Episode 636: Yes Or No : Planet Money What do you do when your country's future is put in your hands? On today's show: The referendum in Greece.
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Episode 636: Yes Or No

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Episode 636: Yes Or No

Episode 636: Yes Or No

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A few nights ago, Dmitrios Tzeranis was at home in Athens, Greece. He was sitting on his couch, watching TV with his little baby daughter.

DMITRIOS TZERANIS: I have a 10-day-old baby, so I was trying to feed the baby and get it to sleep, and I was watching the "Beverly Hills Cop" on the TV.


EDDIE MURPHY: (As Axel Foley) You're not going to fall for the banana in the tailpipe?

TZERANIS: Suddenly, the movie stopped and the prime minister appeared to give a speech - you know, a formal speech to the nation.



GOLDSTEIN: There, on Dmitrios ' TV was Prime Minister Alexis Tsipras - 40-year-old guy, suit, no tie. There was a Greek flag on his right and a European flag on his left.

TZERANIS: I almost got a heart attack, to be honest.


TSIPRAS: (Speaking foreign language).

GOLDSTEIN: Tsipras said, quote, "Greek citizens, for the last six months, the Greek government has been waging a battle under conditions of unprecedented economic asphyxiation."


What he's referring to is that for months he had been trying to renegotiate a bailout that goes back to 2010. Greece needed money, Europe was saying, we'll lend you that money but you have to do exactly what we're saying. The Europeans wanted more spending cuts from Greece. Tsipras did not like that proposal. Negotiations had broken down.

GOLDSTEIN: But, rather than reject the European proposal, Tsipras was trying something different. He was turning the matter over to the people of Greece.

TZERANIS: I don't think people were expecting this.

GOLDSTEIN: Nobody was expecting this. Tsipras was calling a referendum. On July 5, just a few days from now, there will be a nationwide vote. Things are in flux right now in Greece, we're not entirely sure if this vote is going to happen or not, but as of now, it's on. And Tsipras is asking all of the people of Greece - the people feeding their babies, the people watching the old Eddie Murphy movies. He's asking them, should we accept the Europeans' offer? Yes or no?


SMITH: Hello, and welcome to PLANET MONEY. I'm Robert Smith.

GOLDSTEIN: And I'm Jacob Goldstein. Today on the show - what do you do when the future of your country is put in your hands - when you've been asked to choose between two options that could send your country down very, very different paths?


UNIDENTIFIED WOMAN: Support for this podcast comes from Scion. Scion has teamed up with the founders of Kickstarter, Threadless, Sprinkles Cupcakes and more for the Scion Motivatour, a program dedicated to entrepreneurs. Episodes and event information can be found on scion.com/motivatour. That's M-O-T-I-V-A-T-O-U-R.


SMITH: OK, put yourself in Dmitrios' place. On a normal election, you go into the voting booth, you put an X next to your preferred political party, the candidates you like, and you're done. But the Greek vote on Sunday will require a little bit of background reading. You got to do your homework. I have the text here on the referendum ballot, and it says - here, you want to read it, Jacob?

GOLDSTEIN: Yeah. It says, should the draft agreement, submitted by the European Commission, the European Central Bank and the International Monetary Fund on - let's see, what's it say - June 25, 2015, that consists of two parts, be accepted? So, short version - should something something be accepted? And then there's two boxes - yes, no.

SMITH: I love that it has two parts that you have to review and the two documents got confusing immediately because there had been so many drafts, so many documents. Which version, exactly, were people supposed to vote on?

GOLDSTEIN: Yeah, I'm pretty sure we found the right one. It's 10 pages long...

SMITH: (Laughter) I can't believe - 10 pages long.

GOLDSTEIN: ...And it's, you know, all these details like you would expect about, like, what is their VAT tax going to be and are there going to be subsidies for diesel oil for farmers? I mean, it's this very wonky thing to sort of put to a vote of the people.

SMITH: But it really boils down to the Europeans want the Greeks to raise taxes and cut spending - basically generate more money themselves so they need less money from Europe. So, what this was truly asking - yes or no - is should Greece continue on this same path that it's been for the last five years?

GOLDSTEIN: And people like Dmitrios, the guy we talked to who was watching "Beverly Hills Cop" with his baby - you know, he hears this, and he looks around, and it's pretty clear that this path Greece has been on has not been going well.

SMITH: Dmitrios is a research scientist. He works at a university. But like a lot of professionals in Greece, he doesn't always get paid regularly. In fact, last year, there were all these budget cuts at the university. A lot of professors and people got fired, and the remaining workers at the school went on strike. This is life in Greece now. They effectively shut down the school.

TZERANIS: During many months, I could not enter the university and do my job.

GOLDSTEIN: For months. For months.

TZERANIS: For months, yeah. I had to hide. I'd go in at night or hide in the bushes and go from bush to bush, and try to enter the building and...

GOLDSTEIN: Wait, for real? You were actually hiding in the bushes to try and get to work?

