Despite the announcement of another massive bailout fund for the troubled Greeks, the eurogloom that has permeated the continent for the past year or so shows no sign of abating. Though there is increasing evidence that Brussels wants Greece out, an eye-opening on-the-ground report from Megan Greene (h/t Marginal Revolution) suggests that leaving the Eurozone is the furthest things from the minds of Greek voters:
Despite the clear sense of despair and anger in Greece, politicians and members of the public continue to think that the alternative—default and EZ exit—would be even worse. A top official from New Democracy, the most popular party according to recent opinion polls and the party likely to lead a coalition government following upcoming elections in April, waxed at length about how much trouble Greece would be in if it exited the EZ. He highlighted that Greece has few export industries it could rely on to grow its way out of the crisis even if it devalued its currency. He conceded there is tourism, but argued that any profits from shipping are kept out of the country and green energy is still but a mere pipe dream as an export industry for Greece. Given that Greece is not self-sustaining in agriculture, he suggested that a devaluation accompanied by hyperinflation would result in a starving population, and that the resulting civil unrest would destabilize the entire Balkan region. These arguments were reiterated by Pasok politicians I met, as well as by representatives from prime minister Papademos’ office.
This sets up a difficult situation for other Euro members to deal with. Greeks are chafing against the demands imposed by the IMF, European Commission, and European Central Bank, and may lack the will or ability to comply. On the other hand, they remain dead-set against a Eurozone exit, as the Germans seem to be hoping for, meaning that Greece may continue to remain a headache to the Eurozone for the foreseeable future, especially if they keep responding to German demands with the usual mix of creative stalling and strategic incompetence.The Germans, aware of Greek concerns about the difficulties of returning to the drachma, have been talking about assisting Greece with the transition so that the worst-case scenarios don’t come to pass. Via Meadia can’t make up its mind whether it would be cheaper for the Germans to help the Greeks leave or to keep bailing them out, but it looks as if Greek national pride, a formidable force, is coming down on the side of fighting to stay in the club.Whatever happens, the whole post is well worth reading to get a sense of the state of play on the ground in Greece.