Sunday, July 12, 2015

News Note: EU Splintered over Greece

I don't know what is going to happen with Greece, but the idea that "we are all in this together" that you see Eurozone politicians talk about has pretty much been obliterated when push comes to shove and people have to make real world choices. Below is a map from The Guardian that illustrates how divided the Eurozone is when it matters most. 

What can we learn from this giant mess? No matter what politicians may say, we are really pretty much on our own if things go south. Ask the Greek people about this if you doubt it as they face another unknown period of time standing in lines hoping they can get their own money back out of the bank to pay bills. As usual, the poorest and most vulnerable suffer the most while politicians play games with their lives. The total disregard for the elderly and poor who are having to live through this nightmare tells you all you need to know about the politicians in charge of this horrific mess. 

They are going to look out for themselves first and foremost. If they cared about the people they would put re-opening the banks in Greece as their first priority even if they need more time for further negotiations. Not to do so shows total disregard for those who are suffering most who trusted their leaders not to let this happen. Clearly, that trust was completely misplaced

In my view here, the political leaders of the Eurozone get a grade of F for their handing of this.  And those who have said that this proves that regional cooperation will not work are getting some powerful evidence to support that view. Hopefully, at some point, common sense will prevail to fix this. But Euro and Greek leaders should be ashamed to make the poor and elderly suffer while they grandstand in front of the media. They could get the banks back open if they really wanted to even if more time is needed to get a deal (or decide there will be no deal). If things change and they move to re-open the banks, I will retract these comments. Otherwise, that's how I view it here. I try to avoid commentary here, but this is absolutely pathetic leadership as I see it right now.

If you want to follow the Greek crisis, The Guardian does a good job of live coverage. 

How the eurozone nations line up

want to avoid a Grexit at all costs
are wavering, but would prefer to
avoid a Grexit
countries are open to a Grexit

Added comments:

Admittedly, those of us who do not live in the EU don't have all the facts to understand why it has come to watching poor and elderly stand in lines hoping to get a little of their money back in order to stay alive. All we can do is watch all this and wonder. Perhaps there are justifiable reasons. 

But below are some questions I think these Euro zone leaders should answer to the public about how things got to this point. I hope they have to answer them some day.

Questions for the creditors:

1) Why did you loan Greece $320 billion in the first place when everyone with any common sense at all knew that Greece could not pay it back? If I have an income of $50,000 a year and Mastercard gives me a million dollar line of credit, whose fault is it if I get into debt trouble as an example? Did anyone do real due diligence on the ability of the borrower to pay when the $320 billion was loaned out?

2) Did you make the loans because of your desire to help the Greek people or to save your own banks (who were on the hook at the time when the bailout loans were done)?

3) You had months to get some kind of deal worked out on this (or determine a deal could not be done). Why wait until the last minute and then use closing the banks on the people as part of pressure tactics to get what you wanted?

4) Do you care at all about the people your actions are hurting? Or are they just pawns to be used to make sure you get what you want?

Questions for the Greek government:

1) Same as #3 for the creditors. You had months to make sure things didn't get to this point. Why wait until the last minute to get serious about negotiations and gamble with your people's lives in the process?

2) Related to Question #1 above, Why did you wait until time had nearly run out to come up with a surprise referendum vote? This could have been done much earlier. What were you thinking?

3) Why did you promise the people just before the referendum that a deal would happen within a couple of days and that the banks would re-open? Were you just openly lying to the people?

I am sure there are many more good questions that could be asked of these "leaders", but these would be good ones to start with. As we can see, there is plenty of blame to go around for this. But the people standing in line with their lives in the balance likely don't care who is to blame. They just know they made a huge mistake trusting these "leaders". I doubt they will make that mistake again. And the rest of us need to see what is happening here and learn from it. People show their true colors when pressure arrives.

The message: The promises of politicians and financial institutions should be taken with a huge grain of salt. As we see, when things get tough, they can be quite empty and hollow. It is wise to have a backup plan available in case things ever go south.

Additional added note: A thank you to a reader here who sent me this link to an article in the Independent (UK) with some background on the history of Greece entering the Eurozone.

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