TZERANIS: It happened a couple of times, yeah.

GOLDSTEIN: Things like this were happening all over Greece. Basically, what Greece has been going through for the last two years is a Great Depression. Retirees had their pensions cut. Unemployment went up to 25 percent and stayed there. People have gotten kicked out of their homes.

TZERANIS: I've never seen a homeless person in Athens before 2003. I didn't recall a homeless person. I first saw a homeless person in Boston or New York.

SMITH: Do you see homeless people now?

TZERANIS: Yes, yes. I mean, I see people looking for food in garbage trucks sometimes. Sometimes you feel that these people - 10 years ago they had a normal life or five years ago they had a normal life, and then suddenly the economy collapsed, and many people lost their job or lost their family, and the state did not enough to help them.

SMITH: It did not seem like things could get worse in Greece, and then they did get worse right after that speech that Tsipras gave calling for the referendum.

TZERANIS: There was no movie after the speech because everybody got crazy, and all channels start showing news and start showing people going to ATMs to get money out.

GOLDSTEIN: This was a bank run, so the government shut down the banks, said people could only get 60 euros a day out of the ATMs. The government, itself, ran out of money this week - they missed a payment to the IMF, the International Monetary Fund.

SMITH: And imagine, this situation is now on the shoulders of Greek voters. They have to choose the best way out of this mess, if there is a way out of this mess.

GOLDSTEIN: And when you look at what has happened in Greece over the past few years, you can see why people would vote no...

SMITH: Sure.

GOLDSTEIN: ...On this referendum, why they would reject these European demands - say, you know, I don't want people in my country eating out of garbage trucks anymore. I want to take a different direction. I'm going to vote no.

SMITH: No seems like the right choice until you consider what might happen the day after a no-vote.

JACOB FUNK KIRKEGAARD: The first thing that, in my opinion, will happen is that the Greek banks are unlikely to ever reopen.

SMITH: This is Jacob Funk Kirkegaard, an economist with the Peterson Institute. He is normally a sunny, optimistic guy, but when he contemplates this scenario, he says, look, it could be terrible. The banks in Greece cannot open without an infusion of money, and the only place to get that money is from the European Central Bank, and if Greeks vote no on the referendum, the ECB will say, OK, you say no to us, then no money for you.

GOLDSTEIN: And then, Kirkegaard says, things get even worse after that. He figures Greece will probably get kicked out of the euro entirely. And people say, OK, they get kicked out of the euro? Greece just goes back to its old currency, the drachma.

KIRKEGAARD: Greece - even if they try to implement a new drachma, I think they will fail because they will not have the administrative capacity and the political credibility to successfully introduce a new currency.

GOLDSTEIN: Kirkegaard says when a country with a devastated economy like Greece's tries to roll out a new currency, it almost always ends in disaster. It leads to hyperinflation. It leads to economic collapse.

KIRKEGAARD: It is the worst of all worlds, unfortunately.

SMITH: OK. So a no-vote equals the worst of all worlds. So how about a yes-vote?

GOLDSTEIN: Yes-vote.

SMITH: OK, approve the European deal, stay in the euro, the bailout continues. How about that?

GOLDSTEIN: Hi, it's Jacob Goldstein.

DAVID BLANCHFLOWER: So, let's talk about the - what the implications of yes are.

GOLDSTEIN: Wow, I love it.


GOLDSTEIN: I didn't even ask a question yet.

BLANCHFLOWER: (Laughter) There you go.

GOLDSTEIN: This is David Blanchflower. He's an economist at Dartmouth, and he worked for the Bank of England during the financial crisis. He says if we wake up next Monday morning and the Greeks have voted yes - yes on this referendum, yes to Europe - he says we know what that's going to look like, and it's not pretty.

BLANCHFLOWER: Pensions fall, tax rates rise, the firms that exist now start to close, the unemployment rate rises further, output drops further than it's done before, and we clearly now have entered the death spiral.

SMITH: OK, so from David Blanchflower, a yes-vote equals death spiral.

GOLDSTEIN: OK, so, quick recap, the choice the Greek people have been given - a yes-vote...

BLANCHFLOWER: The death spiral.

GOLDSTEIN: ...Or a no-vote.

KIRKEGAARD: The worst of all worlds.

GOLDSTEIN: That's what they got. Those are their options.

SMITH: It's like that game I used to play when I was a kid. You know, we all used to play this kid - would you rather. You know, you'd pick two terrible things. Would you rather drink from a puddle on the sidewalk or lick a toilet? Would you rather get punched in the face or kicked in the gut? This, apparently, is not a game that they play in Greece.

TZERANIS: That's an American game? (Laughter).

SMITH: (Laughter) It's an American game, yeah.

TZERANIS: All right.

SMITH: Do you - is there version of that in Greece or no? You ever heard of that game?

TZERANIS: And when you answer, somebody punched you actually?

SMITH: Maybe, maybe.


SMITH: Sometimes it was theoretical, you know.

