2011 was a very difficult year for Greece. In our conversations with unsuspecting full-blooded Americans, we, as Greek-Americans, went from our normal boasting about our beautiful beaches and delicious food to trying to defend the indefensible economic and political circus taking place in the land of our ancestors we all feel so much affection for. Between ourselves, we kept wondering how this tiny country that comprises less than 3% of Eurozone GDP could have possibly thrown the global financial system into a tailspin and had shaken the very foundations of the European experiment.
On TV, we would see a never-ending series comprised of the interchangeable reels of CNBC commentators making jokes about paying back debts in drachmas, young unemployed Greeks throwing Molotov cocktails at the Greek police, and European politicians talking about resolving the crisis by announcing half-measures one after the other.
Unfortunately, we know that there are no fairytale scenarios for Greece. The bill has finally come due for the ever-expanding twin deficits the country had run since the 1980s and the de-facto economic expansion via massive sovereign borrowing. I am not sure what 2012 is going to bring but after the European Summit of Dec. 9, it seems that Greece and the rest of the peripheral European countries have two choices: a) sacrifice national sovereignty in exchange for continued support from European Institutions (i.e. Germany) or b) abandon the euro, declare bankruptcy, devalue the currency, and enter a prolonged period of self-imposed self-sufficiency, banned from global financial and debt markets, ala Argentina 2001.
Now, one could argue that the latter option would be better for Greece, if only one had faith that the political and economic elite of the country could successfully lead the country into a new era. However, I am afraid that the last 37 years are live testimony to a remarkable combination of incompetence and corruption that this very elite has shown. There is no catalyst to make me believe that any of this will change if Greece were to return to the drachma.
Greece is therefore obliged to choose the former of the two difficult options. Make no mistake about it: that option comes with 5-10 years of internal devaluation and a lower standard of living for all Greeks. It comes hand in hand with constant EU and IMF supervision, never-ending austerity measures, persistently high unemployment, potential social unrest, and (as the Dec. 9 summit made clear) a surrender of national sovereignty.
Thus, the question we have to ask is how much national sovereignty shall Greece need to sacrifice in exchange for the next installment of the bailout package? What is the price that Greece’s creditor nations will ask in exchange for keeping it solvent while it is getting its fiscal house in order?
We don’t know the answer to that question but we do know that both the Greek government and the Greek diaspora will need to work toward the goal of preventing any territorial or other national security compromise that Greece might need to make in order to remain solvent.
2011 was clearly the year in which the national security interest of Greece became very tightly linked to its failed economic model and the irresponsible policies of the past. 2012 should be the year in which there is better communication between the Greek-American community and the Greek government.
On the one hand, the Greek government should listen to the concerns and ideas of the Greek-American community and take them seriously. The attraction of capable people should not stop in flying Prime Minister Lucas Papademos from Harvard to “Megaro Maximou.” There is a lot of talent that fled Greece and came to the United States during the last 30 years due to the political and bureaucratic institutions that literally strangled the most productive elements of society and left them no choice but to seek safe harbors elsewhere. Greece can use and should tap the knowledge, connections, and advice of that very talent, directly or indirectly. There should finally be an honest and consistent effort on behalf of the Greek government to collaborate with its own diaspora within a long-term win-win framework, Israel-style (or even China-style). This collaboration can result in a faster turnaround of the economic situation in Greece and therefore fewer compromises for the living standards and national interests of the country.
On the other hand, the Greek-American community should re-focus its efforts to reflect the new reality for Greece and the Eastern Mediterranean. Lobbying for the religious freedoms of Christians in Turkey, calling for justice in Cyprus, and other efforts should continue. However, we, as Greek-Americans, need to realize that military and political stability in the region cannot be achieved without a strong Greece, internally. With Turkey growing economically in leaps and bounds and the rest of the Balkan nations following in its footsteps, the balance of the power equation is shifting dramatically. Greece, at the mercy of creditors, might be forced sooner or later to make a diplomatic compromise that those very creditors have been trying to achieve and would not otherwise do so if Greece were not under their financial yoke. The Greek-American community should realize that the best way to protect both Cyprus and the Ecumenical Patriarchate is to strengthen Greece itself and that should be the number one priority for the community’s lobbying efforts in 2012 and beyond.
*Alex Mizan is the director of the American Hellenic Council