OXI! Greek Voters Stand Up for A New Deal

While Americans celebrated a long-ago victory against British colonial overlords, the small but proud nation of Greece stood up to reject the failed austerity economics proscribed by European bureaucrats that has driven the country into a debt-driven dependency and depression.
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Digital, Euro-Rettungsschirm, german phrase synonymous to European Financial Stability Facility EFSF and European Stability Mechanism ESM
Digital, Euro-Rettungsschirm, german phrase synonymous to European Financial Stability Facility EFSF and European Stability Mechanism ESM

On the same weekend that Americans celebrated a long-ago victory against British colonial overlords, the small but proud nation of Greece stood up to reject the failed austerity economics, proscribed by European bureaucrats and bankers, that has driven the country into spiraling, debt-driven dependency and depression.

Awakening election day on the holy Greek island of Patmos--an island renowned for biblical apocalyptic visions once dreamed in a cave--I thought voters here might vote "Yes" to avoid the doomsday scenario forecasted by some if voters shot down the latest financial bailout package offered by the Troika. Instead, 63% of Patmians voted to reject further austerity, even with the risk of prompting a "Grexit" from the Eurozone.

"No matter what they (European creditors) do to me next," said a restaurant owner in the historic white-washed village of Chora as polls closed here, "at least I'll be able to say in the future that I said 'No' rather than 'Yes' to it."

"Today democracy is born once more and in the same country, Greece," an art gallery owner proudly told me after the election result was announced. "And because it was born again, it will return to Europe."

When the European Central Bank closed off liquidity assistance to Greek banks, forcing them to close last Monday, it appeared that German Chancellor Angela Merkel and her Finance Minister Wolfgang Schauble might succeed at "regime change" through fear-inducing financial panic. Greeks can still only withdraw 60 euros a day from ATMs, and pensioners struggle to pull out their modest weekly cash payments from shuttered banks.

The tactic reminded me of the economic war waged by the Nixon Administration against the Allende government of Chile in the early 1970's. Offended by the mild socialist experiment in "America's backyard," Nixon and Kissinger sought to reduce and deny credit to the country from multilateral lending institutions to "make the economy scream." Yanis Varoufakis, Greece's now out-going Finance Minister, accused the country's creditors of trying to "terrorise" Greeks into accepting austerity.

But for desperate young Greeks, plagued by unemployment rates fluctuating between 50-60% these past years, rejecting the failed medicine that has placed the country on life support is seen as a more desirable path to a better possible future.

"Greece is not about the money. It's the idea, the spirit, a way of life," a 70 year-old Greek friend told us as we sat together after the vote in the Patmos port town square of Skala. "They are afraid of this new model of [Prime Minister Alexis] Tsipras and Varoufakis, and of young people, and having it spread to Spain, Italy and elsewhere."

Of course, Greece's deep-seated problems cannot simply be blamed on European creditors. The country is burdened by political clientelism, weak governance, tax evasion and a culture of mistrust. Easy euro borrowing over the past decade (fueled by reckless but highly profitable European banks), has contributed to these days of reckoning.

Islanders here know that tough times lay ahead, whether or not their country remains within the euro. The day after the fateful vote, critical decisions await. Will the European Central Bank punish Greek voters and the Syriza upstarts by refusing to turn on the spigot for Greece's beleaguered banks until a new deal can be done? Will there be a write-down of Greece's unsustainable debt, as now called for by IMF economists?

Greece is the unfortunate canary in the coal mine for the future of the euro project (and the wider global economy addicted to debt). Is Europe's financial and political elite capable of awakening to the need for a new deal on the continent? Or will it simply fear Greece as a dangerous example to be cut-off and left adrift?

I lived in Eastern Europe during the fall of 1989, when the collapse of the Berlin Wall sparked the unification of Cold War Europe. Ten years later, the euro was launched as a monetary union to, in part, bond people together with the hope of overcoming the furies of a war-plagued Europe in the 20th century. Could it now be that a small country of 11 million people (with an economy the size of Oregon), wrecked and weary from five years of austerity economics, has exercised old-fashioned democracy to undo a perhaps noble but fatally flawed dream of a single European currency?

Stay tuned.

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