TZERANIS: OK, interesting.

GOLDSTEIN: Now there are a few kind of long shot hopes for Greece. It's not entirely grim, right? Under a yes vote, the hope is Greece actually does improve its economy, becomes more competitive, the economy grows, the government gets better collecting taxes. And, in fact, at the end of last year, not that long ago, Greece's economy had started growing again. The government's budget deficit was in pretty good shape. So, you know, maybe - maybe a yes-vote means Greece can get back to that.

SMITH: OK, there is also a long shot hope for the no vote, too. Remember the no vote, where you get kicked out of the euro and it's economic devastation? Well, the hope is that leaving the euro and going back to having its own currency, the drachma, would be good for Greece in the long, long run. So, with Greece on the euro, if you take a vacation in Athens, it is expensive. It's like going to Paris or Berlin or another one of the cities in the eurozone. Now, if Greece had its own currency, it would end up being much cheaper for tourists to visit Greece, and that could mean more tourists. Tourism's a huge part of the economy. So, in the long run, after all that economic pain, maybe this could help grow Greece.

GOLDSTEIN: All right.

SMITH: All right, let's do this.

GOLDSTEIN: Bottom line - this is a referendum.


GOLDSTEIN: How to vote - yes or no?

SMITH: We called up some people in Greece this week, and they were, as you might expect, extremely confused by the details of all of this. They didn't know exactly what they were voting on, they couldn't sort of play out the economic consequences of this, and, frankly, one woman we talked to was pretty angry that the government had put this complicated decision on her instead of just handling it themselves.

GOLDSTEIN: And, you know, all of that, frankly, I would've guessed probably if I'd thought about it. But there was something that everybody we talked to said that I would not have thought of that was really surprising and really interesting to me. And that was, the people we talked to in Greece don't see this just as an economic choice. They see it, really, as something bigger and something deeper. They see this vote as a vote on their identity - on the identity of Greece as a nation. They see this as a referendum on Greece's place inside or outside of Europe.

SMITH: So we did a little bit of random dialing into Athens, finding people who could speak English. Here's Aliki Atagnosti (ph), a 29-year-old interpreter.

ALIKI ATAGNOSTI: Leaving the eurozone means leaving Europe altogether.

SMITH: And that feels bad?

ATAGNOSTI: Of course (laughter). We are a part of Europe - an essential part of Europe.

SMITH: We also reached Maria Effe Mitropoloup (ph). She's a middle school teacher.

MARIA EFFE MITROPOLOUP: I don't feel safe outside Europe, to be honest. I think that countries around the world - or especially small countries like mine - they cannot just exist outside of coalitions or unions like the European Union.

SMITH: Dmitrios, the scientist with the little baby - he actually told us the same thing.

TZERANIS: I don't see any future for the country outside Europe. We don't produce enough. We're not mature enough. And we live in a dangerous neighborhood.

SMITH: So, does that mean that, to you, voting no in the referendum is like voting no to Europe?

TZERANIS: To Europe, yes, absolutely. I believe that. I believe that.

SMITH: After Dmitrios said this, I went to a map of Europe and really looked at Greece and realized what he was talking about. You know, Greece - we don't think about this very often - Greece isn't actually connected to the other countries using the euro. Its neighbors are Albania and Macedonia and Turkey. Across the water are Syria and North Africa. Russia is not too far away. It is, as he said, a dangerous neighborhood.

GOLDSTEIN: And so, you know, part of what Dmitrios and the other people we talked to are thinking about is, like, do I want to be, sort of, in this club on a team with, you know, France and Germany and Denmark or do I want to be out here on our own, you know, as Greece, a small country in this unstable part of the world?

SMITH: It's like being out on a cliff. It's like being close to being pushed off the continent of Europe. Dmitrios told us he is voting yes. He wants to make sure that Greece stays with the rest of Europe, no matter what happens.

GOLDSTEIN: The other people we talked to - they were torn. They told us they didn't know how they're going to vote.


SMITH: Let us know what you thought of today's episode. You can email us - planetmoney@npr.org - or tweet us @planetmoney. Our episode today was produced by Nadia Wilson.

GOLDSTEIN: With a bunch of help from the rest of the PLANET MONEY team. Also, NPR recommends that you listen to Alt.Latino. It's a music show with everything from tropical music from Peru to Mexican folk rhythms to electronica. You can find Alt.Latino at npr.org and on the NPR One app.

SMITH: One other thing to promote - a live show called Tape Fest. Tape Fest is a one night only event with live performances and storytelling from some of your favorite radio and podcast producers like Andrea Silenzi of Why Oh Why? and Nate Dimeo from The Memory Palace and you, Jacob Goldstein and David Kestenbaum.

GOLDSTEIN: Yeah, Kestenbaum and I are going to be there. It's July 26 at The Bell House in Brooklyn. You can find more information at tapefest.org. I'm Jacob Goldstein.

SMITH: And I'm Robert Smith. Thanks for listening.

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