Monday, 6 July 2015

Greece says no to the unfair bailout terms-what next?

Yesterday, Greek voters decisively rejected the bailout terms offered by creditors, by a margin of 61% to 39%, which is also a rejection of any further austerity in Greece. Currently, critical supplies of food and medicine are about to run out and Greek citizens are only able to withdraw up to 60 Euros per day (approximately £45) from ATMs.

I am very pleased with this result, but what are its potential implications elsewhere within Europe and particularly the Eurozone, where unemployment rates are much higher than in non-Eurozone European nations?

1. Greece could be forced to exit from the Euro, and other nations could then follow. There could be negative economic effects from reintroducing pre-Euro currencies, but this may be a small price to pay, in my opinion, from freeing one's nation from the shackles of the European Central Bank by leaving the Euro. I believe the situation would be much easier if the Euro had not been introduced in the first place. However, Greeks are still largely in favour of Greece staying within the Eurozone, fearing even greater economic ruin if Greece is forced to leave the Euro.

2. This result could boost the prospects of anti-austerity parties, movements and organisations elsewhere in Europe. Spain, which is having parliamentary elections at the end of this year, has been hit almost as bad by austerity as Greece has been. Podemos is still polling well in Spain, and with the knowledge that left-wing governments can achieve something against austerity, should see a rise in support.

As for other consequences beyond the two above, I am not so sure yet-but this a key step forward in the fightback against austerity and for a fairer alternative.

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