International Trade

Get me past the Greek

Back in 2010, ironically about the same time as Greece agreed to the EU backed bailout program, “Get him to the Greek” was a rock (hardly Greek) comedy. But at this moment in time, German Chancellor Angela Merkel and indeed most of the leaders in the EU (especially Francois Hollande, President of France), would simply like to get past the Greeks and move on. But that’s not likely to happen this summer. Last week, leftist Greek Prime Minister Alex Tsipras got his desired yes ‘No’ vote in the Greek referendum (or no ‘No’ vote from an EU perspective) which means the EU faces a greater crisis in faith in the institution than what logically should lay ahead for either the EU and Greece. From a North American perspective, it is very difficult to understand the ramifications of a small economy, one with a nearly city-sized 11 million population, having so much influence over European politics. Nevertheless, this is the great test. Is Europe as a region greater than the sum of its parts? Or to the contrary, is Europe a region that exists because of each Euro circulating in the zone? The binding force in Europe is the Euro. The unified currency has been the single most important concept behind the EU. When the Euro was being considered, the case was brought forward on how the Euro would compete with the US and NAFTA. This was to be a trade equalizer. A unified currency isn’t and wasn’t an easy thing to accept. It would be hard for Mexico or Canada to accept the US dollar as the universal currency. Even the concept of open borders on a European level is arguably out of the reach of the North America’s open trade agreement. Germany and France (the UK retained the GBP and is looking better for that decision) took the plunge and for the most part the scale of their economies enabled the Euro to survive and thrive even with many new, much weaker economies (post Soviet Union) being added to the whole. Of course, the true issue is just that: some of the weaker economies have successfully divorced themselves from the Russian collective and others [smaller economies] who challenged by downturns have survived, so why Greece? Greece, for the West, is the birthplace of democracy and ideology in its many permutations, which is the basis for the EU. It is no simple thing to spurn the concept, even as Greece turns its back (from the perspective of the IMF [International Monetary Fund], ECB [European Central Bank] and the EC [European Commission]) on the very lenders that have kept their shop doors open for the last five years. Of course Polonius’s advice (Hamlet), “Neither a borrower nor a lender be, for a loan oft loses both itself and friend [ask the Germans],” seems to be lost on all parties at this stage. We live in an age when economic existence from sovereign to civilian requires both: lenders and borrowers. But sensitivity to this reality is difficult as the world’s economic imbalances often remind us. For Greece, whether they like to admit it, it is now about “should I stay or should I go now” the lyrics from 80’s English punk rock band Clash, that should resonate with a 40 year old Tsipras. A Greek exit, stage left?
George Lauriat
George Lauriat

Editor in Chief

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