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Greece voting 'No' to austerity is EU's biggest test since fall of the Berlin Wall

Published 06/07/2015

People celebrate in Athens on July 5, 2015 after the first exit-polls of the Greek referendum. Over 60 percent of Greeks rejected further austerity dictated by the country's EU-IMF creditors in a referendum, results from 20 percent of polling stations showed. AFP PHOTO / LOUISA GOULIAMAKILOUISA GOULIAMAKI/AFP/Getty Images
People celebrate in Athens on July 5, 2015 after the first exit-polls of the Greek referendum. Over 60 percent of Greeks rejected further austerity dictated by the country's EU-IMF creditors in a referendum, results from 20 percent of polling stations showed. AFP PHOTO / LOUISA GOULIAMAKILOUISA GOULIAMAKI/AFP/Getty Images

The coming week brings the biggest test to Europe's leaders since the fall of the Berlin Wall in November 1989. After Greek voters' 'No' in an extraordinary referendum, all eyes are on European Central Bank governor Mario Draghi.

The immediate ECB decisions on funding for Greek banks can effectively decide whether or not there is an early exit of Greece from the 19 nations of the EU which make up the Eurozone.

But all the events since 2008, not least in relation to Greece, have again underlined that the creation of the euro was essentially a political project, decided upon by the democratically-elected leaders of the European Union member states. The accompanying economic union, necessary to sustain a huge multi-nation currency union, was at kindest estimate a work in progress.

For the past week, all the signals from Brussels and the other key EU capitals have been that a 'No' vote yesterday would trigger a Greek exit from the Eurozone. Such a move has the potential to change the very nature of the common EU currency, in which Ireland has participated since it was launched on international money markets in January 1999.

If Greece leaves the euro, it changes from an irreversible currency union to a fixed exchange system which member states can exit and enter with more alacrity. Thus, a world currency up there with the dollar and yen becomes vulnerable to profound market instability with knock-on effects for all in the interlinked global economy.

Signals from Brussels last night were that the EU and Eurozone leaders will, from today, begin a series of crisis meetings designed to frame their next moves. The Irish Government must play a strong part as one of the smaller states in which its people made big sacrifices to play their part in the survival and stability of the euro.

The decisions taken by EU leaders in the coming 72 hours will affect all our lives, and impact profoundly on Ireland's hopes of regaining prosperity. It is clear that the Greek government will return to Brussels in a more strident mood seeking better terms. Whether the country stays with or leaves the euro, it will require considerable support.

All sides involved need a humility and reality check.

Irish Independent

Irish Independent

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