a ‘take-it-or-leave it’ vote is a recipe for disaster for greece

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June 28, 2015 7:26 pm

Aristides Hatzis

arly Sunday morning the Greek parliament voted tohold a referendum that will be decisive for the

country’s future. Supposedly this is going to be a vote on a“take-it-or-leave-it” proposal by Greece’s creditors — theEU, the European Central Bank and the InternationalMonetary Fund.

But in fact this is going to be a referendum about whetherGreece remains in the eurozone, the EU or even the west.

I cannot see how this plebiscite can even take place. The obstaclesseem insurmountable.

The logistics are awful. The notoriously inefficient Greek administration will have a hard timeorganising the referendum in less than a week. Worse, it could cost more than €100m when thepublic coffers are literally empty.

Beyond the cost, though, there is the problem that this poll has no real objective. The bailoutproposal was not final and it has already been recalled.

Voting on a non-existing proposal is surreal and only serves to highlight that the referendum isreally about the standing of Greece in Europe. The Greek government will do its best to avoid theassociation, a difficult task given the apparent rupture with the rest of Europe.

Before Greece votes, the country will have already experienced a hard default on a €1.5bn loanfrom the IMF and the expiration of the bailout agreement tomorrow.

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After a spate of bank runs, capital controls have been introduced, banks will be closed indefinitelyand cash transfers abroad have been limited — not the appropriate environment for deliberationbefore a referendum. Greek voters will feel frightened, desperate and angry. This is a recipe fordisaster.

Whatever the outcome, the result will most likely be deadlock. According to the Greekgovernment, a No vote will pressure the EU, ECB and IMF to compromise. I highly doubt it. Anyresult will only bind the Greek government.

A Yes vote will be a major defeat for Alexis Tsipras, the prime minister. He will have to resign anddemand elections or a coalition government.

Which leads to the question: What were they thinking? Why did the Greek government choose apath that clearly leads to a quagmire?

The simple answer is the fear of political cost. They behaved opportunistically and myopically inorder to satisfy their electoral base and protect their favourite vested interests.

However it is obvious that this move can have detrimental effects for the very people they try toprotect — and it can also lead to the downfall of the Syriza government. Can’t they see it?

It is difficult to tell. This is not a typical leftist party. It is a coalition of radicals, Maoists, formerStalinists and populists.

Their gut feelings are anti-European and anti-western. They feel more at home with theircomrades in Caracas than in Brussels. They are thinking and deciding collectively, with apsychology which is a mix of delusion andfanaticism.

Mr Tsipras is himself a product of this environment. He was raised and socialised in a climate ofantiquated dogmatism, with no access to the real world.

He learnt how to be a party apparatchik, nothing more. He managed bitterly to disillusion the fewof us who believed that he was capable of outgrowing his party, maturing enough to acceptpolitical cost and behaving rationally.

His irrational decision to call for the referendum at the weekend was also the result of the short-sightedness of the EU and the other creditors.

Greece’s European partners pushed him over the edge by behaving dismissively and by insisting ona continuation of a failing austerity recipe with unreasonable tax hikes and unfair spending cuts.

This led to a knee-jerk reaction by the Greek people. The government is now trying to exploit the


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underdog culture, the nationalistic sentiment, the ignorance of the average voter.

The referendum idea was supported by Syriza as well as its populist ultra-right-wing governmentpartners and the neo-nazis.

In a previous opinion piece in the Financial Times I argued that Greece was in danger of becominglike the Weimar Republic because it had so many extremists from left and right inside theparliament. However, instead of a conflict between them, the extremists formed a coalition.

This rogue coalition has to fight against pro-Europe citizens, conservatives, liberals and socialists.Greece’s history informs us that nothing good comes out when there is such a great schism insociety.

The writer is an associate professor of law and economics at the University of Athens and aco-founder of GreekCrisis.net


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a ‘take-it-or-leave it’ vote is a recipe for disaster for greece

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