The Eurozone was spared an exit from Greece after a bail-out deal was reached this week, but the long-term viability of the economic union remains in question.
Eurozone leaders have been meeting for months to discuss ways in which Greece can repay its massive debts, but the Greek people have been resistant to previous proposals, which called for more austerity measures than they have already endured. Some Greeks had gone so far as to call for their country to leave the Eurozone altogether, a move dubbed the “Grexit.”
When it appeared that main parties would not be able to reach a deal, there was speculation that the Grexit might result in the collapse of the Eurozone. Germany, in particular, faced criticism for what was seen by many as being inflexible in its demands, and suggesting Greece be removed from Eurozone.
The Financial Times described Germany’s behavior as “brinksmanship” that challenged the Eurozone’s cohesion. Wolfgang Schäuble, Germany’s hardline finance minister, may have had supporters when he threatened to pursue a Grexit option, but Austrian chancellor Werner Faymann was among those Eurozone leaders who took a softer approach.
“Such humiliation cannot be,” Faymann said.
French President François Hollande was also among those who felt the Grexit option was bad for the Eurozone.
“There was in Germany a rather strong pressure for a Grexit,” Hollande said. “I rejected that solution… Greece didn’t seek charity but solidarity from the Eurozone.”
Although not a major player in the Greek bailout negotiations and not technically a member of the Eurozone, Britain’s Prime Minister David Cameron offered praise for the deal, and the Telegraph quoted him as saying Eurozone stability was important to his country.
“I think this deal gives that sort of stability a chance, but I think there is still a long way to go to put in to place all the things that has been agreed,” Cameron said.
Euronews reports that the deal approved by the Eurozone leaders offers Greece nearly 20 billion euros (more than 20 billion U.S. dollars) over the next month. The total for the bailout will loan Greece 86 billion euros. In exchange, Greece must privatize public assets, reform its pension system, and increase its tax revenues. Compliance with the terms will be monitored by the European Central Bank, Eurozone finance ministers, and the International Monetary Fund.
Despite the infusion of much-needed cash, some Greeks feel that they are giving up too much of their national autonomy to the stronger members of the Eurozone. The Twitter hashtag #thisisacoup sprang up in Greece, and throughout the Eurozone, as the terms of the deal were announced.
On the streets of Athens, people took to the streets to vent their frustrations at Eurozone leaders. Some, like Athens resident Sandra Demertzis, likened Eurozone finance ministers to criminals who had no real interest in helping the Greek people restore their economy.
“It’s a catastrophic agreement, but I expected it because within the Eurozone there was no way we could ever get anywhere,” Demertzis said. “They are gangsters, they are financial murderers. There was no way.”
[Photo by Christopher Furlong/Getty Images]