One of the things I’ve always loved about travel is its ability to widen your perspective. While most of the world seems preoccupied with the current occupant of the White House and his ‘fine-tuned machine’, there are other things going on in the world. Some are worth noting as I think they offer insight into global currents with far-reaching consequences.
When I visited Greece last year, I was surprised at how wobbly the economy looked. I noted some of this in a prior post.. What I saw was more akin to a developing country than that of a European Union member state.
The Parthenon at the Acropolis, Athens
Traveling to and from the airport I was struck by the number of partially completed buildings abandoned in mid-construction. Along with these half-built skeletons were plenty of older buildings with ‘For Sale‘ or ‘For Rent‘ signs on them. The businesses they once housed were long gone. These forlorn looking structures were now coated with a sun-baked patina of grime, dust and graffiti. This went on for the duration of my 40-minute taxi ride to the airport. The whole experience underscored the palpable air of trepidation I sensed hanging over Athens and other places I visited in Greece.
Which brings me to the subject of this post. A year after my visit, Greece is still struggling to right its listing ship of state. With a €7 billion payment due in July that it might not be able to make, Greece’s membership in the EU is once again in doubt. For its part, the EU has been cajoling the IMF (International Monetary Fund) to get some skin in the game.
The IMF, however, is hardly anxious to throw their own money at this problem. It’s almost as if they see the writing on the wall. The IMF wants the EU to ‘forgive‘ a substantial portion of Greek debt. Of course, the German banks floating the EU have zero appetite for taking a haircut on their Greek bailouts.
This is where things stand in early 2017. With the Greek government refusing to inflict any further pain on its beleaguered citizens, it’s become a kind of ‘Mexican standoff” with Greece, the EU and the IMF staring each other down like Clint Eastwood, Eli Wallach and Lee Van Cleef in ‘The Good, the Bad, and the Ugly.’
Bougainvillea and Acropolis, Athens
This matters to all of us, because Greece leaving the EU will have serious repercussions on global financial markets. The kabuki theater has to end sooner or later. Many Greeks I spoke with shared a belief that EU membership had been a mistake. A young man working in an Athens electronics store made a compelling argument that could also apply to other EU nations like Spain, Portugal and Italy.
It goes like this: the culture and history of a country like Greece is very different from nations like Germany. This difference can be seen in the each country’s industrial output. For example, the Germans make BMWs, Audis, Mercedes-Benz—big ticket luxury cars the world clamors to buy. Greece, on the other hand, exports feta cheese and olive oil.
I’m oversimplifying here, but I think it makes the point. Consider Germany’s per capita annual income, around $48,000 USD, and compare it to Greece’s $23,000 USD. It doesn’t take an MBA in economics to see that such a disparity in wealth is hardly a basis for sharing a common currency. I have no idea how this will play out. Like so many other things once thought improbable, who could have imagined the EU disintegrating?