As the rest of us are getting into the groove of late summer evenings and barbecues, the Greek economy is quickly going through the shredder. The last two weeks saw the country’s debt crises go from yellow to blazing red. What happens now that the Greek people said “No” to fiscal austerity? More importantly, what effect does it have it on our clients with investments in Greece and the EU?
The “No” vote is a bad sign. The Greek people are heavily dependent on their government and the stronger Eurozone countries. Such a heavy dependence on others reflects poorly on productivity, work ethic and one’s outlook on life. It is a pessimistic view of one’s own abilities and a vote for socialism. This has been the Greek mentality for decades, and has not been working well. The Greek economy itself is not significant. The significance of Greece is its impact on the other Eurozone countries. If Greece exits, will other countries follow? If Greece is bailed out, does Europe become a sovereign welfare union?
The vast majority of our clients have exited Greece over the past several years. Many are now giving their EU investments second thoughts. Europe’s reaction to the Greek austerity vote will be very telling of what Europe will look like in the coming decades. Stay tuned.
Klueger & Stein, LLP works with many clients with investments in the Eurozone and is keeping a close eye on the situation in Greece.