Fellow liberals upbraided me last week for arguing – in “Hello … China? Greece Calling,” July 6, 2015 – that:
a) Greek leaders were delusional for holding a referendum on Eurozone bailout terms (i.e., instead of humbly accepting them); and
b) Greek protesters were hopelessly misguided for expecting a no vote to lead to anything but even greater misery.
But I could hardly blame my political comrades.
After all, liberals far more acclaimed than I, most notably celebrated French economist Thomas Piketty and Nobel Prize-winning economists Paul Krugman and Joseph Stiglitz, were not only hailing the referendum as a brilliant political move, but also postulating that a no vote would be in the best economic interest of the long-suffering Greek people.
Piketty has joined other economists in calling for Greece’s heavy debt burden to be restructured and says Greeks should vote no. In an interview with the French broadcaster BFMTV he described the deal proposed by creditors as ‘bad’. He also warned that expelling Greece from Europe would push it into the arms of Russia.
(The Guardian, July 3, 2015)
Not surprisingly, the no vote was so decisive (at 61 percent) it seemed like an act of national defiance (or, from my perspective, one of cutting off nose to spite face).
Which is why it seemed schizophrenic that, instead of using his plainly contrived result as leverage to extract more generous bailout terms (as he vowed to do), Greek Prime Minister Alexis Tsipras convened an extraordinary session of parliament to plead for members to accept post-referendum bailout terms that are even more austere.
What was the point of the referendum?…
Roll forward seven days and Greece’s prime minister signed the very measures he had fought against. Corporate tax and VAT will rise, privatisations will be pursued, public sector pay lowered and early retirement phased out.
(BBC, July 11, 2015)
In other words, the Eurozone called Greece’s bluff, just as I predicted they would do – in “EU Calling Greece’s Bluff … Finally,” June 28, 2015. Even worse, Germany, the EU’s most influential member, deemed Greece’s ill-advised referendum such a petulant betrayal of trust that, instead of devising more bailout terms, it is reportedly drafting a “time-out” clause.
EU finance ministers remain locked in a tense summit considering Greece’s future in the euro – but as Athens seeks to reassure members they can be trusted with yet another bailout, it has emerged the Germans have already put together plans for a temporary ‘Grexit’…
The Greek government has vociferously denied the claim, but it is known German chancellor Angela Merkel remains unconvinced that their measures to tackle its debt will be enough to justify another bailout, while her finance minister Wolfgang Schaeuble said there were issues of trust.
His words were echoed by Dutch finance minister Jeroen Dijsselbloem, the Eurogroup president: ‘There is, of course, a major issue of trust: can the Greek government actually be trusted to do what they are promising to actually implement in the coming weeks, months and years?’
(Daily Mail, July 11, 2015)
Meanwhile:
[A]s Athens takes on the aura of Soviet Russia, with lines of people outside banks waiting to receive their daily cash allowance, some aid groups are seeing their supply channels narrow.
(New York Times, July 11, 2015)
This quote only hints at how foolhardy Greece was for holding this referendum. But it clearly vindicates my assertion that any flirtation with Russia would be tantamount to jumping from the frying pan into the fire … with all due respect to Mr. Piketty.
Indeed, if Greek leaders thought Putin could be their white knight, they would not have heeded the summons for all of them to appear in Brussels today to convince EU leaders that they are prepared, at long last, to behave like responsible adults.
Eurozone leaders will fight to the finish to keep near-bankrupt Greece in the single currency on Sunday after the European Union’s chairman canceled a planned summit of all 28 EU leaders that would have been needed in case of a ‘Grexit.’
But leftist Prime Minister Alexis Tsipras will be required to enact key legislation in parliament from Monday to start restoring the broken trust of his partners in the 19-nation currency union before they will agree to open negotiations on a third bailout, ministers said.
(Reuters, July 12, 2015)
Frankly, I cannot overstate how much this referendum has backfired … on the poor, misguided Greek people. If Tsipras had any self-respect, he’d resign.
After all, he led his people to believe that it would empower him to extract concessions from EU leaders that would ease their economic burdens. In fact, the referendum has only increased their burdens. What’s more, it has given EU leaders just cause to treat Tsipras, quite rightly, like an unruly child: by not only making him eat his vegetables, but forcing him to don a dunce cap and go to the naughty corner to boot.
Likewise, though, if the economists who championed this referendum had any self-respect, they would retreat to their ivory towers to eat lots of humble pie….
Yet I am all too mindful that this Grand Guignol melodrama being played out today would be a fleeting European farce if it were not such a congenital Greek tragedy….
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