Well the Greek referendum is over with and the Greeks voted with a resounding no (61%) on accepting bailout terms. Plenty of European leaders may say that they believe in the Euro and want Greece to stay in the European Union. The opinion polls that showed the Greeks at a dead heat which each other appear to have been quite wrong. The Greek banks don’t exactly have a lot of cash anymore so the drachma will have to make a reappearance pretty soon.There are no laws written on how a member state would leave the E.U. so now might be a good time for the bureaucrats in Brussels to figure something out.
I don’t see how the Greeks can possibly maintain their current budgets and spending levels. I also don’t see how the people of Europe are willing to give up control of their currencies, much of their economies, and sovereignty to a body like the European Union. The intellectuals who believed and pushed for the Euro seemed to believe that a monetary union would bring political unification. Quite the opposite has happened though. Political differences and demands by different nations that don’t have a real Federal government or other institutions to bind them together are destroying the idea of European integration. Even space cadet Paul Krugman realizes that the Euro is a flawed idea.
The Greek government recently announced that banks would be shutdown for six business days, ATM withdrawals would be limited to €60 per day, and that the Athens Stock Exchange would remain closed on Monday. Time is almost up for Greece and the actions taken by the Greek government won’t solve any financial problems. PM Tsipras and the Greek government are still blaming everybody but themselves for this mess. Tsipras wants the deadline for the bailout program to be extended past June 30th to allow time for a referendum. The following are some statements made my Tsipras:
“It is now more than clear that this decision has no other aim than to blackmail the will of the Greek people and prevent the smooth democratic process of the referendum,” and “They will not succeed. These moves will have the exact opposite effect. They will make the Greek people more determined in their choice to reject the unacceptable … proposals and ultimatums of the creditors,“
This game between Greece and its creditors somehow drags on. I really don’t understand why, the Greeks are showing few signs of making reforms. The Greeks have already received bailout money, aren’t willing to make any reforms, and continue to make demands of the ECB, IMF, Germany, and anyone else who loaned money to the Greeks and expected the Greeks to not act like total deadbeats. Like I’ve written before, there’s no writing a parody about this. The actions of the Greek government are a parody and complete joke in of themselves. I wonder how many people believe that the Greeks will actually pay back all of the money that they were given?
I suppose I can’t blame Greece’s creditors to harshly for keeping up the charade of negotiations. Who would want to take the blame for Greece default and going back to the drachma? Everyone has there limits though. IMF spokesman Gerry Rice stated: “There has been no progress in narrowing these differences,” and “There are major differences between us in most key areas“. I would read this as the Greeks just want free money and the IMF has had enough of that. European Union President Donald Tusk quipped: “The Greek government has to be, I think, a little bit more realistic“. Volker Kauder, the caucus leader for Merkel’s party in Germany stated: “It’s not possible that the borrower decides under what conditions the lender kindly gives his money”.
Perhaps the Greeks are right and from now on the debtor should dictate the terms of the loan contract to the creditor? That sounds plenty progressive to me! Having to pay back the money one owes should be relegated to the last millennium. Only evil capitalists and enemies of the state would want their money back. What’s wrong with Greek proposals to borrow more money to pay back debt? Forward comrades, the revolution awaits!
I’ve written about the Greek debt situation a couple of times now, and it continues to bring on the laughs. Prime Minister Alexis Tsipras recently stated the following concerning negotiations with Greece’s creditors: that Greece was willing to accept a “viable and long-lasting” deal and would refuse “humiliating terms“. PM Tsipras also stated the following: “Throughout, we have proven we are ready to make concessions in order to get a mutually acceptable deal. We demand of our partners the same respect and corresponding concessions. We have done our duty, it is now time for Europe to do the same,”. PM Tsipras is also claiming that the IMF is at fault for extreme terms such as: budget surpluses that are too high, reductions in welfare/handout programs, and not writing off debt.
I personally believe that no European country should have adopted the Euro without actually becoming a federal state or just maintained their sovereignty. Especially with a country that’s contributing as little as Greece is, but there aren’t any easy choices concerning a Grexit are there? But if the IMF doesn’t just give more money to Greece, how will the Greeks pay for healthcare? It’s not as if the socialist government is able to provide much and clearly the Greek economy is suffering from bad policies. I suppose that Syriza will just blame “austerity” though…
The leftist Syriza party has just won the Greek elections with between 35.5 and 39.5% of the vote. The man who will likely become Greece’s new Prime Minister quipped of the victory “The Greek people have given a clear, indisputable mandate for Greece to leave behind austerity.” Because if anything is worth trying again after years of failure, that would be more socialism. I suppose that when the Panhellenic Socialist Party (PASOK) was in control that they just didn’t do socialism correctly. One way or another, these guys will get it right. It’s funny how the left always says “austerity” whenever someone else says that perhaps the budget should be balanced once in a while. As we all know, living within your means is for losers. Just raise taxes and you’ll get all the money you need right? Just keep promising “free” stuff and the voters will put you in power apparently.
Moving onto the Eurozone as a whole, who wants to take bets on who will leave the E.U. and when? The Germans are certainly preparing themselves for such an event. Anyway, I still think it doesn’t make sense for sovereign countries to share a single currency. In light of events such as the Greek election, why should countries with different desires, ideas, and goals all be forced into some sort of supranational state? The whole Euro project was never a great idea to begin with.
The United Kingdom has been considering the possibility of leaving the E.U. and will even be holding a referendum on this very idea soon. I’ve never thought it made sense to push over two dozen nations together in such a manner. It’s bound by a common currency, except for the U.K., yet has no common economic policy. Germany wants other nations to be more austere, a lackluster labor market, the threat of deflation, and a lack of any common economic policy are very dangerous for the E.U.. Continental Europe is bound by a common currency yet not bound to actually help other member countries out or have a common goal. There is no common defense policy amongst the various nations of the E.U.. Why shouldn’t the United Kingdom be able to control who enters their borders from other countries? Only time will tell if the E.U. can stay together, perhaps economic forces alone will pull it apart?