The Greek electorate voted to endure the harsh austerity measures imposed on them by their more prosperous currency partners, and those of us who celebrated Fathers’ Day with one eye on the news wires breathed a collective sigh of relief. The Greek dog didn’t bite—at least it didn’t bite global securities markets as deeply as it might have.
A coalition government composed of the first- and third-place finishers—the same two Greek political parties that misgoverned the beleaguered country into today’s mess—somehow seemed a better alternative to most stakeholders than backing the second-place finisher, the renegade Syriza party. Syriza promised to renege on the bailout/austerity plans already agreed to by previous governments, which essentially dared the rest of Europe to watch as Greece stopped paying its bills or began to pay those bills in a currency manufactured in Athens, rather than in Frankfurt.
There were those who argued that a big bang “Grexit” was exactly the shock the system needed to begin to right itself. Presumably, those voices didn’t belong to folks whose euro-denominated invoices were likely to be repaid in severely devalued drachmas. Greek voters apparently agreed and voted for the devils they know, and the rest of us returned to our bar-b-ques. But should we have?
While I agree that a Greek vote to cut itself off from European and International Monetary Fund (IMF) funding would have been foolhardy, I also recognize that continuing to do the same thing and expecting different results is the definition of insanity. A part of the discussion has turned from austerity toward growth—constructively so—because sustainable fiscal conditions will demand both fiscal discipline and increased resources to meet existing obligations. But, I can’t imagine conditions under which growth accelerates fast enough to prevent another Greek default and deepening problems in the larger peripheral economies. Something has to give.
The something that can do the most good and the least damage is, I’ll say it again, more Europe, not less. Sovereignty is precious, especially if you hold a position of governmental power, but treaties, wars and royal marriages have shifted European boundaries before, and economic necessity could cause similar shifts to occur again. The question now is: What human and financial cost before we get there?
 The Economist, “Germany and the future of the euro (1); Is Grexit good for the euro?,” June 16, 2012 http://www.economist.com/blogs/charlemagne/2012/06/germany-and-future-euro-1