Korea should help Greece recover

This Greek tragedy doesn’t seem to have an end. It may have been wishful thinking to have expected a fix differing from the rigid austerity measures imposed on Asian economies during the downturn of the late 1990s.

But a crisis of this magnitude stemming from such overblown debt will not be easy to resolve. The European Union, European Central Bank and International Monetary Fund gave Greece an ultimatum to adopt fresh austerity measures before receiving a new bailout. They demanded a 22 percent cut in the benchmark minimum wage and the firing of 150,000 public sector employees by 2015. Similar demands had been made of President Kim Young-sam and then-presidential candidates Kim Dae-jung and Lee Hoi-chang in late 1997.

Despite violent protests that set dozens of buildings in Athens on fire, the Greek government did the right thing and passed the measure - 199 lawmakers in favor, 74 against and 27 abstentions. Labor unions went on strike, and the police union, with jobs on the line, joined the movement. Members of the coalition government resigned, and the political strain is likely to continue until the April election. The opposition is saying Germany is stomping on Greek pride and sovereignty. But without a German-led second bailout worth 130 billion euros ($172 billion), Greece will inevitably have to default on its 14.5 billion euros worth of debt that matures next month. It could be suicidal to leave the euro zone as the membership is what has kept the economy afloat until now. Although a difficult decision, passing the measures was the right move.

If Greece defaults, people will lose their savings as well as their pensions. If they don’t want to lose it all, they must be willing to lose some. No financial rescue is possible without painful sacrifice. The EU must now be more aggressive in its will to rescue troubled members. The contagion could knock over other ailing states like Portugal, Spain and Italy, and jeopardize the entire euro zone.

Asian economies emerged from the late-1990s crisis because other larger economies like the United States, China and Europe were relatively strong at the time. But Europe stands in a different climate. The U.S. and Japanese economies are struggling, and the Chinese economy has lost some steam. The Korean economy would inevitably take a blow if Greece sinks. The international community must show concerted efforts to help Greece. Korea is not immune, and local politicians must not take the crisis lightly.