Well, this isn't an easy topic so please forgive me if I don't find simple words to describe it.
I also apologize in advance if I say something that sounds offensive, I don't mean to insult anybody.
That said, I admit I might be seen as somebody defending the "bad guys" in the EU (again), but I hope I can deliver some information about how they think and how I see this whole situation from the German point of view.
First of all:
I fully understand why the Greek people is angry and I hope that the rest of the EU can find a way to help Greece fix the problem, and not just because it will worsen the situation in the whole EU but for the sake of the people of Greece.
So what caused the situation and who is to blame, but most important: How can we fix it?
I am quite angry about some people:
- the banks
Well, I don't like them a lot and that's because they build up huge bubbles of non-existing money for decades until they blow up. And when they do they are saved by the governments because they are so important. Almost every economic crisis was caused by them and had to be paid for by you and me.
- the rating agencies:
Always keep in mind that every important rating agency is a US company. This is not meant to be US bashing but how is it possible that the US has such high debts and is still rated AAA+ while for example Ireland cannot be bancrupt until 2014 (because of the EU) but is rated B or C? This is what also happened to Greece. When a country is rated poorly then it has to pay higher interest rates. In some cases that is the reason why a country has liquidity problems in the first place. So basically it is similar to this situation: Somebody says you are broke, so no one lends you the money you need even though you can in fact pay it back. That leads to the situation where you cannot pay some bills and you really get broke. What a ball of bullsh**!
What does a rating agency do? What do they make money with? It doesn't sound like a real company but like something criminal. Who watches them anyway? I think people should stop listening to them and judge companies and countries according to real numbers instead of Wall Street make-believe. One company I worked for nearly had to file for bankrupcy because of such a rumor. And others have.
- the media
They jump on every train and start making the situation worse than it is by frightening the sh** out of people. Here in Germany there are already quite a lot of articles in newspapers and "documentaries" on TV that show what could happen in a worst case scenario and they show it like it is bound to happen in any case. Things like "Euros won't be worth anything so you will have to carry them around in shopping carts and people will take the shopping cart instead of the money because it is worth more. It will be 1929 all over again" I can't see any point in doing that besides frightening people.
They tell frightening stories about Greek people coming to Germany and stealing all of our jobs and ruining us and such things.
They picture Greece as a country full of lazy people who don't want to sacrifice anything to help their country to get out of the situation, and they point at some numbers about the Greek economy and say: "Here you can see that they don't want to change it, look how broken their system is."
Here in Germany our chancellor Mrs. Merkel is pictured as somebody who wants to throw our tax payers' money out of the window by helping Greece, her party might even lose the next elections because of that. (I don't like her and her party very much but that has other reasons) On the other side Germany is the most wealthy country in the EU and Greece is an important partner, so who can help them if we won't? So basically she is with her back against the wall. International pressure tells her she has to do something, and national pressure (buildt up by the media says she mustn't do anything.
And then we see pictures of the Greek press calling her "Nazi-Merkel" and talking about "Germany invading Greece economically", and a lot of people think this is the majority's opinion in Greece. When there are protests in Greece some German media simply say things that sound like "in Greece the people protest because we said they should stop being lazy, those morons!"
So everything is a bit one-sided, as always. Full of clichees. Greeks are all lazy sheepherders eating a lot of Zaziki, Americans are all like those strange religiously extreme Tea Party people, and the Polish steal cars all the time and sell them to vodka-gargling Russians, haha. The world isn't that simple. I'm very angry about that.
So it is a bit of a self-fulfilling prophecy: If everybody only waits for the worst-case scenario it might happen more quickly.
- the greek government
I think they lied to their own people a lot in the last few years. They delayed the neccessary reforms until it was too late. Now they don't want to be blamed for it and act like it was all the EU's fault.
They refused to even think about cutting their spendings on some important things:
In 2007 to 2009 Greece spent over 6% of their GNP for the military. That were €14 Billion each year. That hurt. Of course nobody in Germany protested because we were the ones who sold most of the weapons...
The wages grew faster than the economy could really afford, especially those public engineers, and Greece has a lot of them. The government had time to fix that slowly without too much people losing their jobs at the same time. Maybe it wouldn't have worked well, but it would likely have worked better than what they are doing now.
They even lowered taxes although they already had far too less income. Don't get me wrong, everybody loves tax cuts. In Germany the effective tax rate is about 25%, in the UK it is around 40% but in Greece it is only 15% They lowered taxes to win elections, but they did significant harm to the economy with that.
I might be wrong with some points I think, I admit that I am not an economy expert. But there are certainly a lot of things that went wrong economically. But always remember: I only have the numbers, I don't have all the information behind it.
Some important questions and my personal answers:
- Should Greece remain part of the Euro zone? --> From an economic point of view Greece (and others) shouldn't have joined the Euro zone in the first place without a stable economy. The value of our currency is in great danger because we expanded the euro zone too early. And even some of the older members were included for political reasons: Portugal, Greece, Ireland and Spain should not have been included until they were stable. But there were good reasons to include them from a political point of view. So now we have to live with that decision and solve that situation. So the answer is yes. Greece should stay. Papandreou's decision to ask the people might sound very democratic, but I think it isn't. It is a delay tactic I think. Plus he can blame whatever happens to the people because "they wanted it". You said they are angry. I understand that. But being angry will lead to decisions that are even worse. The government should know that and act accordingly.
- Should Greece carry on with reforms to help stabilizing itself? --> Yes, this is very important although some changes will hurt. International help can't save Greece if it doesn't change a lot. Even the EU has not unlimited money, that's why they insist on those changes. It's not because they have fun in dominating Greece, it is because they are frightened of the possibility that everything might break down. I think the media paint the wrong picture here, in Greece and also here.
- Should Greece be saved by the EU? (economic point of view) --> Yes. It will cost us a lot but Germany is economically powerful because of its partners, Greece is one of them. If Europe wants to continue competing with the US and China in the world it has to stand together.
- Should Greece be saved by the EU? (moral point of view) --> Hell yes! We Germans haven't forgot that it were Greek immigrants and guest workers (along with Portugese, Spanish, Italian and Turkish ones) that helped to rebuild our country after WWII. We owe Greece a lot.
That's it for now. I didn't cover everything and I hope I wasn't wrong too often.
I'm looking forward to other points of view (and also to corrections if I got something wrong in the wall of text above
)