A couple days ago, as I was sitting in my political science class waiting for lecture to begin, the professor suddenly called on me and asked what I thought will happen to Greece in the near future. She asked how much family I had there ,and when I responded with, “everyone but my parents and sister,” she seemed alarmed and saddened. Then, one of my fellow classmates yelled out, “Wait, what’s going on in Greece?”
This reminded me how many people simply try to stay out of politics and have no idea what’s going on in the world around them. However, it’s important for collegiettes to be well informed about current events!
What is occurring in Europe now may seem distant to some, but in today’s globalized society, one tiny country’s economic collapse is affecting the entire world as global markets steadily decline. This is going to affect all of our futures, especially those of us who will soon be entering the workforce.
Greece is an absolutely breathtaking country with gorgeous architecture and beautiful beaches I have spent all my summers visiting.
Unfortunately, Greece is also ridden with a corrupt political system and a financial crisis that is putting the entire euro zone in danger. So what exactly is going on? In an extremely simplified version, here’s what you should know:
Beginning of the Crisis
At a basic level, Greece went through a period of growth where the government kept borrowing money to finance projects. However, they were unable to pay back the money, digging them deeper and deeper into debt. When Prime Minister Papandreou’s government came to power in 2009, it soon after revealed that the government’s deficits were three times those of the previous government’s, triggering the debt crisis.
No one was willing to let Greece borrow money because of the threat that it couldn’t pay them back. Consult these offensive yet effective cartoon videos for reference.
What happened next?
The European Union couldn’t let Greece collapse because Greece is part of the European Union and the euro zone, meaning the EU must stand together. The economies in the euro zone are dependent on one another, so if one falls they all tumble. After a series of bailout packages from the EU and IMF, Greece has yet to be able to resolve its crisis with the political turmoil only escalating. Furthermore, the conditions of these packages involve cutting many workers’ benefits and tax increases. It’s these bailout conditions that prompted national waves of strikes and protests. This past summer when I was at the island my family is from, Samos, all of the cabs were on strike for a few weeks. It was disturbing to see tourists arriving to the gorgeous island and dragging their suitcases fifteen or twenty minutes simply to get to a hotel.
Why is everyone so upset?
Greece has a long history of distrust in the government and police force. The austerity measures being proposed by these bailout plans are not helping this sensitive relationship. Costs include, “higher taxes, harsh wage and pension cuts, public sector redundancies, and the squeezing of public services.” Although these reforms may be necessary for future change, the people having to suffer through them now are clearly getting the short end of the stick. Many small businesses are being forced to close down and great amounts of people are losing their jobs each day. Faith in the country is dwindling and Greek citizens are promptly taking their money out of the country and depositing it in places like Switzerland, worsening matters for Greece. These people feel that they have no choice because they see Greece going bankrupt very soon. One citizen said, “I am impressed that the people have not yet stormed into Parliament and burned the politicians alive – like a souvlaki.”
The Greeks aren’t taking this situation sitting down. Protests have always been prominent in Greek life, but have become increasingly present in the past couple of years amongst the recent economic turmoil. These protests often turn violent which you can see in this video and in this one.
What now?
As of November 9, Prime Minister Papandreou has stepped down and a new government is in the process of forming. After his disastrous attempt to put a referendum on the latest bailout plan (which would have ultimately led to the people voting to exit out of the euro zone), his time was done. It will be extremely interesting to see what happens in the upcoming days.
Greece is not alone; Spain, Italy and Portugal are facing similar crises at this very second. The fate of Greece is not only close to my heart but important for the future of the E.U. and consequently the entire world. If Greece defaults, the costs will be felt by everyone.
Sources:
Photo 1:
http://4.bp.blogspot.com/_JaysreT0OQI/S-lNVx-VUkI/AAAAAAAAAM0/qefsNfDXlo…
Photo 2: http://www.citypictures.org/data/media/226/Moonrise_Over_Santorini_Greece.jpg
Photo 3:
http://3.bp.blogspot.com/-7SUaFx4teFo/TXY1XBPOOoI/AAAAAAAAAx8/9Xxlb18-m2I/s320/Greek%2BDebt%2Bcrisis%2Bcartoon%2Bby%2Btoonpool.jpeg
Photo 4:
http://blogs.telegraph.co.uk/news/files/2011/06/Greece-protests-001.jpg
Photo 5:
http://mrzine.monthlyreview.org/2010/images/greek_economic_crisis_by_latuff.jpg
http://www.greekcrisis.net/
http://www.guardian.co.uk/world/2011/jun/15/europe-warned-greece-financial-crisis
http://www.nytimes.com/2011/11/07/world/europe/in-greece-economic-crisis-brings-rage-and-paralysis.html?_r=1
http://trueslant.com/justingardner/2010/05/11/the-greek-crisis-explained-in-cartoons/