- Posted June 16, 2012 by
This iReport is part of an assignment:
Eye On Europe - June 16th - Greece, France, Egypt Votes
This weekend Greeks will go to the polls once again to choose a path for the embattled nation. The choice is continued austerity and membership in the Euro Zone or possibly rejection of austerity which may lead to unceremonious expulsion from the EZ. What happens in Greece may impact not just Europe, but reverberate around the world.
There are other issues as well. The French choose a new parliament which can either give great power to the new President or move the nation in a different direction. Meanwhile changing continents, a contentious election for president is also taking place in Egypt, which is once more taking to the streets.
The Greek Wars:
As Sunday's Greek elections approach, there's a rising consensus and concern that the plebiscite could prove to be a Lehman Brothers moment for Europe. That is to say, if the hard-left bailout-denouncing Syriza party wins, it could set off a cataclysm in the markets, a chain reaction that would set neighbors and then the whole world on fire.
So is it September 2008 all over again?
In one sense, it's an apt analogy. In the summer of 2008, the powers that be thought that, after a series of frustrating and partial bailouts of the financial sector, letting a large, leveraged entity default on its debts would have limited impact.
The impact of a Greek default, or of a Greek exit from the Euro, wouldn't simply fall on Greece and the folks to whom the government owes money. It would fall on markets, companies and institutions, near and far, that are connected to Greece, in some cases tangentially. A Greek default would almost certainly cause Cyprus to seek a huge bailout, for example. Implode a warehouse sitting in an open field and you can be reasonably sure there will be little collateral damage. Knock over a skyscraper in the middle of a densely populated area, filled with buildings, infrastructure and utilities, and you have no idea what will happen. Greece, as small as it is, and as isolated as it has become, stands in the middle of a densely populated area.
In early May, voters didn't give either of Greece's two most established parties a majority, crippling the country's ability to form a government. This weekend's vote may end the stalemate. Greeks want it to happen sooner than later, as the debt crisis threatens the stability of the European Union's single currency.
Polls have suggested a narrow victory for a radical leftist party that wants to tear up an international loan agreement which forced the government to make deep budget cuts. Alexis Tsipras, the leader of the Syriza party, has equated austerity with hell.
The bottom line: What happens in Greece will not stay in Greece. American leaders should pay attention for their own sake, say analysts.
"If Greece exits the euro, it won't be alone. Others will exit," said Paul Donovan, a global economist with UBS bank.
"There would be bank runs across multiple countries," he predicted recently. "Citigroup, for example, may not be exposed to Greece, but it may be exposed to Portugal, Spain, France. ... It may be exposed to a company that's exposed to France or exposed to exports to EU."
Greek Health Prognosis - On Life Support:
Greece's rundown state hospitals are cutting off vital drugs, limiting non-urgent operations and rationing even basic medical materials for exhausted doctors as a combination of economic crisis and political stalemate strangle health funding.
With Greece now in its fifth year of deep recession, trapped under Europe's biggest public debt burden and dependent on international help to keep paying its bills, the effects are starting to bite deeply into vital services.
"It's a matter of life and death for us," said Persefoni Mitta, head of the Cancer Patients' Association, recounting the dozens of calls she gets a day from Greeks needing pricey, hard-to-find cancer drugs. "Why are they depriving us of life?"
Much attention was paid to Socialist Party candidate Francois Hollande's presidential victory in May. That's why this weekend's legislative election is crucial. In order for Hollande to meet his goals, he needs similarly aligned lawmakers to win seats.
What happens during the legislative election will be a "good bellwether of exactly how divided the country is," (CNN's Jim) Bitterman said. "Hollande says he's going to try to bring people together and that Sarkozy was a divisive force."
There's going to be great focus on the controversial National Front party, which could affect how votes are divided, and because the party has a history of anti-Semitism and racism in France.
Former British Prime Minister Gordon Brown Warns:
Gordon Brown has warned that France and Italy may need to be bailed out like Spain because of the unfolding eurozone crisis.
The former UK prime minister said it was not only Greece, Portugal and Ireland facing the threat of euro exit.
But, he added, some of the EU's largest countries such as France, Spain and Italy were also at risk.Mr Brown also warned that Germany might have to seek additional funding to safeguard its banks.
In a stark warning ahead of next week's G20 summit in Los Cabos, Mexico, Mr Brown said: "The euro area is finally approaching its own day of reckoning."
Along the Nile:
On Saturday and Sunday, Egyptians are expected to choose between two leading presidential candidates: Muslim Brotherhood member Mohamed Morsi and Ahmed Shafiq, a former air force general and civil aviation official who served under Hosni Mubarak as prime minister. Some have argued that the choice is really between two tyrannical men who are unlikely to bring about the kind of change protesters demanded in 2011 during the historic uprising in Cairo's Tahrir Square.
The contest itself has become just one part of an increasingly chaotic political landscape. On Thursday, Egypt's highest court declared the parliament invalid, and the country's interim military rulers promptly claimed full legislative authority. Those rulers, the Supreme Council of the Armed Forces, have been in control of the country since Mubarak's ouster. They said they'd announce a 100-person assembly that will write the country's new constitution by Friday.
From the Cornfield, while most of the world will be watching Greece, we cannot ignore the parliamentary elections in France, nor the plebescite in Egypt. To ignore any of these 3 elections could catch the US of A off guard and not see from where the next economic tsunami is coming.