With Greece Facing Economic Abyss, What Will EU Leaders Do?

Jul 7, 2015
Originally published on July 7, 2015 6:40 pm
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DAVID GREENE, HOST:

We are following the story that is unfolding in Greece, where European patience is being tested and so is the ability of Greek citizens to withstand an economic collapse. Even getting money out of ATMs is becoming near-impossible in some places with banks closed. And the big question looming over everything is whether Greece will be forced off the euro. That's something Greeks' prime minister says he does not want. NPR's Chris Arnold is in Athens, and he joins us on the line. Chris, good morning.

CHRIS ARNOLD, BYLINE: Good morning, David.

GREENE: So it is appearing now, after this vote over the weekend when Greek voters rejected this latest bailout plan, that, I mean, this country is really teetering on the edge of an even worse financial disaster. What happens now?

ARNOLD: A big part of it is what's Germany going to do next? Germany's the most powerful economy in Europe. It's been the driving force behind this austerity that many Greeks feel has been crushing their economy. And more and more economists are sort of agreeing with the Greeks lately and saying this approach of raising taxes a lot for Greek people and on the tourism industry, cutting pensions for a lot of Greeks across the country, at the same time insisting on these billion dollar debt repayments - that all this is making it very hard for the Greek economy to recover. And just one example of that - unemployment went from 12 percent or so in 2010 - it's now risen to above 25 percent. And this is people actively out there looking for work. Twenty-five percent of the country can't find a job. So people on the street here are asking what kind of bailout is that? This just isn't working. I spoke with Spirou Christos. He's a merchant at a local fish market in Athens.

SPIROU CHRISTOS: (Through interpreter) He says that he's not against Europe overall. He's against Germans and against Schauble because he thinks that austerity measures were measures that made Greece an experiment for them.

ARNOLD: Now, a couple things there that are interesting, I think - first, the average person on the street in Athens knows the German finance minister's name.

GREENE: Yeah, he just brought up the name Wolfgang Schauble like, I mean, it was on the tip of his tongue. I mean, this is a German official who's really been tough on Greece.

ARNOLD: Right, I mean, in Greece, he's become a kind of Darth Vader figure because he's been pushing for this austerity. There are evil looking posters of him on - at bus stops. And there's also this notion that Germany is experimenting on Greece, trying to figure out, OK, how much austerity can Greece survive? And some of that makes sense. I mean, look, there's other economies that are in trouble in Europe - Spain, for example - and Germany doesn't want to end up bankrolling half of Europe. But the no vote here was both a rebuke and a plea for help saying look, it's just too much austerity. We can't survive this. You need to let our economy recover.

GREENE: OK, so what happens now, Chris? I mean, you've got Greek's prime minister, Alexis Tsipras, who called for Greeks to go out on - in this vote and reject this latest bailout plan? What is his next move here?

ARNOLD: Well, he's already made one move, which is to have his finance minister step down, and this was a kind of combative guy. There was a lot of bad blood, so that's an olive branch, if we can use that example with regard to Greece. In terms of specifics, it's unclear, but certainly, he's going to want more time to pay back the loans and the bailout money that Greece has gotten from Europe. The economy here is just too squeezed. He argues it's just very tough to do that right now.

GREENE: But with the tough line that Germany has taken, I mean, how much patience is left when it comes to Germany and other European countries?

ARNOLD: Well, the leaders of France and Germany both spoke about this yesterday. They said the door is open to negotiation. France's Francois Hollande seemed a little softer, talked about a long-term solution. Germany's Angela Merkel, who's a little more stern, said look, the previous offer was already generous so, you know, who knows? We'll just have to see what sort of deal they can work out. But this big public referendum from the people of Greece - you would think it would put some pressure for some more concessions.

GREENE: All right, that's NPR's Chris Arnold reporting on the latest from the Greek capital, Athens. Chris, thanks very much.

ARNOLD: You're welcome. Transcript provided by NPR, Copyright NPR.