Understanding the Greek Debt Crisis

Since all of my husband’s family lives in Greece, people occasionally ask me how they’re doing and what’s really going on there.  Our relatives are struggling to various degrees; some family units retain as much as 75% of their former income, while in others, both adults are unemployed.  A close friend is expecting his taxi to be impounded any day because his partner hasn’t been paying his share of taxes.  There’s very little work for the taxi anyway.  That same friend is fortunate to own his Athens apartment, but he can’t afford to heat it.  Lots of people are parking their cars and turning in the license plates, which makes it harder than ever to find a parking place if you’re still driving around.

Here are a couple of news stories that are helpful if you want to understand the background.  This Daily Telegraph article explains events of the last couple of years, and this story from This American Life traces the current troubles back to the time Greece joined the Eurozone.  Together, they give a pretty complete picture.

The people we talk to in Greece don’t know what to hope for any more.  If, as so many economists believe, default is going to happen anyway, does Greece benefit from postponing it?  They don’t want to return to the drachma, but austerity measures are constricting the economy so much that staying in the Eurozone is losing its advantages.  “There is no more Greek economy,” said my brother-in-law a couple of weeks ago.  For now, they endure without much hope for the future.