By: Allie Estremera
On Tuesday July 7, 2015, World Affairs Council-Washington, DC hosted a Foreign Policy Panel event, “Greek Financial Crisis and Referendum: Another Step Closer to the Grexit?” On July 5th, 2015, the Greek government held a referendum on whether the country would accept the bailout terms provided by its creditors. 61 percent of Greeks voted against the austerity plan that would also provide Greece with some debt relief in the form of cash payments to the Greek Central banks. The program addressed the future of Greece and the EU, but the most pressing issue of the night was what a “Grexit” would mean for the EU? The panelists were: Dr. Theodore C. Kariotis, a professor of economics for the University System of Maryland, and Dr. Constanze Stelzenmüller, the inaugural Robert Bosch senior fellow with the Center on the United States and Europe at the Brookings Institution. The program was moderated by John Greenwald, a partner at Cassidy Levy Kent and WAC-DC Board Member.
Mr. Greenwald opened the discussion with a quick summary of the events leading up to the Greek referendum. He began with the entry of Greece into the Eurozone in 2001. Then he detailed the rise of the far-left Syriza Party led by Prime Minister Alexis Tsipras, who ran on the platform of keeping Greece in the Eurozone but with an ease on austerity measures. Greenwald concluded his opening statements with the some statistics on the referendum on Sunday, July 5th.When asked to what degree Tsipras and the current government is responsible for the structural problems of Greece, Dr. Kariotis argued that a majority of the people in the Greek government are amateurs, additionally stating that Alexis Tsipras never held a real job and that he is a professional politician. Dr. Stelzenmüller argued that the only way to achieve a viable compromise between Greece and its creditors is for each side to make concessions that are painful to them, stating that Greece blames Germany for not reacting flexibly with austerity measures and the Germans feeling as if they are holding the ship together.
Additionally, Stelzenmüller explained the justification for strict austerity measures: the vulnerability of a small economy is the vulnerability of all. Therefore austerity would lead to a better functioning Europe. The panelists also discussed their opinions on what they believed were major security threats to Greece if it were to exit the EU. Kariotis stated that Russia is a major threat to the country and that the “present government is in love with Putin”, while Stelzenmüller argued China that would be the real threat to Greece. Kariotis, a native to Greece, and Stelzenmüller, a native of Germany, provided the audience with their honest and unique perspectives of the future of Greece in the Eurozone and what a “Grexit” would mean. This program was recorded for broadcast at a later date on the Council’s television show World Affairs TODAY.