Counterparties: Greece votes

June 15, 2012

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On Sunday Greece will hold yet another election, which is being widely portrayed as a referendum on whether it will stay in the euro zone – even if, among the main political parties, only the communists want to ditch the euro. The resurgent leftist Syriza party, which has vowed to reject the euro zone’s crippling bailout requirements, is the strongest opponent of the conservative, pro-bailout New Democracy party.

As the election nears, reports from the field in Greece are getting increasingly grim. The WSJ spoke to one writer whose friends are “hiding money in jars, under the bed, even burying it in the mountains” in the event of post-election chaos. This is more rational than it seems: In just one year unemployment is up 57%. Greece’s healthcare system is barely hanging on, as underfunded and understaffed hospitals struggle; some Greek diabetics have been unable to get insulin. Late last year, Greek suicides were found to have increased by 40% over the same period in 2010.

What can we expect to happen on Sunday? FT Alphaville has some concise answers (to the extent that answers exist). We won’t learn anything definitive about Greece’s membership in the euro zone on Sunday; expect an unclear result, which could open the door to a new government coalition that will try to keep Greece in the euro. Nearly 80% of Greeks, polls show, want to remain in the euro zone.

For cultural background on Greece’s crisis, turn to Nikos Konstandaras’s brutally frank, must-read NYT op-ed. Konstandaras, a top Greek journalist, holds out little hope for any of his country’s fractious political parties. A recent study, he writes, suggests that 7 out of 10 Greeks between the ages of 18 and 24 hope to leave their country for a better economic climate. This social catastrophe, which he likens to the fall of Constantinople, was at least partially self-inflicted:

What I want to remember from Greece in 2012 is how laziness and years of intellectual sloppiness can waste the gift of freedom and leave open the gates of the city – how we allowed our leaders to pander to us until we had no one capable of leading us, no one next to us at the barricades.

– Ryan McCarthy

On to today’s links:

EU Mess
The EU smiled while Spain’s banks cooked their books – Bloomberg
The man named international stock picker of the decade is betting $1 billion on European banks – Fortune

Why newspapers were doomed all along – Harvard Business Review

“The most interesting question in this whole saga is why they didn’t just lend those funds out” – FT Alphaville

What Obama could accomplish in a second term, as “cooperative idealism gives way to hard-nosed realism” – New Yorker

Data Points
Facebook knows your country’s “gross national happiness” – Technology Review

Consider Yourself Warned
The human impact of America’s latest drug hysteria, bath salts – Spin
Drug panics, bath salts, and face-eating zombies – Jack Shafer

Calling all Japanese college students with economic insights: The IMF is launching an essay contest – IMF

Right On
The Obama administration will stop deporting younger undocumented immigrants – Huffington Post

A map of NYC rappers’ neighborhoods of origin – Very Small Array

Old Normal
“The willingness of homeowners to carry housing debt has been radically altered” – Bloomberg


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