The Greek situation is difficult, but the explanation quite simple: creditors want to ensure they get paid by the Greek citizens, no matter what. The Greek population doesn’t want to pay for money they didn’t ask for, nor did they benefit of. The government doesn´t know what to do; it was elected to defend Greece against the “Troika” to put end, once and for all, to the austerity measures that have dramatically impoverished the country in the last years, but it is pressured by its European partners to continue with those same contractionary policies. How to decide? Referendum this Sunday.
The situation is very unfair with the average Greek citizen. In the last 5 years, the Greek have seen their salaries drastically reduced, in many cases they have lost their job, their social services have been cut, and their international reputation damaged. Today the Greek have no access to whatever savings they might have. Now they are told that it is not enough. This coming Sunday the Greek citizen has to choose between voting yes, meaning he has to continue paying for debts he didn´t contract nor he enjoyed, accepting even more cuts and social regression, or voting no, meaning that he accepts the consequently damage implied by having no access to credit and of Greece potentially leaving the euro.
On the one hand, voting no would imply changes, probably big ones, some probably painful. Will those changes be as painful as austerity measures have proven to be? On the other hand, voting yes would imply accepting past corruption and legitimatizing future one. Voting yes would mean to accept that mismanaged banks have to be saved at the expense of social welfare. Voting yes would be accepting that austerity works, when it does not. Voting yes would mean that “technocracy” (whatever that means today) beats democracy, that money beats ethics.
The Greek rightly wonder why more austerity. What is the logic of promoting more austerity when year after year of austerity the situation has only got worse? All over the world the emphasis has moved from “wrong” austerity to pro-growth policies. Even the IMF has warned about the dramatic consequences of austerity (see "Austerity doesn´t work") and has recommended to promote growth. But for Greece the recipe continues to be drastic cuts. Yes, some further budgetary adjustments seem sound, as reducing military spending, but further “killing” effective demand (and literally killing some Greek along the way) makes no sense in the long run. As Nobel laureates Josep Stiglitz and Paul Krugman argue, Greeks should vote no if they don’t want to get into an eternal down-spiral of more austerity and lower income (see "Grecia al borde").
Policies aside, the Greek (and many Spanish) wonder with what legitimacy those in the IMF and the Eurogroup can ask for more austerity, when they keep on increasing their already shameful salaries and expenses. The same IMF of Rodrigo Rato (alias “Rata”, now prosecuted by the Spanish Justice). The same IMF of DSK (who as IMF director spent thousands in private parties with prostitutes, and now also prosecuted by the Justice).
Some other basics about the Greek situation that should not be forgotten: 1. The crisis, in its major part, was not created by the Greeks; it came from shameful financial practices, mainly in the US. That spread all over Europe, 2. The European Central Bank has, since its creation, implemented monetary policies only in the benefit of Germany (see BCE polices), 3. Germany, the main creditor, still owes lots of money to Greece, and not form a distant past, but from the end of the WWII (Greek citizens from that time are still alive; they are asked to pay the Germans even when the Germans didn’t pay them in the past!!). 4. Greece has actually done what asked for; it has not worked.
It is fashion, and easy, to criticise Greece from Brussels and Frankfurt. But the Greeks have done enormous sacrifices already, translated in significantly lower living standards and very precarious situation for many of them, now facing unemployment, poverty, and social exclusion. With pain they have done what told to do, to cut expenses and recover fiscal surplus, and have achieved it. The situation has only got worse...
Rather than attacking the Greeks I want to thank them. They gave us not only an amazing yogurt, but also philosophy, modern science, democracy, and the “western” values we are nowadays so proud of. And we never paid them back (only maybe the yogurt). Today, when Europe is ruled by command and control, the Greeks are once more the champions of democracy; they defend their right to democratically decide their future, whatever it might be. A privilege that we didn’t have in Spain. And as Krugman and Stiglitz, and many others say, I am totally sure of what I would vote this Sunday if I was a Greek.