Greek PM Urges A No Vote In Sunday’s Referendum As Greek Economic Crisis Deepens

The Greek Referendum: Why I wont be voting

For seven years, I have watched my country’s downfall. For seven years, I’ve been an observer of the moulding of my future. For seven years, I’ve been paralysed. When the crisis was in its infancy, I was entering adolescence. Now, time has granted me the right to vote. In a week’s time, Greece will be deciding its economic, political and cultural future. We have been asked to vote on a referendum that is much bigger than us. For the first time in my life, I don’t know if I want my opinion to be heard. The referendum called by our Prime Minister, Alexis Tsipras, will effectively determine our future in the Eurozone. The problem is, it will be determined sooner than that.

We are due to pay 1.6 billion euros to the International Monetary Fund on Tuesday, and there are nowhere near enough funds to do that. Eurozone finance ministers rejected an extension of the bailout programme that also ends on Tuesday to facilitate the referendum. The capital controls
introduced on Sunday Failing on our payments, would send us into bankruptcy. As Mr. Varoufakis is right on insisting, there is no provision for any country to leave the Eurozone, but that doesn’t
mean one is needed.

The single currency union was built on shaky foundations. Monetarily tying completely different
countries together is questionable in itself, but not creating any corresponding fiscal mechanism is
suicidal. It turns out that in policy-making the Golden Mean doesn’t apply. We have now learned our lesson; the Euro under-performers have ran into some dangerous quicksand. Some of them, like Ireland, have managed to escape it; others, not so much. In light of these facts, it is highly unlikely that Eurozone leaders will be willing to lend a hand to a defaulted Greece.

In other words, when Eurogroup stated that Greece will not get an extension to the bailout scheme because it broke negotiations “unilaterally,” they slammed the door in our face. Such moves are indicative to the treatment that Greece has faced from other euro countries, but shouldn’t be treated vengefully. We are at least partly responsible for our current predicament. In effect, Mr. Tsipras called a referendum that will not be relevant. Greece can’t reject a proposal that isn’t on the table any more. Not to mention that at this point there has been no such official proposal yet.

So why did Mr. Tsipras, in his own words, “initiate” this move? Economically speaking, he wasn’t left with much choice. The creditors’ insistence on a strategy that hasn’t and will not work, austerity, rendered the proposal undesirable. Of course, the alternative with which we are faced right now is, in my opinion, worse.

A Greek currency would be devastating, at least for the foreseeable future. In April 2015 we ran a current account deficit of 955 million euro. We offer little to no competitiveness as exporters and rely massively on imports. If we were to print our currency, we would need a lot of it to buy foreign goods and we have very few things to sell. Add to that equation the always looming peril of inflation, and the plot starts to seriously thicken. As the Bank of Greece put it in its annual report published earlier this month: “An exit from the euro would only compound the already adverse environment, as the ensuing acute exchange rate crisis would send inflation soaring.”

There is basis to the claims that in the longrun Greece would stabilize as a result of a growing economy. In this case, a Greek currency that reflects the Greek economy would be beneficial. But as to when the economy will start growing and how hard a blow the Greeks must withstand whilst anticipating a recovery, no one can know. However, this is the promise Mr. Tsipras made prior to his election; he would take Greece out of the Eurozone if need be. Indeed, many people voted him hoping for such fearlessness. It is now time for him to keep that promise, but instead he decided to ask the opinion of the Greek populace once again. You know, just to make sure everyone is on the same page. The referendum would alleviate some of the responsibility that lies on SYRIZA’s shoulders if they proceed as promised.

It is also possible that Mr. Tsipras thought the referendum could be used as a bargaining chip, or that the creditors put an unacceptable deal to the table just to force him out. Either way, the announcement of the vote put things on a fast track. Greece has to prepare to kiss the euro goodbye, and no one has a plan as to how that will occur. Both sides, in my opinion, made the same mistake; they were playing politics when they should have been solving economics. What is happening to Greece right now is beyond sad, and almost unbelievable how little co-operation and common sense has been exemplified by the people trying to salvage the situation.

The far-reaching effects of default have already started to show, when stock markets are falling and Greeks have limited access to cash. Our best hope is that this week will be bad enough to shake the negotiators back to the table, and that is a slim chance. As a Greek individual, I want nothing more than to go home, vote and support my country. But as a Greek and European citizen, I am disappointed by where our, supposedly protective, governments have brought us. I don’t want to be a part in a misguided political game.



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