Greeks Scramble for Cash as Financial Crisis Comes to a Head
Fourteen years ago, Greece entered the Eurozone by using a Trojan Horse: It doctored its finances to make them appear more stable than they actually were. For a run of a few years, the country let its finances go. The party ended during the Great Recession as the country needed bailout after bailout to keep the partial-archipelago afloat. Now, the piper must be paid. But instead of tightening belts and making the tough decisions to get out of debt and onto firm footing, the Greeks elected the Syriza Party to power because it promised that it would lessen the burden of debt by resisting the demands for reform and negotiating further with the nation’s creditors. But those talks with the creditors broke down over the weekend and Greece may be booted from the Eurozone. On hearing the news, Greeks started lining up at ATMs, withdrawing as much money as they could before the cash ran out. In response, Greece started capital controls, keeping banks closed this week. “Appeasing Syriza’s demands could spread political contagion to Spain, Portugal and other countries that might think they too can avoid reform and still be rescued,” writes The Wall Street Journal editorial board. “A last-minute reprieve is possible, but if not the Greeks will have committed suicide by ignoring economic reality. Voters in Europe, Japan and the U.S., take note.” As we watch the slow-motion crash of Greece, we should remember that this nation has a growing debt that is being made larger by growing entitlement spending. Someday, the piper must be paid here, too.