Greece / Politics

Importance of the Greek Economic Crisis

After having lived in Athens for the last three months I cannot help but feel the need to draw attention to the Greek economic crisis that has been rolling in and out of the news during my time here. Amidst the many media platforms shouting about the crisis, this is what I have gathered together — hopefully to provide a somewhat holistic, somewhat factual source. (Although, who am I to say that you should trust everything you read on the internet?)

After the recession hit hard in 2008, Europe was reaching a climax in the debt crisis, and Greece was the center of attention. By 2010, Greece had been weakened by the domino affect of financial crisis, to a halt in borrowing money, and was essentially on the edge of total bankruptcy — that is before Troika stepped in (the International Monetary Fund, the European Central Bank, and the European Commission). The first bailout was issued.

Greece was seemingly in a better place, or was at least a bit further from the edge of the cliff it was nearing. However, the stress reduced came with a new weight that is still sitting on the chest of the millennia-year-old nation: austerity. This implication assured a more frugal financial sector and an overall reduction of government expenditures, but also was the only consequence of Greece having a chance to stabilize and stay apart of the EU. At the end of the day, 240 billion euros are owed to Troika.

In the years since, however, the financial dilemmas have not evaded; in fact the economy has shrunk and unemployment has risen. Public health and labour forces have deteriorated, and homelessness and suicide have increased. And many are pointing fingers at austerity. The new political party in Greece, Syriza, has recognized the issue as a “humanitarian problem” and promises the people that they will get it under control. Alas, Greece has not repaid its debt, and indeed, is running out of money fast.

Needless to say, the EU is not ecstatic about the whole situation. Now the question is whether Greece should even stay apart of the Union or if it time to ‘move out’ and back to the drachma. Finance Minister of Greece Yanis Varoufakis has recently claimed that Greece has provided “comprehensive” proposals to the situation, but considering the committee he announced this to made no further standpoint leads the reader to believe that the audience wasn’t too convinced by Varoufakis’ reassurance.

Now the question at hand is what will happen with Greece? Taxes could rise even higher, creating a bigger humanitarian crisis in the nation that is already hurting. Or Greece could undergo the “grexit,” leaving the EU and seeing what happens from that point forward. Regardless, Greece has the short end of the stick and it seems as though no one knows what exactly should happen.

Around the cities of Athens, Thessaloniki, Sparta there are symbols of anarchy and political commentary left as pleads on the walls of buildings and structures. In Athens, the further you venture from Plaka, the more visible it is. The closer you get to Syntagma, the tension is noticeable in the aching cloud over the square. Red paint marks the staircase to the Parliament building, but I have yet to recognize if it is meant to symbolize blood and suffering or a fear of Communism. Shops and restaurants are boarded up once you venture past the main roads and signs of increasing poor sanitation regulations line the streets.

The crisis is not invisible to the people of Greece, nor the rest of the world. It has led to the appreciate of the US dollar, which hinders trade relations between the US and the EU in terms of the the dollar going up, and exports from the States becoming more expensive; and perhaps too expensive for some of the nations within the European Union. A “grexit” could also cause a domino affect of other smaller European nations seceding as well. However it is important to bring attention to the ECB (European Central Bank) policy of Quantitative Easing. Essentially, it is a monetary funding technique by central banks to stimulate the economy. This is important to understand because it sheds light on the aspect that EU businesses are in some way benefitting from the depreciation of the Euro because they can earn more by exporting goods from Europe. This goes hand in hand with the strong dollar; the dilemma allows the US economy to weaken and for the EU economy to grow stronger.

The Greek economic crisis is not limited to the nation itself, to the European Union, or to US-EU relations. The crisis has and will continue to affect the entire world — which, thanks to Globalization, has been made possible. It is essential to recognize the impacts of the crisis in Greece and in your own nations. Just as it is important to take everything you hear or see with a grain of salt, because every story has many sides.

I originally posted this on The Vandalist.


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