The majority of the Greeks participating in the nation wide referendum on July 5th said NO to the offer made by the troika of lenders in exchange for further financial support. This provoked a wave of indignation among financial experts and plain folks.
In particular, they think Greece should be punished for being too arrogant. They offer the European authorities to exclude Greece from both the Eurozone and he European Union. Otherwise, this may trigger the so-called domino effect when other debt-ridden European nations may start seeking beneficial conditions without taking responsibility for their liabilities.
It should be noted that Alexis Tsipras made the Greeks say NO to the troika of lenders. It seems like this support given by the Greeks empowered the Greek authorities and made them more confident in the forthcoming talks. After the results go public, he Twitted that Greece was celebrating the victory of democracy and underlined that the government was going to resume the talks with the lenders though on new conditions.
Yanis Varoufakis resigned from his posit of the Greek Minister of Finance since he felt like the Euro Group didn’t want to see him during the next round of talks. At the same time, Greece seem to know that it can now play with European leaders. Apparently, neither Angela Merkel not Francois Hollande want to be known as the leaders participating in the disintegration of the Eurozone and the EU.
The IMF says the Greek debt is unacceptable. This leads us to believe that there is no point in hoping that Greece will manage to pay off its debt completely. What if they promise to write off a certain share of the debt in exchange for some structural reforms in Greece without austerity and make the Greek economy more self-reliant?
On top of that, it is about geopolitics. The thing is that the other day Washington already expressed its concerns that the degree at which the Greek society is upset and tired of miserable existence while being a European nation may trigger disputes between other European nations. On top of that, Greece is still a NATO member defending the southern flank, where the Russian forces are getting more active. It seems like the USA is afraid that Greece may make friends with Russia in case the Eurozone makes it quit.
We should understand why Eastern members of the Eurozone are the biggest adversaries of compromising with Greece. At first, we may think that it is all about jealousy since after Greece got the financial aid a couple of years ago, the local standards of living improved. In reality, the reason is this:
While Eastern Eurozone members had to comply with tough financial requirements, Greece started its Eurozone membership with a lie about the budget deficit, which was unacceptable.
In particular, after the Greek referendum, the Slovakian Minister of Finance said that since Greece refused to make concessions and conduct structural reforms, it shouldn’t get easy loans anymore. If the lenders have to make concession to Greece, other nations (Serbia, Montenegro , Macedonia, Albania) striving hard to get a Eurozone membership will face double standards. The same holds true for Ukraine as it is fighting for a tiny chance to enter at least the EU.
If Greece wins, other nations will figure out that there is no point in honesty while getting a Eurozone membership is all about politics rather than economy and finances.
At the same time, this may be dangerous for the Eurozone integrity and future well-being since there are other debt-ridden Eurozone nations like Spain , where local authorities tend to sympathize Greece…
