You’ve probably heard about the debt crisis in Greece. You’ve probably heard about the referendum and how the Greek people voted to reject the terms being pushed onto them by the Eurogroup. You’ve probably heard people speculating as to whether Greece will be forced out of the Eurozone. However there are several important variables in this crisis that most people aren’t talking about.
So what’s next?
In the short term, Greece is headed for some rough waters no matter how the negotiations proceed from here. The Greek banking system will not be able to function without outside help, and outside help hinges upon an agreement with creditors, who don’t seem very eager to compromise at this point. The banking situation is already interfering with imports and exports. This in itself will have consequences if a deal is not reached quickly.
If chaos follows, there will be a fierce battle to control the narrative. The rhetoric from the Eurogroup is predictable. At each phase of the crisis they have insisted that the solution to the problems created by the E.U. is to move towards full political and financial integration. In other words: they screwed up because you didn’t give them enough power. Where have we heard that before?