Greece's economic crisis -- too much borrowing, too little GDP -- has roiled international markets and now in light of Greek voters' rejection of the additional belt-tightening measures prescribed by the EU, could threaten the stability of the EU (according at least to some Cassandras).
I don't think the EU will really fall apart over this. Not immediately, at least. First, because Greece still has the option to negotiate a deal that is more to its liking - if the country's leaders are realistic about how far the new popular mandate extends. Even if Greece pushes itself into abandoning the EU ship, that's not necessarily fatal to the Union. There will be discomfort. There will be adjustment. There may be recriminations...
Ah yes, recriminations. I'm no economist but I in my view whatever harm does befall the European Union will be its just desserts. Greece was not ready for membership in 1981 and ought not to have been included until its economy was on a sounder footing. I'd argue the decision was primarily a political one, maybe to some extent also a nostalgic one (Greece was the cradle of western civilization, they said) but it could have been made only while wearing a pair of very dark-tinted rose spectacles.
Long-term, there may be a greater danger to EU unity. As Robert Samuelson has pointed out, several other EU countries, as well as the U.S. and Japan, face somewhat similar economic imbalances (basically, debt too high) with limited options for overcoming them. Greece is the basket case now but we should all hope it doesn't turn out to be the leading edge of a huge wave.
Comments