Will Greece vote to remain in the eurozone or will there be a big fat Greek default?
In 2002 My Big Fat Greek Wedding was released, quickly becoming one of the year's most popular films. Also in 2002, the first euro note was printed, quickly becoming popular with tourists and traders.
According to IMBD, the film is about "A young Greek woman (who) falls in love with a non-Greek and struggles to get her family to accept him while she comes to terms with her heritage and cultural identity." Greece itself had the same problems: its new eurozone family failed to understand its heritage and cultural identity.
When the eurozone was formed in 1999, there was no question that Greece would not be included. Greece was the birthplace of democracy, and the leaders of modern Europe value democracy very highly. They owe their jobs to democracy, after all.
So they ignored the truth: Greece had cooked its books and was not in a financial position to share a currency with its neighbors. Successive Greek governments continued to cook their books, and Greek citizens continued to participate in their national sport, evading taxes.
Meanwhile, the government very democratically doled out jobs to its citizens and allowed them to retire early with full pensions. No one cared, because the books were cooking away on the stove, disguising Greece's precarious position while a booming EU economy (and the infrastructure spending of the 2004 Greece Olympics) made it easy for others to ignore the truth. European financial institutions quite happily extended credit to Greece (similar to the way American mortgage underwriters extended credit to migrant farm workers in American sand states).
But then came the world financial crisis of 2008 (begun when banks in the US did a little cooking of their own, mixing bad loans with good ones in a smelly stew that eventually poisoned the entire world's financial system). And Greece got a new government, one that was determined to expose the past corruption and in the process, exposed the vile worm of democracy: elected leaders sometimes fail us.
Greece is a tiny country by US and EU standards: its population of 10 million has a yearly gross national product of around $300 billion—a figure that has been falling in recent years as Greece struggles with recession. But it owes around 150% of that, and its credit rating is in the toilet—which makes the debt impossible to pay off with new lending, which is how most nations pay off their debt.
"That's it? That's the whole plan?" via The Guardian
The details of the recent deal called for Greece's creditors to take a 50% haircut on the loans, and for Greece to be given another 109 billion euro loan. But Greece would have to agree to another round of painful austerity (a favorite word in Europe these days) which hasn't gone over too well so far. Daily strikes and demonstrations have ground Greece to a halt. And if workers either aren't working or can't work—unemployment is around 12%—GDP will continue to fall, making it even harder for Greece to meet its obligations.
Now Greece's elected government wants to—surprise—put this deal to a democratic vote. But did Europe really not see this one coming? Or are they so ignorant of Greece's heritage and cultural identity that they figured Greek citizens would go along with whatever plans they made for Greece to avoid default and keep the eurozone intact?
If workers are to return to work and if taxes are to be paid and debts paid off, the people must feel they have exercised their democratic right to approve the plan.
The alternative to the plan of course is default—a big fat Greek default.
For that's really at the heart of Greece's dilemma, a dilemma they will vote on in a few weeks. (A dilemma is a Greek word that refers to "a problem offering at least two possibilities, neither of which is practically acceptable".) If Greece defaults the eurozone will fail, as other countries are dragged down, including precariously situated Italy and France, whose banks own a lot of Greek debt. (Fifty percent, after all, is better than zero percent.)
The EU never thought to take away a member's sovereign right to tax its citizens and reward them in whatever way they saw fit—health care, education, roads, or pensions for government workers. No one would have joined this deal, and the eurozone would never have printed its first note in 2002.
Yet the failure to control members like Greece—and to essentially ignore its economic state of affairs—has put the entire eurozone right at the precipice of default.
Whose fault is that?
No one has an easy answer to that: Europe shouldn't have extended loans to Greece that couldn't be payed off, and Greece certainly shouldn't have continued its profligate ways while allowing its citizens to evade taxes.
In My Big Fat Greek Wedding, Toula, the heroine, worries about her fiancé: "Any second now he's gonna look at me and go, "Ha. Yeah, right, you're so not worth this."
It's possible Greece will decide those euro notes aren't worth the pain inflicted by their creditors, or that Europe will decide that Greece isn't worth bailing out on any terms but theirs. More likely, their reaction will be the same as Toula's father: "Yes, you are."
