It’s not easy being a Greek today. Virtually everyone agrees (including the large majority of Greeks) that the country has lived beyond its means for decades and that big changes have to be made, but there is vehement disagreement about how to get the country back on its feet again. Due to myopic and self-centered leadership in the European Union and Greece refusing to actually come to terms with the serious problem, the country has already suffered through an almost five year recession cum depression where the economy has shrunk by over 25% and youth unemployment is above 50%.
Now the cynical politicians who claim to be leaders in the EU are piling pressure on the Greeks to vote “yes” in the upcoming Grexit referendum on the onerous bailout they are offering the country. These politicians are trying to bludgeon the Greek people into accepting another “austerity” bailout program that will lead to many more years of suffering by the Greeks, and are willing to stretch the truth to get the job done.
Grexit – Two visions for the future of Greece
The hawkish leaders of the EU are working hard to hammer home the obviously false message that a “no” vote in the referendum means a Grexit. They can’t quite come out and say “we are going to kick you out of the EU if you don’t agree to our austerity bailout and years of poverty for millions” so they say it will be “extremely difficult” to make a deal to stay in the EU if Greeks vote “no”.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
Greek PM Tsipras and his Syriza party reject this one-sided, externalist interpretation of a referendum in their country, and say the vote is only about this particular proposal and the rejection of further extreme austerity and suffering. Moreover, Tsipras argues, a rejection of the austerity bailout deal will empower them in the future negotiations with the IMF and the EU. Political and legal experts note that there is no existing mechanism to kick Greece out of the EU (Grexit) or even just the euro monetary union as both were supposed to be permanent and irreversible.
Dijsselbloem and Schaeuble leading the pack of on Grexit
The two EU leaders leading the pack against Greece are Eurogroup chief Jeroen Dijsselbloem and German Finance Minister Wolfgang Schaeuble.
Dijsselbloem continued to meddle in internal Greek politics on Thursday saying Greece’s financial situation is deteriorating, and cynically suggesting a ‘No’ vote in the referendum would lead to questions about whether Athens belonged in the eurozone.
“The situation is only getting worse, due to Greek government’s behaviour,” Dijsselbloem (also Dutch finance minister) commented in a question-and-answer session in front of the Dutch parliament.
“In case of a ‘No’, Greece’s (financial) situation will become exceptionally difficult,” he continued, then tried not to notice as his nose grew longer when he said that Athens’ idea that a vote against austerity proposals would lead to less harsh reforms was “simply not true.”
Dijsselbloem ended his prevarications with an attempted rhetorical coup de grace when he said: “…if the Greeks say no, there is no base for a new programme, but there’s also the question whether a base remains for Greece in the eurozone.”