What are Greece’s Options?
It now appears that Slovakia will approve the European Financial Stability Facility and “the Troika” (IMF, EU, and European Central Bank) will release the €8 billion to Greece. The BBC has produced a very nice decision tree that outlines what could still happen in Greece. While many decisions still need to be made, the BBC’s assessment is bleak—none of its final results produce a very happy ending. It appears that for the rest of the world, the best solution is for austerity to succeed in Greece, as at least then the lingering economic weakness is limited to Greece. Two other solutions—MORAL HAZARD and GLOBAL MELTDOWN—result in the crisis spilling out of Greece and into the world economy.
The BBC also brought out an interesting point in the POLITICAL TURMOIL result. It claimed that “the CIA has warned of a possible military coup.” While this would not be the first military coup in Greek history—Greece previously experienced the Régime of the Colonels from 1967 to 1974. However, a military coup would have serious implications for Greece’s place in Europe. The BBC decision tree assumes that Greece remains in the Eurozone as political turmoil breaks out. However, one of the core requirements of being a member of the EU is that the country is democratic, and having a military junta in charge is hardly democratic. It would be hard for the EU to justify keeping a non-democratic Greece in the EU, but forcing it out of the euro could also be an issue.
To learn about the Greek end of the European Debt Crisis, the EU Center’s “ ...Is the Euro Doomed? Why Europe’s Financial Crisis Might Worry All of US” includes the Modern Greek Language Coordinator at Indiana University, who spent the summer in Greece and is an expert on the Greek situation.