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What is at stake in the Greek referendum?

How will Greece be able to fix its economy in a desert landscape, with no appetite for reforms, without helpful partners and with a crippled democracy?

A 'Yes' rally in Syntagma Square, Athens. Demotix/Bjorn Kietzmann. All rights reserved.And so, in yet one more act of high drama, Greece is heading on Sunday towards a referendum. Only that the question asked is, to say the least, bewildering. Not only does the single ballot box contain eighty-five words, of which fifteen are in English, it also comes with two appendix technical documents and is presented in a biased no-before-yes format.

Still, at the moment things are fast getting simplified in Greek peoples’ minds: A ‘yes’ vote stands for Greece remaining at least in Europe (but not necessarily in the Eurozone) and the continuation of necessary austerity with reforms. Instead, a ‘no’ vote will be the gallant gesture of a proud people determined to maintain its ‘dignity’ and take from the ‘troika’ (the European Commission, the European Central Bank, and the International Monetary Fund) no more.

In real terms, both sides have it wrong. The ‘yes’ side should know by now that reformism is precisely what the present Greek government most abhors. The ‘no’ side should also know, and recognize, that Greece has already lost most of its dignity, together with the trust of other nations in her; nor is it clear at all how national pride is to be regained. Apart from the extraordinary electoral rash, which leaves no real room for clear thinking, there are two closely connected reasons that explain such misperceptions about Greek realities: an emphasis on economics over politics and the fact that 2015 is not 2010. Here is why.

When Greece entered the first bailout program in early 2010, there were three choices available. The first choice was to default – something, however, that no important player at the time even dared to suggest. A second choice was to borrow money and initiate a bold programme of necessary medium- and long-term reforms, especially for better running of the state. Greece’s third choice was to borrow money with no reforms. As we now know, for five years successive Greek governments became determined to live on borrowed cash without implementing serious reforms for fear of the political cost. This paved the way to the elections of January 2015.

Once there, and already exhausted after five years of hardship, Greece’s citizens voted for a government that promised to end austerity but did not explain in which way. Lacking a realistic economic programme, and still a few parliamentary seats short of having an absolute majority on its own, Syriza formed a coalition government with the Independent Greeks (ANEL), an ultra-nationalist, right-wing populist party. Since then, the Greek government has utterly failed to propose a credible plan for reforms, choosing instead to spend all its political capital on attacking internal and external ‘enemies’.

This however reduced Greece’s presumed options from three to only two: either muddle through on borrowed money and no reforms, or default. Only that the first of those options was no longer realistic as the ‘troika’ (or, in Greek government’s newspeak, the ‘institutions’) made clear that the deal was money-for-reforms, plain and simple. Confronted with this dilemma, the Greek tandem of Syriza/ANEL had no hesitation im rejecting reforms while at the same time blackmailing their European ‘partners’ with the feared destruction of the Eurozone, if not the EU as well, if Greece was allowed to default. 

It was a high-risk gamble that did not pay off. Today, as the Greek banks are shut indefinitely and capital controls are in place, Greece has also failed to repay its IMF loan and the process of her default is set in motion with as yet unthinkable consequences, mostly for the poor and the needy. Ah, yes, the country is also heading towards a referendum in which the two government partners are openly supporting the ‘no’ choice. Which, admittedly, as days pass, may even become predominant in Greek society, especially since it is also fully endorsed by the neo-Nazi party of Golden Dawn.

It is through this prism, however, that the Greek voters’ choice between a ‘yes’ and a ‘no’ in this Sunday’s referendum begins making sense. For, somehow paradoxically, while the ‘no’ side still thinks in terms of already foregone and non-existing economic choices, the ‘yes’ side is more concerned about political options and, indeed, the future of democracy itself in Greece.

Accordingly, in the ‘no’ camp, even top economists like Paul Krugman and Joseph Stiglitz are urging the outright rejection of the 'austerity regime that has left Greece languishing for five years' so as to avoid a 'depression almost without end'. Such pundits involuntarily forget what the Greek government voluntarily conceals from the Greek people, that is, pure politics. How Greece will be able to fix its economy in a desert landscape, with no appetite for reforms, without helping partners and with a crippling democracy?

In the ‘yes’ camp, even when support comes from renowned economists, all talk is about reform politics. This is based on the simple realization that no improvement of the situation is possible without brave and painful changes and that no such changes can be successful without the country being in the safe harbor of the EU, and with its democracy in place and functioning.

Of the two choices the Greek people are so awkwardly confronted with, only the ‘yes’ vote allows for some hope for the future of the country and its existing political regime. And this is what Greek democrats should vote for on Sunday.

About the author

Takis S. Pappas is a Visiting Professor at the Central European University, and has recently authored Populism and Crisis Politics in Greece (Palgrave 2014) and co-authored European Populism in the Shadow of the Great Recession (ECPR Press 2015).

 


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