I am writing this from my hotel room in Athens. I just returned from Syntagma Square, where there is a party taking place as thousands of people celebrate the victory of the OXI (or "No", pronounced "oi-hee") side of the referendum. It was a resounding, thunderous rebuke to the policies of the last 6 years that have created or worsened Greece's economic despair. But more on that theme later. Now, I will recount my experiences of the last few days.
I was originally booked to arrive in Rome on July 19th, and I had planned on coming to Athens shortly after that date. Tsipras's announcement of a referendum on July 5th changed that itinerary. I knew it would be an event of historical importance, and that I could not miss it, not only because of my sympathy and affection for Greece, but also because I have devoted most of my professional life to studying the euro. I wrote my doctoral thesis on the interplay between national politics and the euro, and this year I signed a contract to publish a version of it with Routledge. For these and other reasons, I paid the not-so-economical fee to change the date of my flight, flew to Rome on Saturday July the 4th, and then Athens on Sunday July the 5th. To give a sense of the importance of the referendum, the pilot on my Aegean flight to Athens announced the results of the first exit polls which showed that OXI was in the lead. In all my decades of regularly flying across North America and Europe, and more recently around the Middle East, I have never heard a pilot announce, with barely disguised glee in his voice, the results of a referendum.
When I arrived in Athens, it was 8:40 pm, and although the final results were not yet in, already at that time there was a sense that there was little chance that the Yes side would win, and I knew that the party would be starting at Syntagma square. And so rather than going right to my hotel to drop of my luggage and shower after a long day of travel from Toronto to Rome, and then to Athens, and despite feeling tired, hungry, sweaty and with luggage in tow, I went to Syntagma. As the train approached the station, more and more Greeks entered the metro with Greek flags; I knew that they were going to the party too. When we reached Syntagma station, the trains emptied, and immediately one could hear the chanting and singing from the crowds outside. As the phalanx of people walked up the stairs towards the exit, there was a burst of spontaneous chanting of "OXI, OXI, OXI". It was electrifying, and when I exited the station and entered the square, I became part of a huge crowd of Greeks, many with Greek flags and huge grins on their faces, celebrating the momentous event that just transpired.
After bathing in this intoxicating atmosphere for about an hour, I decided I would go to my hotel, check in, drop off my luggage, and then return to the square. But to my surprise, I could not find a cab! I noticed that other tourists also could not find one, and that I was jostling with them to get any cab that would pass by. I found a guy, and he said to me, "no service", and I thought, "is this a sign that economic activity is collapsing?" After walking for about 30 minutes, passing by deserted and decaying streets and buses full of soldiers who were there to quash any signs of civil conflict, I found a cabbie who did not seem to speak a word of English, but luckily he spoke some Italian. When I told him that I was Italian, he immediately put his hand on his heart to signal his affection, which I found comforting and also not surprising, since I have traveled to Athens before and am well aware of the close historical, cultural, and personal ties between Greeks and Italians. He took me to my hotel, and the concierge informed me that he would like me to pay cash (I am booked at the hotel for a week). This was a visible sign of the financial crisis--with a collapsing banking system, credit cards become harder to use. I tried to negotiate--the euros in cash I had were needed to last the 10 days I would be in Greece, and using them to pay for my hotel would be problematic. We reached a compromise--I paid half in cash, and half with the credit card, and he proceeded to check me in.
After that I walked the 2 kilometer distance from my hotel to to Syntagma, and the huge crowds were still there. After eating delicious suvlaki that I purchased for only 1.50 euros, I participated in the celebrations, and the general sense of happiness and joy was contagious. I bought a flag, which I enthusiastically waved while periodically chanting OXI OXI OXI with the crowd. There were many from other European countries, especially Spain, Portugal, and Italy, and I even saw a man of Asian decent (perhaps Chinese), with a huge flag of Syriza (the current government), wearing a shirt with OXI written all over it, and enthusiastically participating. It is amazing, I thought, that even people of non-European origin are here participating in the celebration and expressing their solidarity with the Greek people. It was exciting and fun and I wanted to stay there all night, but although I am still a sprightly 37, I began to feel tired at about 1:30 AM. I subsequently went to my hotel to get some rest.
