Greeks smashing windows and setting fire to shops and banks in a fury of opposition to yet more austerity is gripping. But it is hardly unique. A few years ago there were similar scenes for weeks after police shot a 15-year old schoolboy. And back when I lived there, U.S. President Bill Clinton was treated to a similar welcome — mainly because of his military assault on Serbia (a fellow Christian Orthodox nation) during the Kosovo conflict.
There are doubtless degrees. The latest level of destruction was the worst since widespread riots in 2008 — and austerity being imposed on Greeks is very painful. But it is worth noting that there are two underlying elements than make such uprisings more common in Greece than elsewhere.
One of the more bizarre aspects of the euro zone crisis is that the currency in question — the euro — has actually not had that bad a year, certainly against the dollar. Even with Greece on the brink and Italy sending ripples of fear across financial markets, the single currency is still up 1.4 percent against the greenback for the year to date.
There are lots of reasons for this. The dollar is subject to its country’s own debt crisis, negligible interest rates and various forms of quantitative easing money printing — all of which weaken FX demand. There is also some evidence that euro investors are bring their money home, as the super-low yields on 10-year German bonds attest.
It seems as if almost everyone was surprised by Prime Minister George Papandreou‘s decision to hold a referendum on the euro zone’s bailout package for his country. At the very least, it can probably be said that he is weary of being hammered from all sides — his own party, the opposition, the people on the street, Germany, the tabloid press, you name it.
A lot will obviously depend on what question is asked. Do you want an end to austerity, would get a clear yes vote. Do you want to leave the euro zone — perhaps not.