After Greece announced a public referendum on austerity (effectively rejecting it), Athens was a mix of apprehension and resignation. Drizzle fell on empty Syntagma Square, the scene of recent protests; crowds preferred ATM lines in anticipation of bank runs (a self-fulfilling prophecy). However, cafes were filled with the usual chatter and laughter, adding levity to this brooding crisis. Each threat to Greece seems to pass uneventfully, and somehow the wheels keep turning.
I visited Greece 16 years ago as an archaeology student. The only ruins were ancient. This week I saw modern ruins, evidence of a decaying economy. Vacancies plague once-thriving neighborhoods and streets look shabby. Greece has lost its swagger, and now is the era of austero-uncertainty; Alaric (Merkel?) at the gates. The predictable result is populist rage, with government heroically repelling the shock-troops of neoliberalism. It makes a cute story, but reality is more complicated.
The Greek crisis is a magnification of risks accompanying the Eurozone experiment. Monetary unions are difficult without fiscal unions, which are practically impossible without political unions. Each Eurozone member has its own fiscal policies, and one currency must accommodate them all. Reverting to the drachma may be Greece’s only solution, with prices reflecting the country’s true economic conditions. A weak currency means cheap exports, expensive imports (good for local producers), and a likely boost in tourism. However, the accompanying inflation would visit hardship on many citizens.
Checking out of my hotel, I was approached by an elegant older lady. She greeted me then launched into an impassioned rant about immigrants ruining her neighborhood (am I that approachable?). She was correct about the neighborhood’s economic decline. Once an upscale shopping district, the area is now pock-marked with graffiti, boarded shops, and the death-knell of blight — desertion. She quipped that immigrants were drawn to cheap basement apartments; “Greeks don’t live in basements.” Besides inadvertently making a fascinating connection between the built environment (basements) and urban socio-demographic transformation, her comment reflected the usual alarmist tripe. Structural and cultural determinants of the Greek decline — and Athens’ failing neighborhoods — have nothing to do with immigration. As in America, it must be a convenient strategy to blame new arrivals.
The current situation portends an imminent Grexit (a neologism only slightly less awkward than “Gre-fault”). Prime Minister Tsipras’ vote proposal could be seen as weak leadership. More likely, though, it is a political tactic to save face domestically and (if possible) with the EU. A “no” vote, which he publicly advocates, becomes a “political mandate.” Tsipras emerges a populist hero at home, and to Europe a man reluctantly bound by political will (tongue firmly in cheek). The negative consequences of a Grexit may be overstated, but a vote either way fails to solve the true problem: a never-ending cycle of unfunded political promises.
Is there a third way out of “Gre-fault” or “Grexit”? Discuss ideas for solutions on DebateHub.
Kris Hartley is a visiting lecturer at Vietnam National University (HCMC), a PhD Candidate at the National University of Singapore, Lee Kuan Yew School of Public Policy, and a researcher-at-large at Foossa.