From the point of view of an American living in Europe, I find the Greek bailout a little perplexing. Reading the New York Times this morning, I came across Floyd Norris’ commentary entitled: “Why Not Give the Greeks Their Say?” It seems to me that asking for help should be an exercise in humility, not arrogance. Greece couldn’t keep their budget off the brink of bankruptcy. And in response to help and tremendous leniency on the part of the creditors, the referendum – although an excellent exercise in Democracy – is a slap in the face to the taxpayers whose money makes up the bailout fund. Should we take this deal or leave the Euro? Either way the European taxpayer gets the short-end of the short-term stick. They either pay the additional bailout funds and lose half their money, or Greece leaves the Union and European taxpayers lose 100% of their money. I’m leaning myself toward a smaller Europe, even if I did spend a lovely month on my honeymoon in Greece. Having had a heated debate just a few nights ago with some European friends, I felt compelled to reply to Mr. Norris’ article. Here’s my comment:
In his commentary, “Why Not Give Greeks Their Say?,” Mr. Norris judges Europe rather harshly. Where do you think the bailout money comes from, Mr. Norris? The bailout fund is comprised of European tax Euros. As an American living in Europe, I can tell you other Europeans are not interested in this period of financial crisis in giving billions of Euros to a country that isn’t convinced it should pay it back. If Greece was to have a referendum, then it had to be done before a single cent more was handed over. There was no undue severity on part of European leaders. Should the rest of Europe loan such enormous sums with no strings attached? Does that make good political sense for the other European countries? Of course not. I applaud Sarkozy and Merkel for standing up for the taxpayer. No bank should (before the subprime crisis I would have written would) give a loan (bailout funds) to an entity (Greece) with no collateral, no conditions, no procedure in place in case of default. Have we learned nothing from the 2008 crisis? The powers that run Europe are right to put a heavy hand on Greece. Greece got themselves into a financial pickle; they asked for help, they were given that help; they defaulted on repayment, asked for more help; they were given that help too. And now are we really debating whether the Greek citizens should have a say in whether they are content paying back the debt? In what world is it fair to the hard-working Europeans whose own countries are indebting themselves to bail out Greece (yet again)? If Greece prefers not to take the deal, it may be best for all involved if it left Europe. Or perhaps it would be best if Greece simply took responsibility for their financial situation and stopped trying to find a way around their obligations. After all, there was referendum for the rest of Europe as to whether they thought the bailout was a good use of their tax “dollars”.