In November of 2011, "Saturday Night Live" satirized the Greek debt crisis via a skit in which the Greek gods convened on Mount Olympus in order to find a solution, only to realize that there was no Greek god of finance. In response Zeus was forced to summon “Klaus, the German God of Prudence and Austerity” who offered to lend Greece money, if they found responsibility and made cutbacks. Zeus outright refused, reminding Klaus that Greece would bring down the entire Eurozone without aid.
In reality, aid to Greece came not from “Klaus,” but from the International Monetary Fund, the European Central Bank and the European Commission. However, even after two bailouts, in July of 2015, Greece defaulted on its debt obligations. The saga of Greece’s debt crisis has reached it's most recent boiling point.
As part of the Eurozone, the 19 European countries that share the Euro, Greece’s default has consequences beyond the Hellenic Republic, weakening the Euro’s value against other currencies. In response, many in Greece and abroad have called for a Greek exit from the Eurozone, arguing that a reintroduction of the drachma (the national currency prior to the Euro) would benefit Greece and save the falling Euro.
The Greek debt problem became evident as early as 2004, three years after Greece joined the Euro. That year, the public record stated that the Greek budget deficit was 1.5 percent of its GDP when in reality it was 8.3 percent, a violation of the EU's charter and guiding document, the Maastricht treaty. Peter Doukas, Budget Minister at the time, cautioned that they should start cutting down the budget, but was rebuffed. To cover the difference, Greece began to borrow heavily. It could easily do this, because the Euro was a shared currency and Greece was given similar borrowing conditions to Germany.
As in the SNL skit, the media has portrayed the Greek debt crisis as predominantly a conflict between Germany and Greece, a view that many Greeks share. Germany has become the scapegoat for Greece’s financial woes, being called oppressive for the conditions it imposed in order for any kind of aid to Greece. In March 2015, there was a minor controversy when a doctored video portrayed the Greek Finance Minister, Yanis Varoufakis, giving the middle finger to Germans. While the controversy passed, Syriza, Greece’s left-wing ruling party has been content to continue to blame Germany for Greek woes, which it has done even before taking power. In Greece, caricatures of German officials as Nazis abound, and Greece has even called for reparations from Germany for treatment during the Second World War. Meanwhile, many Germans resent their past being used as a bargaining chip in current negotiations. As one of the driving forces behind European integration, Germany looks at Greece’s recent actions with angst, seeing them as a threat to the unity of Europe.
On June 27, 2015, the International Monetary Fund, the European Central Bank and the European Commission created an agreement in which another bailout of Greece would take place if conditions were met. In response the Syriza government called a referendum on the agreement for Sunday, July 5, which asked whether the agreement should be accepted. Despite at first seeming in favor of the agreement, Prime Minister Alexis Tsipras now supports a “no” vote, expecting that an overwhelming “no” vote will give Greece a larger mandate in negotiations. Additionally, the Syriza government has threatened to call snap elections in the event of a “yes” vote, seeking another electoral victory in order to have a larger mandate.
While government officials seek political solutions to the crisis, Greeks have begun to feel its effects on the ground. On June 29, the government announced that banks would be closed until July 6, with ATM withdrawals limited to 60 Euros a day. The government has sworn to uphold pension distribution, but some pensioners lack ATM cards and will not be able to access the funds. In case of a governmental failure to fulfill debt obligations, Thom Feeney of London, has created an Indiegogo page to crowdsource the Greek debt, a sum of 1.6 billion Euros, claiming that if every European donated 3 Euros the crisis would end. The page offers several perks, including a small bottle of Ouzo, Greek wine or a postcard of the Prime Minister, depending on the donation. In a time period of six days, the fund has managed to raise 1,711,591 Euro from 97,779 people, a meager amount compared to the amount of Greek debt.
Thus, the debt crisis is ongoing. There was a no vote on the July 5 referendum and on July 8, Greece submitted the request for a three-year loan from the European Stability Mechanism — an EU agency that provides loans. Whether the problem can be solved at all, and whether or not Greece can or will remain a member of the EU has yet to be seen.
