Given the turmoil that Greece has been in the last little while and in light of the July 5th referendum, I felt it necessary to explain a couple of things as it turns out that many international onlookers may not understand the situation fully. What’s clear is that a large part of the population in the country which invented democracy is ready to take it back, by force, if necessary.
Tsipras made a brilliant strategic move of calling for a referendum to see if Greeks want to give in to the ECB and EU demands. Or to choose NO and leave the monetary union. In this way he has, as Pontius Pilate did, washed his hands of the responsibilty, and allayed any suspicions that he (unlike his predecessors) may be under the influence of the international bankers. He is no longer in the picture. He has removed himself from the equation. He is no longer a target for bribes. He has truly given the power to the people and for that he was brave.
Still, many misconceptions float around the international community about the situation. Some see Greece as freeloading homeless people begging for handouts. Others see them as unfortunate victims of international banks and the Statists. I think it best to format this as a FAQ info session. So here it goes.
How did we get here?
Answers will vary depending who you ask but generally a lot of false promises were made and some numbers massaged so that Greece could make it into the Eurozone back in 2001. My former employer ran the deal and was paid handsomely for it. I’m sure the Greek officials at the time took home their share of the finish-line prize as well. There were champagne parties, and libations. Everyone celebrated the triumph of capitalism and European Statism. Those parties and politicians have long since gone and perhaps most of the money along with it.
The potential productivity of the Greek economy was exaggerated. Now they are a net liability to the rest of Europe (mostly Germany). And the Greek people are worse off as they are now working harder and for less just to pay back the loans that were given the country but “disappeared” through the cracks of bureaucracy and corruption.
Who does Greece owe?
Greece ended up borrowing a lot of money. The creditors are other euro countries (notably Germany, Italy, Spain, UK, Portugal) and international banks, and the IMF. A total of about 352 billion Euros to various parties. Their debt to GDP ratio is 180%.
What do the Greek people want?
To stop the endless cycle of paying off present debts with more future loans and more austerity measures. The average Greek has a yearly salary of only 7000 euros. A pool boy it Canada makes more than that. The tax burden on the poor has risen 337% and their incomes cut by over 87%. Incomes on the rich has only been cut by 9%. Of course it’s tough to tax the rich too much as they have the means to just leave the country. But this is the result of the austerity measures. The rich run away with the loan cash and the poor are stuck with the bill because they can’t afford to run away.
Young people want out of the EU. They have nothing to lose and have lost most of their income and hope due to austerity.
Old people want to stay in. They depend on pensions and cannot afford to leave. They are retirees mostly and probably feel that kicking the can down the road won’t matter too much to them because they won’t live enough to see the Keynesian “long run eventuality” anyhow.
What are the demographics?
Most of Greece is reduced to service industry and tourism, some exports in cheese and olive oil. Most of these industries would benefit from a depreciation of currency that would come with the introduction of drachma. They have a lot of state assets like ports and islands that almost got sold to China. But violent public backlash against selling off its ‘mother Gaia’ to foreigners has made capitalizing on these assets difficult.
How can you show Global support?
Normally I end my posts with a request for donations. This time I’m asking you to donate to Greece instead. Show the geek people that the global community supports their stance against the banks and for the rights of the people to decide their own future. Checkout the Indiegogo campaign started below:
It is an attempt to show solidarity with the Greek people. It is a chance to show Greeks that the world is behind them if they want to say “enough is enough” and take back their country for themselves. You don’t pay if the target is not reached. If it is the money will be donated to the Greek government to do with it what it will, no strings attached.
Do I think that the target will be reached? Probably not, but it’s a social experiment on how many people really care about helping their fellow man, versus those who just want to talk a lot about it. It also says something about how many people really want to do something about injustice, vs those who are happy to just their elected officials make all the big decisions for them. We live in the internet age now, there really isn’t a need to delegate a lot of these traditional things to ‘smarter’ people in governments anymore. Besides, most of the time, they aren’t much smarter than that pool boy in Canada anyhow.
Do I think that 1.6billion will make a difference in repaying their debts? NO. Of course not! But I think it would convince some Greeks to feel a bit better about voting NO to Euro and roughing it out on their own, they have a lot of pensions to pay, civil servants like garbage men and judges to payroll, and they have to back the new drachma with something, why not use that donation to buy 1.6 billion euro worth of gold ? (Or Bitcoin?)
Vote with your money. Vote to support Greece in their fight for independence from the international bankers. The people of Germany don’t want them here, Greek people don’t want to be here, you have to ask yourself, who really needs Greece in Euro anyway?
Your support may just help more Greeks believe in themselves enough to vote a resounding NO this July 6th. And that will be a vote that will be heard around the world. One that Leonidas and the Spartans at Thermopylae would be proud of.
[edit: corrected the total debt numbers, 180 was the debt to GDP ratio, not the total outstanding debt which is a lot more]