The surprise Greek referendum is a chance for the Greek people to reject their government’s recommendation and agree to the European terms to end their financial crisis. If Prime Minster Alexis Tsipras is not ready to make the deal, a new mandate from the people in favour of compromise must force him to end his grandstanding. From their side, the European Commission, the European Central Bank and the International Monetary Fund (IMF) should be prepared to ignore Greece’s automatic default yesterday if the Greek people vote to accept the deal in a week’s time.
The Syriza government has been arrogant in its dealings with its European and IMF creditors from the start and it has been treated with a lot of tolerance as the Europeans, led by German Chancellor Angela Merkel, have struggled to get closer to its demands. There has been a genuine clash of ideas, but the deliberate desire for drama from Tsipras has been poisonous and led to a breakdown of trust.
The consequences of a Greek referendum vote to reject the deal would be profound. Greece will leave the euro and despite all the predictions that such a move can be handled by the financial and currency markets, it is not certain what will happen.
Greece will have to re-invent its currency and try to shadow the euro. But the fact that one member has fallen out will be a new factor across the Eurozone that will have set a precedent when the next crisis hits. The crisis will also have a long-lasting political effect, which a ‘No’ vote will greatly exaggerate. The deep failure of trust between the Syriza government and the rest of Europe has hit at the very heart of European dealing, which requires all the member states to, at the very least, be honest with each other.
It is hard to imagine Greece taking the European Union presidency when its turn comes around and maybe its membership of the EU will be in doubt.
