No let-up for Eurozone after knife-edge Greek vote

Greek voters yesterday were choosing between bad – and worse © Getty Images

Greece has fended off catastrophe for a few more days at least, after pro-EU conservatives narrowly won crucial national elections. EU leaders are relieved, but the crisis remains far from over.

Greeks are sick of being reminded that they invented democracy. For voters at polling stations yesterday, for the country’s latest national elections, the democratic options on offer seemed like a bitter mockery of the glorious past. As one commentator put it, the Greeks had a choice – between fear and outright despair.

Why so grim? Because the country is facing an unprecedented crisis. Deep in debt, with a collapsing economy, Greece could easily become the first country ever to get kicked out of the Euro single currency zone.

That is a disaster which all Greeks want to avoid. But to stay in the Euro, Greece needs money from rich EU countries like Germany. The Germans will help – but they have a price: they want Greece to starve its economy, cutting pensions, social care and government jobs in order to get its huge debt mountain under control.

This is where fear and despair come in. The party of fear is New Democracy, or ND for short. ND voters are terrified of being kicked out of the Euro, and will do anything to stay in – agreeing to more or less anything the Germans ask.

The party of despair is called Syriza. Voters for Syriza think Germany’s terms will destroy Greece anyway, whether or not the they stay in the Euro. They think they have nothing left to lose.

The only chance, they think, is to make a stand. Syriza’s plan is to refuse the German terms, and dare Germany to kick them out of the Eurozone.

If that happens, Greece would be in terrible trouble, but it would be very damaging for Germany too. Some analysts think Germany would rather give more financial aid than see a Greek exit really happen.

Greece, in this situation, has been compared to a mad man who is standing in Germany’s living room threatening to shoot himself in the head unless Germany pays a ransom. It would be suicide for Greece, but it would make an awful mess on Germany’s carpet.

But, as the votes were counted yesterday evening, it became clear that the conservative ND party had (only just) beaten the Syriza radicals. All around the other capitals of Europe, politicians and pundits breathed a deep collective sigh of relief.

Abandoning hope

Are they right to be relieved? The ND victory means Greece will keep doing as it is told – for now. And perhaps Germany will be alarmed enough by the narrow escape to start sending extra help to its impoverished southern ally. If EU countries all stand together, the worst can still be avoided.

But pessimists say that EU countries will not stand together – that in fact they are drifting ever further apart. In that case, all the ND victory can do is delay the inevitable disaster. Perhaps despair was more sensible after all.

You Decide

  1. If you were a young Greek, who would you vote for: ND, Syriza or no one at all?
  2. Many German voters think the Greek mess is Greece’s own fault. Even if it is, should that matter?

Activities

  1. Design an election poster for either Syriza or ND, based on their different approaches to the Eurozone crisis.
  2. In groups, devise and perform a three-minute drama about a meeting between Greek and German officials arguing over financial aid and the Eurozone.

Some People Say...

“It is weak and wrong to give in to despair.”

What do you think?

Q & A

I suppose it would be foolish to hope that this crisis would stay in Greece?
I’m afraid so. What happens in Greece will be felt all over the world.
Go on...
It’s like a chain of dominos. If the Greek economy collapses, other weak economies in Europe will wobble badly. Spain, for example, is already facing a major debt crisis of its own, as banks have become frightened of lending it money.
And if Spain goes?
It would tear a huge chunk of the European economy down with it. That would be terrible for the UK (with an economy totally tied to Europe), the US (which counts the EU as a major trading partner) and even China, which has built its economy by exporting goods to the West.

Word Watch

Invented democracy
Several ancient civilisations can claim to have experimented with voting and popular rule, but it was in ancient Athens during the Sixth Century BC that democracy really took root. Even the word comes from Ancient Greek. The demos in Athens simply meant ‘the people’.
A disaster
The consequences of leaving the Euro are hard to predict, but would probably be very severe. A new Greek currency would quickly lose value. Foreign goods and services (including vital things like energy and medicine) would become very expensive. Savings would be wiped out. In the long run, however, a devalued currency might help Greeks sell more goods abroad, slowly healing the economy.
Extra help
In the short term, Greece simply needs more money to pay its bills and keep its economy going. In the long term, solving the Eurozone crisis would probably mean moving towards a closer political union, in which rich countries and poor countries shared their debt burdens. But citizens of rich countries are reluctant to prop up poor countries which they see as lazy or irresponsible – hence the current problem.

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