***************************
.
The triumph of yesterday's referendum is already beginning to fade (I am writing this section the next day), in part because Greece's deep seated problems cannot be solved by a vote, although of course the outcome of yesterday's poll will certainly strengthen Tsipras's hand in the coming negotiations. Today I walked around Athens and spoke to many locals, and the reality here is quite depressing. The first thing one notices is the long lineups at ATM machines. Those waiting often have an expression of worry and frustration on their faces, perhaps because they know that at any moment, the ATM might run out of cash, and their waiting will have been in vain and they will have to look for another one; what a total waste of time! Another notable feature of the landscape here in Athens is that most of the shops are out of business. When I came to Athens in 2012, even then it seemed like a huge number of shops--are least a quarter--were not running. Now, that ratio seems to have been reversed: it looks like the majority are closed and only a quarter are open for business, and even these are mostly empty. This is a visible sign of an economic catastrophe that usually happens during a major conflict or war. All those closed and empty shops are the visible side of real flesh and blood people who cannot afford goods that many take for granted; they are the concrete manifestations of a generation of youth with few job prospects and who have little hope of ever having a normal life which includes a job and a family.
One therefore understands the rage that people feel, but there are no simple solutions that will magically create a level of economic activity that will be sufficient to reverse this degree of economic devastation. Even if Tsipras gets a better deal from its creditors, Greece will still have huge debts that will make it difficult to implement an expansionary fiscal policy. It will need huge investments in employment-generating productive activity, but it will be difficult to convince investors that Greece, in its current condition, represents a profitable bet. And then there is the euro, that currency that most sensible people now regret. Can Greece escape its economic predicament in a currency union where the rules are determined by the most powerful countries? This might--and I want to emphasize might--be possible if Europe had a real political and fiscal union that allowed the transfer of resources from rich to poor countries. In that scenario, Greece's recession would be offset by transfers that would preserve its standard of living, which is exactly what happens in normal currency unions like Canada and the US. But the odds of that happening in Europe are next to nill, and so what we will probably see is continuing crises punctuated by brief periods of stability.
Stay tuned for more commentary in the coming days.
I was originally booked to arrive in Rome on July 19th, and I had planned on coming to Athens shortly after that date. Tsipras's announcement of a referendum on July 5th changed that itinerary. I knew it would be an event of historical importance, and that I could not miss it, not only because of my sympathy and affection for Greece, but also because I have devoted most of my professional life to studying the euro. I wrote my doctoral thesis on the interplay between national politics and the euro, and this year I signed a contract to publish a version of it with Routledge. For these and other reasons, I paid the not-so-economical fee to change the date of my flight, flew to Rome on Saturday July the 4th, and then Athens on Sunday July the 5th. To give a sense of the importance of the referendum, the pilot on my Aegean flight to Athens announced the results of the first exit polls which showed that OXI was in the lead. In all my decades of regularly flying across North America and Europe, and more recently around the Middle East, I have never heard a pilot announce, with barely disguised glee in his voice, the results of a referendum.
When I arrived in Athens, it was 8:40 pm, and although the final results were not yet in, already at that time there was a sense that there was little chance that the Yes side would win, and I knew that the party would be starting at Syntagma square. And so rather than going right to my hotel to drop of my luggage and shower after a long day of travel from Toronto to Rome, and then to Athens, and despite feeling tired, hungry, sweaty and with luggage in tow, I went to Syntagma. As the train approached the station, more and more Greeks entered the metro with Greek flags; I knew that they were going to the party too. When we reached Syntagma station, the trains emptied, and immediately one could hear the chanting and singing from the crowds outside. As the phalanx of people walked up the stairs towards the exit, there was a burst of spontaneous chanting of "OXI, OXI, OXI". It was electrifying, and when I exited the station and entered the square, I became part of a huge crowd of Greeks, many with Greek flags and huge grins on their faces, celebrating the momentous event that just transpired.
