Kostas Kourtikakis, a political scientist and UIUC visiting lecturer, discusses the causes and effects of Greece's debt crisis. He also talks about possible future defaults in other eurozone nations and urges Americans to take note of Europe's complex financial system. The full interview is posted below, or you can read it here.
Protesters clashed with police in the streets of Athens during the last week of June as the Greek Parliament debated and then passed a set of deeply unpopular austerity measures required for the nation to receive aid and avoid defaulting on its debt. What brought on the crises, and how much does it threaten the 27-nation European Union and the world economy? Political scientist Kostas Kourtikakis, a native of Greece and visiting lecturer at the University of Illinois, is an expert on the EU and its institutions, as well as on the politics of Greece and the region. Kourtikakis [pronounced kor-tee-KAH-kihs] was interviewed by News Bureau social sciences editor Craig Chamberlain.
How did Greece get in this economic mess?After Greece adopted the euro in 2002, successive governments were unable – many say unwilling – to implement economic reforms, which were necessary for the Greek economy to become competitive. At the same time, their membership in the eurozone (the 17 EU nations using the euro currency) allowed Greece to borrow money with a super low interest rate. The result was a budget with too many expenses and not enough revenue. Then, after markets took notice of the Greek debt problem in October 2009 and the fear of default emerged, other eurozone members, especially France and Germany, did not act swiftly enough to contain the crisis.
Why have Greek citizens reacted so angrily to the austerity program now approved by their government?When the first austerity measures were introduced in 2010, Greeks accepted them as necessary for avoiding default. In my opinion, two things have happened since then that have caused anger. First, there is a widespread perception in the middle and working classes that they are disproportionately burdened with austerity, because they are easier targets for tax hikes and benefit cuts. At the same time, rich elites, which for many years have engaged in rampant tax evasion, remain untouched by the measures.
The second and more serious reason is that trust between citizens and political elites – the foundation of representative democracy – seems to have seriously eroded. Greek citizens have always suspected that some of their elected representatives were corrupt and untrustworthy, but the crisis has led to a blanket assessment that all politicians are basically liars. Despite all this, most demonstrators were in fact peaceful. Some of the most severe incidents we saw on TV were caused by a minority of extremist youths, a long-time tradition in Greek demonstrations.