Why the Greek Will Never Opt to Leave the EU
Much has been made about the renewed fear of Greece abandoning the European Union in the past few weeks. International media is awash with alarm that the Greek people have had enough with austerity and will vote in a new crop of leaders, who in turn will let international agreements fall by the way side, effecting Greece's exit from the EU in the process.
I believe that will never happen, and I will summarize some overlooked reasons below.
I lived in Southeastern Europe till high school graduation, in a country that for decades has been working hard into securing EU membership. EU membership is held in extremely high esteem in the region, which includes Greece. It allows free cross-border movement and employment for citizens. If a Greek citizen has a hard time finding employment in Greece, she can move to a better labor market for her skill set, like Germany, for example. Should Greece revert to a non-EU-member status, this same citizen would at most carry a Schengen-approved passport, which would enable visits to EU countries for up to three months, but not any kind of employment. I do not think Greeks are about to consent to becoming second-class denizens of the Euro zone.
Another reason is the Greek economy, whose primary output is tourism. In a reality where Greece is no longer a EU-member - with EU-grade law and order - how much of their lure will the Aegean and Adriatic beaches lose? Not to mention the added customs cost of either getting into Greece, or importing supplies to serve tourists.
But the most fundamental reason why the Greek will never consent to any moves that even remotely hint at a EU exit rests deep below the economic superficialities. Greece is still a participant to centuries-old disputes on national grounds with several of its neighbors. The most popular, but not the only dispute by far is the one with Macedonia over the naming of the latter. Greece has made good use of the veto power it holds when it comes to the acceptance of new EU members to keep out countries such as Macedonia. With a Greece that is not a European member, such power of negotiations in the national pride tug of war are all gone.
That does not end there. Greece has had a long-standing practice to offer foreign nationals with Greek extraction in their genealogy a Greek passport as well as Euro-denominated pensions, which has enabled the country to maintain a Greek demographic wherever these recipients are. As pensions become a thing of the past, the only incentive for a non-Greek-born national to have a Greek passport is the EU employment opportunities it opens. Without this, Greece is likely to lose an important demographic footing it has been holding on to, at very great cost, over many years. (It is a cost that has come home to roost.)
Greeks are a very proud nation and that holds true down to the individual citizen. They are slowly getting used to the new normal - just like Americans learned to accept the normalcy of a $4 gallon of gasoline. And they will continue to want to hold on to that sacred European membership. At any cost.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.