The people of Greece have just done something remarkable. They have defied the dictates of the oligarchs and bankers and said “no” – we actually want to live decent, meaningful lives out of poverty – especially a poverty imposed on the basis of failed policies, acknowledged as failed by the very people who imposed them – the IMF.
Think about this: over 50% of the young people of Greece aged between 16 and 24 are long term unemployed; overall unemployment is at 25%; food consumption in Greece has fallen by a quarter over the last five years and there is a sense of growing despair about whether or not there is a future.
The options before the Greek people were: (a) reject the deal offered by the EU/IMF/ECB and face dire consequences now; or (b) accept the offer by the EU/IMF and ECB and face dire consequences for a really long time with a growing loss of control. The Greek chose to challenge the system.
What happens next is anyone’s guess. The sensible thing to do would be for Greece to exit the Euro, devalue its currency and default on all of its loans. That is “do an Iceland”. Getting control back of their currency and their economic levers is key to their future. Leaving with the EU/IMF/ECB would be a disaster.
It will all be very messy for a while. But in the end, Greece can come out of the other side of this.
It has made a good start: using democracy to make decisions. While this is an anathema to Mrs. Merkel and her allies, it starts to raise questions about just how decisions get made. If Spain elects its own anti-austerity party and follows a similar course, we will see the end of the Euro and a shift of substance in Europe.
David Cameron, the British Prime Minister, will be watching carefully. He has promised an in/out referendum on EU membership for the UK. He is campaigning for reform of the EU and all of this may just be helpful to his cause. It certainly creates spaces in which he can weave a plan or plot.
What happens in the next few days will be crucial, not just for Greece but for the Eurozone and the EU. Keep a keen eye.