The following editorial appeared in the Chicago Tribune on Tuesday, July 7:
You’ve had it with that boss of yours, so it felt great to unload. This is what I really think, said you. And the next morning? With luck, you still have your job … and a relationship to manage.
So, Greece, are you over it?
Greek voters lashed out Sunday at their European creditors, voting to reject a bailout deal because it would impose painful spending cuts and tax increases.
The country awoke Monday to the spoils of victory: banks closed, economy in free fall, creditors and European leaders unmoved.
Just as everything was before the vote.
A cathartic exercise, maybe, for the people of Greece. But the future is still the same: Either Greece ponies up a sound economic proposal or it will be headed out the door of the eurozone.
That would be genuinely unsettling for Europe, but disastrous for Greece.
The surprise move by Greek Prime Minister Alexis Tsipras to call a referendum wasn’t quite as pointless as an employee temper tantrum. He didn’t like the way negotiations were headed with Europe and the IMF, so he interrupted the talks to put the deal to a vote. He got the result he wanted from his citizens. But it hardly seems likely that he’ll get the result he wants from the rest of Europe because his people joined him in a massive denial of reality.
European leaders on Monday responded to results with patience, but their exasperation is clear.
You may be wondering at this point whether this European office drama is anything more than a curiosity for Americans. There’s a long backstory to this involving Europe’s dream of building a continent-wide super-economy. Greece joined the common currency but couldn’t endure the 2008 financial crisis and needed a bailout from Europe and the International Monetary Fund that totals $270 billion and counting. Here are the stakes:
—If Greece defaults on its loans and departs the euro in haste, the country ruptures the European dream of togetherness and possibly inflicts wide-ranging damage on the global capital system. Globalization is like a sweater: Tug at the wrong strand at the wrong time and who knows what might happen? A further risk: If Greece is on the outs in Europe, it could swing into Russia’s orbit.
—If Greece stays in the euro because it receives a sweet bailout deal, other weak players such as Portugal or Italy could protest that they want the same generous terms. That’s potentially chaotic.
—Either way, the Greeks suffer in the short-term. The economy has contracted by 25 percent and won’t stabilize for a long time, either as part of the euro or with a return to the drachma.
Tsipras is expected to present a new offer to European finance ministers Tuesday. He’s already made one move he knew would please his counterparts: He replaced his finance minister, whom the Europeans had come to loathe.
Time is running short. Greek banks, still closed, are perilously short of cash. Europe will have to turn the spigot back on, or the government effectively goes bankrupt and has to hand out chits to pensioners. The Europeans, led by German Chancellor Angela Merkel, won’t agree to a new bailout deal unless Greece agrees to take its austerity medicine. Tsipras will have to thread a path that is acceptable to the Europeans. Otherwise, a Greek exit from the euro seems likely. That won’t be put to a feel-better referendum.
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