Oxi or Nai, it’s still a Greek tragedy

Oxi or Nai. No or Yes. The Greek public has just begun voting in a referendum that presents the biggest challenge to the running of the euro since its adoption. However, I am pretty sure the last thing the Greek public care about is the stability of the euro. Thing to remember is that it is every day people and families that are being directly impacted by years of questionable governing and mismanagement of the country’s economy. The last five to seven years have been tough on Greeks, really tough. Irrespective of the vote today, and no matter how you look at it, the next five years will continue to be hard on the Greek public. Sure there have been cries of “Germany – remember 1953! Rid us of our debt.” However, it is a different world 60 years on, the global economy is supposedly relatively shielded and the cold war is long over.

So as people across cash-strapped Greece wait to vote in a referendum on whether to accept proposals made by creditors, they should remember that similar economic crises occurred not so long ago in Cyprus.

I was born and brought up in Cyprus. I spent seventeen glorious years there until I left to study in the UK. Alongside Australia, it is my home. It is where I grew up, and has formed the person I am today. I understand the Mediterranean culture and mentality, their resilience, but most importantly their enjoyment of the simple good life. The “emberasii” mentality, which is a case of don’t worry it will be all right.

Interestingly, since the hardships of 2013, it seems Cyprus is learning its lessons, and considering how much the country looks up to Greece the press and commentary from the Cypriots is quite distancing. “(Sharing a) language is one thing but being the same economy is completely different” said Harris Georgiades, finance minister.

Cypriot banks were hit hard by the restructuring of Greek sovereign debt in 2012. Currently, the outlook for Cyprus is guarded. The country finally returned to economic growth this year and the capital controls were removed entirely in April. However, further economic reform is necessary to ensure sustainable growth. Unlike Greece, Cyprus has been largely diligent in implementing reforms required in return for an international bailout it received in 2013.

Greece, beyond clichés has incredible natural beauty, historical heritage and thrilling experiences to provide to its visitors and this is a fact no one can dispute. It is an amazing country to visit. Summer is underway, and I simply love that “emberasii” mentality flowing through their advertising shown below – brilliant!:

Greece faces a choice similar to the one faced by Cyprus in 2013. Its banking system depends for its survival on emergency lending controlled by the European Central Bank. Bank runs have forced the imposition of capital controls, temporary bank closures and limits on deposit withdrawals. The consequences of leaving the European Union are likely to be as dire for Greece as they would have been for Cyprus. Reaching an accommodation with its creditors is the preferred outcome.

‘Grexit’ may be on the cards, and may prove premature. Plenty of economists and market experts take the view that the parties will blink rather than see a true Greek tragedy. As with Cyprus any lasting recovery will require significant economic and fiscal reform.

Καλή τύχη Ελλάδα (Good luck Greece).

Thanks for reading.

Kai

Referenced articles:

Cyprus seeks distance from Greek euro drama

Greece referendum: Greeks in decisive vote over debt deal

Greeks begin voting in referendum as the euro faces its biggest challenge

No Greek tragedy for Australia

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