Post-Referendum Diary of Athens

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When Greek Prime Minister Alexis Tsipras called a referendum on whether to accept austerity conditions being offered by the country’s creditors, both Francois Holland and Angela Merkel said that a victory of the No side would mean exclusion from the euro. Most pundits interpreted those words as a meaningful threat because France and Germany are Europe’s leaders, and their preferences usually determine the major policies of the EU. After the resounding victory of the No side on Sunday July 5th, Greece is still in the euro, although barely. Its banks are closed, its citizens can only withdrawal 60 euros a day from ATM's, and economic activity has taken a nose dive, with consumer spending down 70% and tourist bookings down 40% during the high season, when the industry is usually at its peak.

Running out of cash in Athens

 The hardship that the country has experienced, not only recently but in the last six years, is visible in many neighborhoods—shuttered windows, abandoned or crumbling buildings, graffiti-strewn walls, closed shops, and homeless people seem to be ubiquitous. But even people who on first appearance seem to be doing well, after a bit of probing, reveal themselves to be struggling. Typical is a man I befriended at the University of Athens, where he works precariously as an administrator. In the past two years, his pay has been cut 25%, and for five months he was placed on “availability”, which means being laid off while continuing to receive 25% of his paycheck. He is now expecting another 25% pay cut, on what has become a 900 euro a month salary, and he will have to live on that while sustaining an unemployed wife and nine year old child. Despite this hardship, he wants to Greece to stay in the euro.

Even though many credible sources said that a victory of the No side would mean being ejected from the currency, my friend voted No in the referendum. This reflects a strange and contradictory mix of sentiment that is widespread here: people recognize that the euro has brought hardship, but they are unwilling to give it up. The reason is the currency has extra-monetary meanings: exclusion from the euro would be perceived as being kicked out of Europe. This belief is often accepted uncritically; people are seemingly unable to imagine plausible alternatives, such as leaving the euro while staying in the EU, or even the possibility of prospering outside the euro.

Speaking to many locals one also gets the sense that Greeks are divided across many lines. One major division is between those who voted No and those who voted Yes on Sunday’s referendum. At the celebrations on Sunday July 5th, when thousands of people who voted No gathered at Syntagma square, I noticed that the crowd was composed mainly of youth, and the older folks present seemed to be mostly from the working class. Not coincidentally, these are the groups that have borne the brunt of the crisis. There were some radicals with Che Guevara T-Shirts, but they were a tiny minority. On Thursday July 9^th, I attended a pro-euro rally composed mainly of those who voted Yes in the referendum. Walking around, observing, and talking to participants one could not help but notice the significant differences between them and the crowd that voted No. The Yes crowd was mainly older. They also showed signs of being socioeconomic and cultural elites. There were many botoxed women with designer outfits, and many clean-shaven men wearing dapper suits and shiny shoes. These are the classes—not coincidentally—that still have a lot to lose if Greece leaves the euro.

But their attitudes cannot be reduced to concerns about economic losses; for them, the symbolic value of the euro is equally, or even more, important. One well-to-do woman I spoke to said that outside the euro, “Greece would become Pakistan”. For her, the euro is a symbol of European and Western identity, and the incarnation of "modernity", while exclusion would mean being part of the third world. I asked her why she felt that way even though in the past six years Greece’s euro membership has coincided with a high degree of economic decline. She replied that had the country been outside the euro, it would have been even worse. She also told me that Europe itself would not survive Grexit because "Greece is the origin of European civilization" (many others voiced this to me, highlighting that the belief is widely held). As the demonstration gathered momentum, the crowd chanted  “Greece, Europe, Democracy”. The association between those three elements is not surprising, since many here feel that Europe is the guarantor of Greece's fragile democracy.

Here in Athens I also sense that there is a strange mix of anxiety and resignation. People fear what will happen if the country leaves the currency union and hope that it does not even while there is a belief that sooner or later, it could transpire. These tensions and anxieties are being expressed everywhere. The euro, and Greece’s place in Europe, dominate conversation on TV, on the street, in bars and cafes, and many people have strong feelings about the subject. The debate is largely divided on the basis of class lines: those with something to lose are arguing vociferously that Greece must remain in the euro, while those who have borne the brunt of the crisis are upset at the austerity measures that have caused them so much grief. This latter group is willing to gamble Greece’s euro membership by demanding an end to austerity and a reduction of Greece’s mountainous debt even if the price of such inflexible demands is Grexit.

It looks like this latter group will be very disappointed in the coming days, because Tsipras has presented a proposal to creditors that would include 12 billion euros worth of austerity over the next few years in exchange for a third bailout, and evidently this is much more than the 8 billion euros in tax rises and spending cuts that the creditors were offering before the referendum was called. If a deal is made on the basis of this proposal, it will make a mockery of Sunday’s referendum, which supposedly was a signal that the majority of Greeks were no longer willing to accept more austerity. It would also mean much more of the same policy of the last 6 years that has brought the country to its knees: bailing out a bankrupt state with austerity conditions that worsen the economy and that only makes the state even more bankrupt which then creates the need for another bailout, all while Greece's economic decline continues. Even worse is the humiliation and loss of dignity that comes from the basic fact that elections don’t really matter, since whoever is elected will ultimately cave in to the demands of creditors in exchange for more bailout money. This is something that seems to have escaped the crowd that was chanting “Greece, Europe, Democracy” at the pro-euro demonstration on Thursday.