After bathing in this intoxicating atmosphere for about an hour, I decided I would go to my hotel, check in, drop off my luggage, and then return to the square. But to my surprise, I could not find a cab! I noticed that other tourists also could not find one, and that I was jostling with them to get any cab that would pass by. I found a guy, and he said to me, "no service", and I thought, "is this a sign that economic activity is collapsing?" After walking for about 30 minutes, passing by deserted and decaying streets and buses full of soldiers who were there to quash any signs of civil conflict, I found a cabbie who did not seem to speak a word of English, but luckily he spoke some Italian. When I told him that I was Italian, he immediately put his hand on his heart to signal his affection, which I found comforting and also not surprising, since I have traveled to Athens before and am well aware of the close historical, cultural, and personal ties between Greeks and Italians. He took me to my hotel, and the concierge informed me that he would like me to pay cash (I am booked at the hotel for a week). This was a visible sign of the financial crisis--with a collapsing banking system, credit cards become harder to use. I tried to negotiate--the euros in cash I had were needed to last the 10 days I would be in Greece, and using them to pay for my hotel would be problematic. We reached a compromise--I paid half in cash, and half with the credit card, and he proceeded to check me in.
After that I walked the 2 kilometer distance from my hotel to to Syntagma, and the huge crowds were still there. After eating delicious suvlaki that I purchased for only 1.50 euros, I participated in the celebrations, and the general sense of happiness and joy was contagious. I bought a flag, which I enthusiastically waved while periodically chanting OXI OXI OXI with the crowd. There were many from other European countries, especially Spain, Portugal, and Italy, and I even saw a man of Asian decent (perhaps Chinese), with a huge flag of Syriza (the current government), wearing a shirt with OXI written all over it, and enthusiastically participating. It is amazing, I thought, that even people of non-European origin are here participating in the celebration and expressing their solidarity with the Greek people. It was exciting and fun and I wanted to stay there all night, but although I am still a sprightly 37, I began to feel tired at about 1:30 AM. I subsequently went to my hotel to get some rest.
***************************
.
The triumph of yesterday's referendum is already beginning to fade (I am writing this section the next day), in part because Greece's deep seated problems cannot be solved by a vote, although of course the outcome of yesterday's poll will certainly strengthen Tsipras's hand in the coming negotiations. Today I walked around Athens and spoke to many locals, and the reality here is quite depressing. The first thing one notices is the long lineups at ATM machines. Those waiting often have an expression of worry and frustration on their faces, perhaps because they know that at any moment, the ATM might run out of cash, and their waiting will have been in vain and they will have to look for another one; what a total waste of time! Another notable feature of the landscape here in Athens is that most of the shops are out of business. When I came to Athens in 2012, even then it seemed like a huge number of shops--are least a quarter--were not running. Now, that ratio seems to have been reversed: it looks like the majority are closed and only a quarter are open for business, and even these are mostly empty. This is a visible sign of an economic catastrophe that usually happens during a major conflict or war. All those closed and empty shops are the visible side of real flesh and blood people who cannot afford goods that many take for granted; they are the concrete manifestations of a generation of youth with few job prospects and who have little hope of ever having a normal life which includes a job and a family.
One therefore understands the rage that people feel, but there are no simple solutions that will magically create a level of economic activity that will be sufficient to reverse this degree of economic devastation. Even if Tsipras gets a better deal from its creditors, Greece will still have huge debts that will make it difficult to implement an expansionary fiscal policy. It will need huge investments in employment-generating productive activity, but it will be difficult to convince investors that Greece, in its current condition, represents a profitable bet. And then there is the euro, that currency that most sensible people now regret. Can Greece escape its economic predicament in a currency union where the rules are determined by the most powerful countries? This might--and I want to emphasize might--be possible if Europe had a real political and fiscal union that allowed the transfer of resources from rich to poor countries. In that scenario, Greece's recession would be offset by transfers that would preserve its standard of living, which is exactly what happens in normal currency unions like Canada and the US. But the odds of that happening in Europe are next to nill, and so what we will probably see is continuing crises punctuated by brief periods of stability.
Stay tuned for more commentary in the coming days.
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