socialist government of the prime minister, Costas Simitis, as a plucky economic stalwart.

For Athens, Mr. Papantoniou recalled that joining the euro was a matter of pride and necessity, as it would stabilize the country's economy by fending off predatory speculators, while allowing Greece access to credit at low interest rates because it was part of the rich euro club.

"Once we were in line to join the euro, we started to transform from a third world country to one that aspired to look more like Switzerland," he said.

But Greece's path to the euro was far from assured. Public opinion in Germany, scarred by the memory of wartime hyperinflation, was always wary of giving up the Deutsche mark, and the German government insisted on tough conditions for the countries that wanted to join. Budget deficits were supposed to be below 3 percent of gross domestic product; debt was not to exceed 60 percent of G.D.P. and inflation could not top 3 percent.

In December 1996, the currency's rules were toughened in a so-called Stability Pact, intended to punish with costly fines countries that persistently broke the rules once inside the euro zone. The unspoken intention was to raise the barrier for Southern European countries, which were seen as having looser, more inflationary economic policies.

Germany wanted the fines to be automatic, but other countries, led by France, put the onus of enforcement on political leaders in the European Union. (No country, Greece included, has ever been fined even though the rules have been routinely broken by most countries in the euro zone.)