The European Union (EU) enters the most crucial phase of its existence as leaders gather to decide on the future of Greece this week.

On July 5, the Greek public had voted overwhelmingly in a national referendum to reject the latest proposed austerity measures by the troika, a tripartite committee led by the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF).

The result did not directly push Greece to exit the European Union, but it has certainly led the country closer towards that.

Like every other financial disaster that has ever happened, there are life lessons to be learnt. We will all soak this up and ensure nothing of this nature will ever happen again …. Right?

1. Leave no man behind

The truth is that Greece is not huge by any measure. In terms of population and GDP, Greece accounts for no more than 3% of the EU. However, from day one, Greek woes had spooked the markets.

Fear of the contagion effect had already plunged the European debt markets into turmoil. The recent turn of events has resulted in the continued depreciation of the Euro against other major currencies.

Across the globe, equity markets in China has lost up to a third of its value (by some measures, a value larger than the entire Greek debt)

Life Lesson: Any team or group is defined by its weakest link. Ensure that everyone moving forward together and that no one is left behind.

2. Manage your earnings well

Tax collection is the key revenue source for any government in the world. One of the most documented issues with Greece is its issues with tax evasion and corruption - as much as €30 billion of tax are under-collected each year. The size of the “black market” in Greece is estimated to be one of the largest in the EU, up to 24% of its GDP.

Life Lesson: Whether you are employed or self-employed, ensure that your earnings and cash collections are constant and monitored all the time.

3. There are two sides to every coin

EU’s reaction to the Greek referendum is interesting. Germany has been the strongest opponent to the current Greek government and has now openly suggested that Greece should exit the Euro. Pro-austerity countries like Finland, Austria and the Netherlands are with the Germans on this, expressing regret over the referendum outcome.

In the other corner, France, Italy and Cyprus have been conciliatory, suggesting that the troika should actively renegotiate bailout terms with Greece.

Life Lesson: There will be two or even more sides to the story. Accept that sometimes a common ground cannot be found and seek solutions that befit most parties (it can never be all parties).

4. In the long run, you cannot live beyond your means

The Greek crisis is also a result of years of callous government spending. Successive Greek governments since the 1970s had run large budgets deficits to finance military spending, public sector jobs and generous pensions. In 2004, the Greeks spent €8.5 billion to host the summer Olympics.

This is also coupled by the fact that Greece has traditionally been a net importer of goods, relying somewhat on the volatile tourism and the maritime industry for income.

Year after year, the Greeks borrowed heavily from the open debt market to meet shortfalls in the budget. Its debt-ridden past has now caught up with the country.

Life Lesson: Debt is not necessarily evil, but excessive debts will suffocate you one day. Ensure that you are at a sensible debt level at all times.

5. The talk of money hurts relationships (Chinese proverb: 谈钱伤感情)

To put it empirically, the current situation in the EU is yet another union ruined by the root of all evils – money. In terms of culture, geography and history, Greece is part of Europe. To kick Greece out of the EU because of monetary problems will not just be shameful for the union but also for human nature.

Life Lesson: Well, it is easy to tell anyone not to let money be a factor in any relationship but that would have been too superfluous. Instead, let’s say this - always understand that money presents thorny issues in any relationship so the best approach is to be frank and open about it.

6. Insanity is doing the same thing over and over again, but expecting a different result

The events that led to the bailout referendum are not new. Since 2009, various Greek governments had passed seven different austerity packages and had previously accepted two bailouts from troika.

The reality is that things did not improve. Because the country’s GDP had shrunk so much, its debt-ratios have continued to soar. The cut in government spending had sent the economy into a spiral, making recovery (and future ability to repay debts) difficult.

The Greek people, broken by the economic hardship, have reacted, first by voting in the SYRIZA - a left-wing political party - in January this year then by rejecting the new bailout terms in the referendum.

Life Lesson: Many problems in life cannot be solved by applications of the same methods over and over again. Think out of the box and use different approaches.

7. Marriage is sacred; Divorce is messy

The EU was formed as a result of several treaties after World War II, most important of which was the Maastricht Treaty in 1992 that laid the ground for the establishment and the maintenance of a single market. Each milestone of the formation of the EU was greeted with smiles, celebratory champagne and triumphant handshakes.

With Greece now on the brink, the future looks very much uncertain for the entire bloc. How will Greece function outside of the EU? Will more countries follow Greece? After Grexit, will both sides honour all agreements made during the union? Divorce is indeed messy - legally and emotionally.

Life Lesson: Lastly and most importantly, unless you are ready to commit for life - in sickness and in health, do not enter into a marriage.

Top photo from Flickr.

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