‘Just over five years ago the economies of Ireland and Greece were in the same dire situation. Both countries had racked up massive debt and were unable to borrow on the international markets. Eventually both countries were forced to seek an emergency bailout to rescue their faltering economies. Fast forward to today and the fates of Greece and Ireland cannot be further apart. It is absolutely clear that the situation in Greece has continued to deteriorate. The Greek economy continues to shrink, seeing a 0.2% contraction in the first quarter of this year. Greece’s unemployment rate remains stubbornly high at over 25% and it has one of the highest public debt levels in Europe at over 177% of its GDP. In contrast, the Irish economy has grown every year for the last three years and this year is predicted to be the fastest growing economy in the EU, even outpacing the UK and Germany. Ireland has year on year reduced its unemployment rate and now boasts a rate lower than the Eurozone average. The lessons for Greece cannot be clearer. Ireland has taken the tough decisions and so now must Greece. The Irish people are now reaping the rewards of sensible and wise decision making.
Now is the time for sensible and wise decision making in Greece. While standing at the abyss Greece cannot bury its head in the sand. Nor can it expect special treatment from its European neighbours. Why should Greece receive more favourable treatment than Ireland or any other European country for that matter? It would be an insult to the Irish people. It would show that irresponsibility is rewarded over responsibility. Greece’s interest payments are already lower than Ireland’s and Greece enjoys the most favourable lending conditions of all the Eurozone countries that were forced to accept an economic bailout. The Irish cannot be expected to have taken the sensible decisions and endured, for Greece to do the opposite and be rewarded with more favourable terms. Of course, European solidarity means that all Europeans stand together to assist one another in times of difficulty. The Greek people should know that Europe stands beside them and will continue to help and assist them. But this help and assistance alone is not enough. Now is the time for Greece to make wise decisions. Now is the time for brave decision making. Now more than ever Greece should learn from Ireland.’
‘Greek Prime Minister Alexis Tsipras called for a referendum to be held this Sunday, after the failure to come into an agreement with the troika of institutions (EC, ECB, IMF) for Greece’s next bailout package. Five years into a deep recession that has shrank the country’s economy by 25% and an explosive unemployment, this referendum was long overdue. The question set by the Government is whether the people agree with the new bailout terms or not. And this comes as no surprise, since Syriza was elected in order to renegotiate the debt not the country’s membership in the Eurozone. Tsipras’ decision to call a referendum one week after the deadline for the next IMF payment, set for June 30, took the Europeans by surprise and led to a chain of fateful events. Greece became the first developed country to default on an IMF payment, banks shut down for a week and a capital control ensued with fears for a possible Grexit coming resurfacing.
A “Yes” vote in the referendum will have the Greeks continue their path down the austerity tunnel that they have been on for the last five years. It will be a moral and tactical victory for the domestic and foreign austerity advocates. It will also mean more taxes and spending cuts for the crippling economy, and more pressure to the middle and lower classes. The pressure from Brussels and Berlin is high for a Yes vote, calling it a yes or no referendum for Greece’s future in Euro and EU which is fearmongering. A “No” vote with all the uncertainties that it entails, will be the legitimization of the call of the Greek people that they have had enough. The austerity programme tailored for Greece is not functioning. Now, EU leaders cannot pretend anymore that they didn’t know. The last leaked IMF report published this week shows that the country will need a generous debt relief, a 20 years grace period and a third bailout in order to make the debt sustainable.
Whatever the outcome, Monday will find the Greeks once more as part of the European family and Euro. The stakes are too high and the Eurozone is not immune to a possible domino from market speculator pressures. Also, there are no mechanisms in place to force Greece out of Eurozone. With all the cards open and the chips down, the referendum is the biggest bet for the Greek government and Troika. A Yes in the Greek referendum, will find Tsipras and Syriza out of the office, whereas a No will strengthen their bargaining hand hoping to strike a deal with better terms that will not bleed out once more the Greek society.’
‘I do agree with Juncker’s statement that Europe is Greece and Greece is Europe. While as a temporary solution one could function without the other, on the long-run I believe that it would bring confusion. I do hope Greece will remain a member of the European Union, as a Grexit will represent more instability. The citizens of Greece will vote on the referendum based on their own views, allegiances and experiences during the crisis. But I am afraid that this crisis is more about politicians and less about the people. If the wealth and wellbeing of the Greek citizens had been at the centre of the efforts of the politicians, a solution would have been found by now.
However, the solution of Greece remaining within the Eurozone, if validated by the referendum, should be better managed. Talks have taken place on multiple occasions and no solution has been found so far. While erasing Greece’s debt is not a sustainable solution, it could be minimised and more flexible terms introduced together with longer periods of repayment. In this scenario, stricter financial control will need to be implemented in securing repayment. Either way, Greece will not regain the autonomy and liberty that it once have.
Nonetheless, we should keep in mind that it is not only a Greek crisis, it is a European crisis.’
‘It is really difficult to explain how the euro zone got to this point. According to European Commission officials, the deal was a matter of details and the bigger problems had already been solved. So what happened? It seems to me that the Greek government and the lenders are probably both speaking in English but at the same time they are speaking different languages.
Greece can't handle austerity anymore but northern countries don't trust the country and they are hopeful that the current administration will be gone soon. In the process, the European dream is dying. People in the entire Union are waiting for an answer to the Greek debt crisis but I'm afraid that their trust in the EU political project is definitely gone. Long term debt sharing among Eurozone members is the only viable solution, alongside a European treasury and a proper government.’
‘No matter who wins the Greek Referendum, the European Union will not be the same after this historic moment. The crisis changed people's view of the EU, especially in the southern countries that were most affected by the crisis. Portuguese people that were generally pro-Europeans - and Portugal has always been in the forefront of the important steps taken in order to turn the EU into a better institution - have started complaining about EU, especially the Euro.
Portugal had a severe crisis, the Troika wanted many reforms, our government, as the opposition political parties say, has done more than Troika has asked. But Portugal still needs important reforms, and what will happen in the Greek Referendum will affect the Portuguese recovery. If "No" wins and we have a Grexit, the euro will lose its monetary power, and Portugal is the next in line.
I cannot predict the future and no economist knows what will happen after the Greek referendum - the decision is in the hands of the Greek people. No one really knows what will happen. Monday, we might have a new and stronger EU, or the beginning of the end of the euro, or perhaps none of these options. The EU is an unique organization; as the United Nations, which was reborn from the ashes of the League of Nations at the end of the Second World War, the European Union today needs to reinvent itself.
The Greek referendum is an important step for the change that European Union needs. We are all Europeans, we share the same history, but we have differences and when our differences show up we do not respect the others' option. The equilibrium that European Union lost with the crisis, needs to be regained. The EU cannot impose its will on countries such as Greece, as they have already suffered too much under tough austerity measures. The EU is only creating more divisions within its borders. Both, Greece and the EU, need reformsò this will take time but the bomb clock is ticking and it will not wait. Either the EU shows the world how we are united or we let Greece and the whole European project collapse. The Greek referendum is not only about the the future of Greece, it is also about the future of the EU.’