The Greek elections` impact on Korean households

Stocks in Asia rose after the Greek election results came out Monday morning. Asian markets welcomed the victory of the pro-austerity, center-right New Democratic party before European stock markets opened. Korea’s benchmark index KOSPI surpassed 1,900 and the won appreciated against the U.S. dollar. Had the anti-bailout and leftist party Syriza won, the result would have been the opposite. If Korean stock prices and the won`s value plummet, uncertainty would have spread far and wide and the Korean people’s livelihood would have been seriously affected.

Since Korea is a small open economy that is dependent on exports, the country is quite sensitive to global events. Given its large trade volume with China, the country`s largest export destination, and the European Union, Korea could take a huge hit if the recession in Europe affects China. At a time when both Korean exports and imports have declined, a bad economy could significantly affect the presidential election in December.

Fortunately, however, the Greek people opted for the center-right party, which promised economic reform, instead of the radical leftist party. Some say the Greeks, who used to be swayed by demagogic politicians from the time of the Peloponnesian War to World War II, made a rare but wise decision. The conservative party`s leader Antonis Samaras also opposed reform in the first bailout. Uncertainty lingers in Greece, and whether Greek politicians can show their willingness to reform themselves by eradicating the conflict between the left and right and deep-rooted political corruption and cronyism remains unclear. The Greek crisis showed that corrupt politicians have no choice but to survive by maintaining welfare programs as much as possible. Unless unfair privileges are stripped from the rich, the people will turn radical, which could plunge the world into chaos.

In a keynote speech at the B-20 summit ahead of the G-20 summit in Mexico on Monday, President Lee Myung-bak said, “Countries in crisis might experience pain and political unpopularity, but should continue reform to regain trust.” This applies to Korea as well. Politicians should not only take care of the economy to prevent further financial burden but also practice correct politics. Voters should also select the right people to represent them in government.