Greece – A Lesson in Mismanagement and Lost Opportunity
July 5, 2015 will go down in European history as one of the most bizarre votes the continent has ever witnessed. The Greeks voted yes/no on a referendum that said they would accept the severe austerity measures laid out in the June 25 plan by their European Union creditors or refuse to accept them. They were not officially voting on anything else, but the June 25 plan was no longer on the table on Sunday, so the vote to accept that package was moot, and a no vote on the package should also have no meaning. This was, however, not what the people were being told from both sides, the European creditors who wanted a ‘yes’ vote and the very outspoken Tsipras government who wanted a large majority ‘no’ vote. What the referendum did not say, but in fact was what the people were voting on, was to stay in the European Union and the Eurozone or leave to carve out an independent future. BUT again, this was not what the document stated, and it was not what the government had been broadcasting to the people over the prior week on television, radio and via loudspeakers attached to the roofs of cars that cruise through small village to large city streets. The government had been quite vocal in saying that it wanted to stay in the Union and with the Euro, but that the austerity measures cannot be sustained as the people are already suffering, and that a new set of plans for continuing loans has to include some restructuring of the debt it has already encumbered. It has not said it would not repay the debt, although they did miss a June 30th repayment deadline, but rather that there has to be some binding legal acknowledgment and acceptance of a revised repayment plan, and ideally one that would forgive up to 30% of the debt. On the other side of the aisle, the creditors, especially Germany who has lent most of the money, but also other nations including the smaller poor ones like Latvia, who see the Greeks as having a better standard of living than they have, want the Greeks to accept standard banking repayment practices, which include raising taxes, cutting pensions and cutting government spending. The problem with this is that, as everyone agrees, Greece doesn’t produce anything to help make up the debt. The vast majority of the people work either for the government or have small businesses. These are the same people who have been adversely affected by the austerity measures over the last 6-7 years, and they simply cannot sustain any more hits. Unemployment, especially of the young people, is around 29%, and those that are employed are often in what would be considered minimum wages jobs.
What is striking to me is that the young people I spoke with in Iran had a sense of hope for their future in spite of their government, which they know they cannot change, whereas the young in democratic Greece have a sense of almost total despair. They feel humiliated by their neighbors in Central Europe, especially Germany, and are tired of being as they say “kicked around” and treated like the bastard child. In both Iran and Greece the governments are lying to the people (as ours does to us!), but in Greece there is a greater sense of betrayal, not just from the current and former governments, but from the partners within the Union.
Over the last two and a half weeks I traveled through North and Central Greece studying ancient archeological sites and talking to whoever could speak some English or German about what they thought of the economic crisis the Greeks are trying to live through right now. I tried to find ways to categorize the responses by gender, age, region, or business, but failed to do so. The people went into this Referendum truly split on what should or can happen. The one thing everyone agreed upon was that the way the austerity measures are currently conceived are not sustainable. Almost everyone wanted to stay in the European Union and the Euro, but quite a number added the caveat that they only want to as long as the conditions change and that they would be treated as a full member and not as the donkey that has to be beaten to move. Donkeys are notoriously stubborn, and so are the Greeks. The leftist government led by Alexis Tsipras that was elected earlier this year on a platform to restructure the debt and stop further austerity measures, is as stubborn as a donkey, but is also trying to be the “wily Odysseus” of Greek lore as well. The classical Greek admiration for cleverness is at best misplaced in today’s global economy where one does need to have some level of trust in one’s negotiating partner. Tsipras and his financial minister, Yianis Varoufaki, have proven repeatedly over the past few weeks that they are not trustworthy. They have been blatantly lying to their constituents and to their European partners. They have repeatedly told the people that they are not voting on leaving the Euro, but that a no vote would give their government more power during any upcoming negotiations. They have said they are not going back to the drachma. The EU partners, however, have said that if Greece rejected the austerity measures it would inevitably lead to Greece having to leave the Eurozone, for which there is currently no legal mechanism. The creditors, however, are fed up with awarding loan after loan to a country that isn’t paying anything back.
And this is where I see the miscommunication and loss of opportunity occurring. The parties are talking past each other and not with each other. Both are fairly intransigent and deceptive. An IMF report that agreed that the austerity measures without a restructuring of the debt relief would be senseless was hidden until leaked earlier this week. If that report had been on the table and openly discussed mid-June then this Referendum might never have taken place. On the other hand, Tsipras should never have called for a vote on a date when the deal to be voted on was already expired. Yes, it makes sense in a democratic country to ask the people to vote for what they want, but it is up to the government to make sure that the facts – as completely as possible and as unbiased a manner as possible – are clearly explained to the voting population. This did not happen. No one was sure what they were voting for or against and the potential consequences of this bizarre situation are tragic for the Greek people and further for the global economy. Greece has only a 2% portion of the European economy, but the fallout from a Grexit, even if it doesn’t affect the markets immediately, undermines the very principles on which the European Union was founded. This is the far greater loss. The word ‘Europe’ comes from Greece; Greece is the only place to print the E10 notes and the word Euro is written both in Roman and Greek scripts on the note. Europe without Greece, isn’t Europe in any cultural sense of the term. Bankers look at spreadsheets, but that is not how people live and feel. This, too, is where the miscommunication and lost opportunities have happened. Greece is a proud country, but one that has had a number of invaders. If one starts with the Romans, (clearly one can go back earlier to the Dorian and Mycenaean invasions, but historically-culturally the Romans make a good starting point), who took over politically and usurped the gods and culture making Greeks their educated slaves, the Byzantines, who converted temples to churches across the land, the Turks, who converted the temple/churches to mosques and kept the Greeks downtrodden until the Greeks rose up to protest in the series of Greco-Turkish wars at the end of the 19th and beginning of the 20th C, to the Nazi invasion in WWII, one can begin to get a feeling for how the Greeks feel about the new oppressors, this time financial rather than territorial ones. Respecting one’s partners’ needs and situation is a pre-condition for a sustainable partnership and this is not currently the case with these austerity measures.
Greece is in debt, no one questions that, and it also doesn’t have a foreseeable way out of it, but this is where spreadsheets stop and human compassion and ingenuity need to come into play. A union isn’t just a mechanism in which all parts function equally, a union made of people is an organism with the thumb functioning differently than the elbow, and the knee differently from the foot, and the heart using the energy from the lungs to keep the organism alive. Without any one of these elements the person isn’t completely whole. Greece’s economy will never be that of Germany or France. It will never manufacture goods the way those countries do. But Greece has other resources including creative people when given the support for being so; it also has sun, wind and lots of water which are going to be increasingly important to creating sustainable energy sources in the future as we all know we need to back away from fossil fuels.
The future of the Eurozone and the nature of the European Union may be at stake because of the July 5th Referendum on something that is not real. It is a bizarre situation that was created by deception and mismanagement from both the creditors and the Greek government side. One can only hope that Europe is smarter than the U.S. was with the first Iraq invasion. The U.S. citizenry was lied to then and much of the world is suffering the consequences of those lies today and will be for sometime in the future. I sincerely hope that the 60% no vote from the Referendum will give both the Greek government and the creditors the incentive to look at ways to step back from their intransigent positions to restructure the discussions and work towards a harmonious, vibrant and creative European Union.
