What Keeps Greece in the Euro?

A Greek drachma coin

Will the Greeks say Yes or will they say No? When the prospect of a referendum on the Greek government’s austerity measures was raised, alarm bells rang across the markets. The reaction was swift. Still, before wagering it all on the outcome of the vote, it’s worth considering exactly what question will be asked in the poll and what might influence the answer Greeks give.

Greece lived under a dictatorship known as the Regime of the Colonels from 1967 to 1974. In 1975 the country began building a parliamentary democracy and asked to join what would become the EU. Europe was being transformed by new post-World War II relationships and Greece was going to be part of that. Greece joined the bloc in 1981 and struggled to modernize its economy, aided by massive European subsidies, and later struggled to join the euro, aided by the creative accounting that eventually sparked the country’s debt crisis.

Greece has been part of the EU, of which the euro has become an integral part, for thirty years. Greeks retiring this year were in their 20s when the military junta was ousted. They have spent their whole lives in a country aspiring to be defined by its EU membership rather than by its neighbors, Turkey and the Balkans, and their historical conflicts.

The question in the Greek referendum, which will be set by the government, may well play on this. The poll probably won’t offer a choice between austerity or no austerity, but will force a choice between the European identity most Greeks of working age cherish, or banishment from what they consider the modernizing force of the EU.

Depending on the wording, we may well see the Greek electorate backing Prime Minister George Papandreou rather than ticking the No box.

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