A Greek referendum

July 5 is the day Greece may collapse or chart out a new future for itself. That day, the Greek people will vote on whether to accept or reject the tough terms of a bailout package proposed by the European Union and International Monetary Fund. Greece’s economy has been on the verge of collapse since the financial crisis of 2009. Since then, the country’s democracy has been subverted by a set of EU and IMF technocrats, who have directed the government to undertake severe cuts in spending, including drastic cuts in pensions and government jobs. Greece has now missed a second deadline to pay a 1.6 billion euro payment to the IMF with its financial solvency looking precarious. Looking at Greece from the vantage point of the world financial markets, complete collapse looks ominous. Most international stock exchanges fell by over two percent as a ripple effect of the Greece collapse was anticipated. But if you look at Greece from the vantage point of its people, if it remains resilient it could show the world a new way of dealing with the crisis. Syriza and the left-wing coalition in Greece has fulfilled its election promise by talking tough to the IFIs and EU, blaming them for the crisis and the crippling terms they are trying to force on Greece.
And when talks between the Greek government and the EU and IMF teams reached a deadlock, Syriza took a bold step: it called a referendum on the terms of the bailout on July 5. The decision to call a referendum is rather radical. The home of democracy has put out for public discussion the one thing governments have always kept out of their hands: sovereign debt. This decision has caused European powers to panic. With sovereign debt much more central to government decision-making than is admitted by anyone, Greece is standing up to the economic technocracy that has encroached on democracy since the 1990s. The fact that Syriza has given people the power to decide means major European leaders are now using the politics of fear. The French president, Italian prime minister and other major European leaders have threatened that Greece faces a choice between being part of the European Union or opting out of it. With Greece imposing a 60 euro per day limit on cash withdrawals, the Greek government has created financial panic in the economy. Syriza has threatened to resign if the voters say yes. Coming on a mandate of increased public spending, it may be an honourable way to admit that it had no actual plan of averting financial collapse. The fact is that the Greek people will suffer whether they vote ‘yes’ or ‘no’. Opting to vote ‘no’ is the braver of the two choices. It burdens them with the freedom of charting a new path for themselves and the world. The most important thing is that the choice is with the Greek people.