Greek voted no to the austerity plan that the Troika was forcing on it. I’m a little surprised that it went down to such a stunning defeat, “Greeks voted by more than 60% to 40% in support of the prime minister.” This is much different from what the polls showed, which was that it was a tight race and that the margin would be razor thin. I’m thinking that the polling was skewed toward the rich. But it hardly matters. This is a good result, even for those who thought Greek should agree to decades more of crushing austerity. At least the current Greek government has a mandate.
Of course, I’m glad for the no vote because I think it was the right decision on the merits. I discussed this earlier today, The Shortsighted Viciousness of the Greek Haters. And it is the right decision in so many ways. But I think the most important way is that the no vote was a vote for democracy. If the Greeks had voted yes, they would have been admitting that democracy doesn’t exist. Or at least that democracy doesn’t exist if the Troika doesn’t like the government. Of course, this isn’t over. And the Troika will now do everything it can to make the Greek people regret this vote.
But we should be clear about what cannot be done. On Friday, James Galbraith wrote, Nine Myths About the Greek Crisis. His first myth was, “The referendum is about the Euro.” He noted that a lot of people had been talking about how a yes vote would make Greece exit the euro and the EU. Syriza — the Greek government — has always maintained that it is committed to both. It has been those who want to control Greece that have made claims otherwise. As Galbraith noted, “And legally, according to the treaties, Greece cannot be expelled from either.”
That doesn’t mean that the Troika won’t do everything it can to push Greece out of the euro. The European Central Bank (ECB) has already pursued policies designed to bully the country. In February, it stopped direct funding of Greek banks, only providing so called emergency liquidity — which was very expensive. And then a couple weeks ago — after Syriza backed out the negotiations and called for a referendum — the ECB capped support causing a bank run requiring the initiation of capital controls. It’s only going to get worse.
I must admit to being confused as to where things go from here. What I assume will happen is that the Troika — and really, pretty much all of Europe — will see this referendum as just another example of how terrible Greece is. And this will lead to the Troika doing everything in its power to harm the country. And it may just get to the point where Greece has no practical alternative to leaving the euro. I certainly think that’s the best thing for Greece in the long run. But it’s going to be very difficult — and dangerous — in the short term. I wish them the best. And I certainly hope that the Troika comes to be seen widely for the brutal and incompetent minions of the power elite that they have shown themselves to be over the last five years.