If you're Greek, today you have a difficult decision to make. Will you vote yes, to accept another bailout package (and the attendant austerity measures)? Or will you vote no, and accept jeopardizing your EU membership and throwing your economy into chaos in return for your nation's sovereignty and the end of austerity?
And if you're not Greek, I'm curious to hear your thoughts on the situation. How would you vote, if you could? Do you think Greece should continue to receive bailout funds? Are you worried about the effects of a Grexit on the global economy? Let's chat about all that here.
I'm not from Greece. I don't know every single fact about the crisis, but I mean I would probably vote "No." Taking more money just seems like digging a deeper grave, one in which they will be forced to climb out of once again down the line. The problem with this is everyone is trying to rush this to reach some short term goal, but that can't happen anymore for Greece. I think it was time they accepted that this is going to a really messy situation for a while, but that doesn't mean it will be that way forever. I read some economists were talking about how a return to the drachma could in fact lead to some benefits for the Greek economy in the long-term.
I really have not been following this story much at all - anything in the news involving economics just makes me want to take a nap - so could someone more well-versed in it than I explain what effects Greece pulling out could have, both domestically and globally? Thanks. :)
Greece defaulted[1] on a loan from the IMF tuesday. That same day, they spent the last of the most recent tranche of bailout funds from the EU; they've been out of cash all week. It's not just the government that's broke. Banks are completely illiquid. All week, we've witnessed scenes of empty ATM's and pensioners queuing outside shuttered banks. The situation is desperate. What a "no" vote would do, effectively, is end the negotiations for another bailout, which at the moment are "on hold." The Greek government would be forced to deal with the cash flow situation on their own; by printing their own currency rather than importing Euros. Banks and ATMs would be filled with drachmas, a currency created out of thin air, and thus unlikely to be trusted by the majority of Greeks; foreign investors will certainly have nothing to do with it. This causes numerous problems. Hyperinflation is a real concern. Perhaps the biggest worry of Greek planners though is imports. Greece has a big trade imbalance and relies on imports for crucial goods such as food, fuel, and medicine. If foreign exporters aren't willing to accept drachmas, and Greece is unable to obtain Euros through the credit markets, Greeks will be in a very tough spot. The good news for Greece is that the crisis which would ensue from pulling out of the Euro should eventually come to an end, as opposed to the austerity regime which appears designed to extract wealth from Greeks for the foreseeable future. Default and withdrawal from the Euro would cause severe pain over the next year or two, but once the drachma becomes accepted, a lot of the immediate problems should ease. Moreover, a central government empowered to spend, rather than beholded to paying European creditors, would have the capital to kickstart the economy through various Keynesian programs (think FDR's New Deal). Greece has a massive unemployed population, and a number of economic needs which could be fulfilled by domestic industry. It's only the current debt extraction arrangement which keeps people unemployed and wealth flowing out of a country. A Greece unbeholden to foreign creditors would be able to put its people to work. As far as the international effects of a Greek pullout, most pundits agree that the economic effects should be minimal. Most of Greece's debt is held by EU nations; very little of it is tied up in banks (and most of those banks are Greek banks who would be crashing on Greek depositors). Though UK and US banks have stepped up their investment in the Greek banking system since 2012 (the last time "grexit" was imminent, when "contagion" was a feared buzzword) the threat of an immediate European financial crisis appears to be very low. The main concern is the political ramifications. Greece's decision to jettison the Euro will serve as a precedent to other European countries which experience hardship. The integrity of the European Union is at stake. [1] Technically they're just "in arrears" since the IMF doesn't consider a state to have officially defaulted until a month after missing a payment, but that's besides the point.
Thanks for this! I finally get what's going on. And yeah, I think I agree with what everyone else in this thread is saying right now: it really just seems best for them to make a "grexit" (which is a very fun word to say).
If you like maps and infographics, I found this useful (it's a pity about the clickbait format, but if you can get past that...)
Remember Germany, mid-1920s... began aggressively printing cash, instituted various economic controls, paid their war debts with inflated twaddle, turned around and poured much of the recirculated money into factories, train tracks and housing, waited ten years, conquered most of Europe. Anyway, Greece has, honestly, two decent options. No matter how they vote they're not going to pay much of this money back for a long, long time. Even under modified "austerity" the terms won't be terrible, because the EU knows they're going to be walking through this process again with someone in the next ten years. At least I hope they know that. I'd vote yes. As of last week I'm free and clean of the stock market, hoping for a crash. I've also always wanted to see Greece. Come what may, flagamuffin is prepared. I even found a beat up copy of The European Dream in a used bookstore the other day with which to masturbate.Are you worried about the effects of a Grexit on the global economy?
Golden Dawn, a literal neo-nazi party, consistently polls third (around 10-12%) and has a pretty strong street presence, though all of its MPs are in jail. ANEL is a "patriotic right" party which is in government as SYRIZA's junior coalition partner. And then there are also persistent rumors of generals/retired generals forming a new right-wing party, though that never seems to materialize. So the far-right certainly could come to power, though if it tried to invade any of its neighbors, it'd almost certainly get slapped down.
Hmm. Yes. I remember reading about Golden Dawn now. Scary stuff. I think if they did come to power, weather or not they turned Greece into a belligerent nation on the international scene would be irrelevant. Having such people in power would create quite a toxic atmosphere and that alone is scary. I am of the impression that when things become difficult, a lot of groups with extremist viewpoints tend to double down and for some reason, gain more support from the general populace. I'd hate to see that happen anywhere and Greece is no exception.So the far-right certainly could come to power, though if it tried to invade any of its neighbors, it'd almost certainly get slapped down.
Me too. A contact of mine in Greece, for what it's worth, is convinced that Golden Dawn holding any power is impossible, that the military dislikes them and that there would be a coup if they took power. He's a Major in the Greek army, though I believe with the way the Greek army is structure, that just means he's been in the reserve officer corp for a while and has fucked up; I don't know how much influence he has. But I'm hopeful.
There's a part of me that doesn't like the idea of coups. They often seem to create more problems than they solve. Thailand for example seems to have one every decade or so. The coup in Egypt created a new boss that was just like the old. I'm sure if I looked up even more examples of coups in the 20th and 21st century, I'd find a pretty poor track record.