This is a story about democracy breaking through. We've had dramatic political events in the U.S. recently -- it's not likely that many of us have been paying much attention to what has been going on in Greece and the European Monetary Union. But Sunday's 61 percent vote against further economic measures that would immiserate ordinary Greeks in order to placate northern European bankers should invigorate everyone who prefers democracy to plutocracy.
Sure, Greek governments in the '00s ran up some huge debts, debts the country was never likely to repay. Note the lenders were probably smart enough to know that, but they trusted the European Union project to save their speculating asses.
Comes the 2008 recession and by 2010, Greece can't pay up. So in that year, the European Central Bank, European Commission and the International Monetary Fund (the Troika) sent enough cash to Greece to enable the private creditors (mostly French and German banks) to escape their losses. In return Greece has had to cut government services, raised taxes and slashed pensions. This sent the Greek economy into a tailspin -- twenty-five percent unemployment and collapsing small businesses sent some people to picking through garbage for food. Meanwhile, all this pain is doing no more than pay interest to the Troika. Greece is never going to pay off the principle on the original loans. Repayment was probably always impossible; with a trashed economy, default is a certainty.
Meanwhile, the Greek people decided they couldn't forever let technocrats and Northern European elites decide what their lives would be like -- or if they'd even survive. In January of this year, exhausted Greek voters turned to the party of the Coalition of the Left, Syriza. Syriza promised to negotiate a better deal with the Troika. Over several months, led by German Chancellor Angela Merkel, the Troika said the bankerly equivalent of "screw you and we will take your mother as well as your money." Greek Prime Minister Alexis Tsipras finally said we'll just put that "offer" of yours up to a vote of the people. That is what happened Sunday. Greeks thumbed their noses in return.
Economist Paul Krugman says this is a good thing and he knows a lot more about it than I do.
Just maybe, Greece will now have to leave the Euro, the common currency used by most of the states of the continent. This may be economically painful, but it is not clear that fate will be worse than being dictated to by (mostly) German plutocrats. And people insisting on self-determination against bankers is almost always inspiring.