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A Greek University of Saskatchewan professor worries the country’s continuing economic crisis could tear apart its social order, and possibly herald the breakup of the European Union.
Jason Zorbas said he’s been in contact with family in Greece following a weekend ‘no’ vote on whether to accept cuts and tax hikes demanded by the country’s creditors.
Although the 60-40 split in favour of the ‘no’ side was a wider margin than expected, Zorgas said it’s clear people there remain split. Whatever their divisions, Zorbas said the crisis can’t continue to drag on.
“This whole thing is just uncertainty piled on uncertainty. And that of course is one of the worst things for any kind of financial market. Markets hate uncertainty,” he said.
With the country set to run out of euro banknotes within days, Zorbas said the EU will either have to ship more cash, or see Greece leave the euro and print its own currency.
“There’s no resolution that’s good for Greece. It’s just bad news or bad news and it’s about picking your poison,” he said.
With few historical precedents to point to, Zorbas said a Greek exit from the euro followed by a default on its debts could ruin the country., but it could also spark a turnaround. He said that’s what’s driven European leaders to sink billions of euros into propping Greece up.
“If Greece defaults and instead of it going really bad, it goes really good, that sends a message to places like Spain and Italy and some of the other countries that have huge debt that ‘hey, maybe leaving the euro isn’t such a bad idea,” he said.
And if other EU members leave the currency, Zorbas said it’s not out of the question they could quit the EU altogether.
“That’s why everyone is so obsessed about Greece, because what if this is the snowflake that starts the avalanche?” he said.
With conditions inside the country continuing to deteriorate, Zorbas said he’s also concerned about the direction the country’s internal politics might take. He said the current government is already an example of what desperate people will vote for.
“The current left-wing party is a collection of various far-left, Marxist parties,” he said.
With massive unemployment and many not even getting enough to eat, Zorbas said there’s always the spectre that even worse alternatives could come to power.
“There’s a neo-Nazi party in Greece… and they’re getting votes. It’s terrifying,” he said.
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