Sinsuat, Bai Johara Irynna B.

PS325/ TTh 7:40-9:10

Greece Debt Crisis: Bailout Referendum

Yes. If given the choice to vote in the international bailout referendum in Greece, I would go for yes to
Europe. The Eurozone is composed of 19 countries that chose to give up their own currencies and instead went
for a single currency, the Euro. Although taking the yes side would mean agreeing to the budget cuts and
austerity measures, saying yes to the bailout funds greatly exhibits an approval for Greece to stay in the
Eurozone. The policies may not be able to fully revive the Greek economy but atleast, they would be able to
ensure that the International Monetary Fund (IMF) and the members of the Eurozone could still become
creditors that Greece could call on to and loan from. The provision of the European Central Bank (ECB) of
emergency financings to Greece also depends on the approval of the member countries.
Prime Minister Alexis Tsipras of Greece, from the left-wing Syriza party, has been calling people to
vote for a no in the referendum for the reason that it could strengthen their leverage in the negotiating table.
But then, the act of rejecting the bailout terms presented by the ECB and IMF is tantamount to saying that
Greece does not want to be a part of the Eurozone anymore, an event that is termed as the Grexit, the exit of
Greece from the Euro. This might lead to a change in the government and to a return of the Greek currency to
drachma, which would be very disadvantageous. The value of the peoples money would decrease while prices
are going up. A Grexit would also cut off the funding from the ECB, and Greece would default on its debts.
Although the possibility of printing its own currency could become effective for Greece, financial analysts are
saying that it would be much better for Greece to not default on its debts. Instead, it must agree with a new
financing deal, and stay in the Eurozone.
A yes for Europe vote would be more advantageous for the Greek people in that it could guarantee the
furtherance of its political and economic ties with the members of the Eurozone, which are the primary creditors
of Greece, together with the IMF. A no to austerity vote, on the contrary, signals a change in the government
and currency, and the possibility of a Grexit, which would sever Greeces link with other Eurozone countries.

Sources:
http://money.cnn.com/2015/07/04/news/economy/greece-crisis-101/index.html?iid=hp-stack-intl
http://www.telegraph.co.uk/news/worldnews/europe/greece/11719317/What-happens-next-after-the-No-votein-the-Greece-referendum.html
http://www.ibtimes.com/greek-referendum-2015-what-does-yes-or-no-vote-mean-greeces-debt-crisis-1995189
http://www.nytimes.com/2015/07/08/business/international/greece-debt-eurozone-meeting.html?_r=0