RIOTS, petrol bombs, tear gas and strikes greeted the Greek's government's latest attempt to persuade its citizens of the merits of reducing the country's budget deficit. In Athens demonstrators stormed up to the very steps of the parliament building, where an austerity plan was about to be debated, calling on the parliamentary “thieves” to come out. Three people were killed when protesters set fire to a bank building on Wednesday May 5th. Hours later, with tear gas drifting through the adjacent square, parliamentary leaders held a brief, sombre exchange on the signficance of the deaths, vowing to protect the principle that protest must be peaceful. Many citizens agreed that it was a sad moment for the birthplace of democracy.

Yet Athenians were also saying, with wistful smiles, that it had been a good party while it lasted. The backdrop to the riots was that, in a mixed mood of resignation, black humour and bitterness, Greeks were bidding farewell to a decade in which everything good and bad about their country grew feverishly. There were sporting and cultural extravaganzas, starting with the 2004 Olympics. Archaeological sites were spruced up, new buildings erected. The middle class grew larger and more sophisticated. And many people at the lower end of the pile breathed a bit easier, if only because immigrants from poorer places came to harvest their olives and work in their restaurants.

At the same time, Greece's worst habits—the plundering of state coffers, the hiring of cronies, the abuse of public office, impunity for the powerful—were multiplied on an ever larger scale. A handful of Cassandras said it would end in tears but, while the party lasted, nobody listened. Now, with the announcement on May 2nd of loans from the IMF and the European Union worth a total of €110 billion ($144 billion), plus an austerity plan, the party is well and truly over.

Indeed, the riots will usher in what promises to be the rockiest period in the recent history of Greece. By slashing pay in the public sector, raising taxes and (hesitantly) starting to reform the labour market, the plan aims to reduce the budget deficit from 13.6% of GDP in 2009 to less than 3% by 2014. But it will deepen the recession that is already hitting Greece, with a drop in GDP in 2010 of at least 4%, and a further fall expected in 2011.

George Papandreou, Greece's Socialist prime minister, can count on a degree of understanding among half the electorate (not all of them voters for his own party) that the country faces a moment in which wrenching change is the only alternative to outright disaster. He can also take comfort because the centre-right opposition, New Democracy, is in quarrelsome disarray as the full extent of its mismanagement in 2004-09 becomes obvious. But will that be enough? Even those who accept that Greece's problems are largely self-made feel depressed about an austerity plan that seems to offer so little hope even for the medium term, and will punish many hard-working and modestly-paid Greeks.

And there is a hot-headed minority, at least, that does not believe the government when it says it had no choice. Mikis Theodorakis, Greece's most famous composer, expressed the visceral reaction of many when he said the crisis was probably a plot by dark forces in the United States and other capitalist centres to subdue proud, independent nations. Crazy as such talk may sound to euro-area governments that feel they have strained every muscle to save Greece from collapse, it will convince some people in a country where conspiracy theories (and indeed, conspiracies) have a long history.

Greek politics still includes a Communist Party that is rigorously Stalinist (it damns Khrushchev as a liberal backslider) and commanded 8% of the vote in the past two parliamentary elections. There is an emerging party of religious-nationalist far-rightists under the acronym LAOS (the Greek word for people), which has tried to gain respectability by accepting the need for tough measures, but still stands to gain from the general ferment. So do groups of malcontents even further removed from the political mainstream.

Not for the first time, the IMF and EU will be cast as lightning-rods for xenophobic anger. In the radical press and on the internet, the IMF is being called a junta, comparable to the colonels who took power in 1967 with the connivance (most Greeks believe) of the United States. That Greece invoked IMF help in late April, just after the anniversary of the April 21st 1967 coup, is seen by many in the Helleno-blogosphere as confirmation that the country faces a new period of foreign-backed despotism.

Such talk resonates in Greece. Throughout its 200-year history, the role of foreign powers has generated red-hot passion. Protagonists in Greece's internal quarrels have long invoked external assistance, while furiously denouncing any foreign help given to their rivals. During the right-left civil war of 1946-49, each side reserved particular loathing for its foe's foreign backers, American or Soviet. Dimitris Livanios, a historian, says that idea of a manipulating “foreign finger” is a recurring motif in Greek affairs.

The unprecedented prosperity enjoyed by most Greeks over the past decade helped to disguise some sentiments that were never far below the surface: ultra-leftism (including the violent sort which spills over into terrorism), ultranationalism and xenophobia. Such feelings may now be unleashed. The government claims some successes in rounding up a small ultra-leftist group of urban guerrillas called “Revolutionary Struggle”. But there are palpable fears that austerity and riots will spawn a new generation of self-styled Robin Hoods practising both political and criminal violence.

Tied to the mast

Meanwhile, cooler-headed Greeks are wracking their brains for ways to regain the economy's lost competitiveness and make better use of Greece's abundant human and natural assets. Much of the growth over the past decade reflected the windfall of cheap euro interest rates, which stoked an exuberant consumer market, complete with smart cars, foreign travel and personal trainers. All this activity will contract sharply now.

Harsh new taxes on business included in the government's austerity plan may kill the entrepreneurial spirit of those bold enough to try new things. New taxes on business and property will also limit the attractiveness of state assets that the government may want to sell to raise revenue, notes Stefanos Manos, a former finance minister.

There is also a well-founded suspicion that light-fingered bureaucrats and greedy politicians, the very people who caused the crisis, will not be held to account. President Carolos Papoulias, a soft-spoken leftist whose office is meant to be above politics, reacted to the austerity plan with a one-sentence call for people who robbed the state coffers to be punished. Many agreed. “The wage and spending cuts will be implemented with great efficiency, but with our chaotic justice system, the pursuit of tax-dodgers and bribe-takers will just run into the sand,” predicted an Athenian architect.

“It's all very well for Papandreou to compare himself to Odysseus making a long, heroic voyage,” read one e-mail doing the rounds between Athenian offices this week. “But Odysseus had a miserable journey and he lost all his companions. And he washed up on Ithaca without any clothes on.” At street level, sentiments are even less poetic. “We do not recognise this debt,” was the slogan of the militant trade unions, from teachers to dockers, that went on strike this week. The number of Greeks who believe in Bolshevik-style autarky may be small. But the idea of working hard for years to win an IMF/EU certificate of good behaviour holds little appeal.

Either in fear or in hope, many Greeks detect a breakdown of a political system, over a century old, in which two political groups (notionally of the centre-left and the centre-right, but both given to patronage and graft) progressively exhaust the national exchequer by outbidding each other. After the post-party riots, it is anybody's guess what might take its place.