Aristides N. Hatzis, "A ‘take-it-or-leave it’ vote is a recipe for disaster for Greece" (Financial Times, June 29, 2015)

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June 28, 2015 7:26 pm
Aristides Hatzis
arly Sunday morning the Greek parliament voted to
hold a referendum that will be decisive for the
country’s future. Supposedly this is going to be a vote on a
“take-it-or-leave-it” proposal by Greece’s creditors — the
EU, the European Central Bank and the International
Monetary Fund.
But in fact this is going to be a referendum about whether
Greece remains in the eurozone, the EU or even the west.
I cannot see how this plebiscite can even take place. The obstacles
seem insurmountable.
The logistics are awful. The notoriously inefficient Greek administration will have a hard time
organising the referendum in less than a week. Worse, it could cost more than €100m when the
public coffers are literally empty.
Beyond the cost, though, there is the problem that this poll has no real objective. The bailout
proposal was not final and it has already been recalled.
Voting on a non-existing proposal is surreal and only serves to highlight that the referendum is
really about the standing of Greece in Europe. The Greek government will do its best to avoid the
association, a difficult task given the apparent rupture with the rest of Europe.
Before Greece votes, the country will have already experienced a hard default on a €1.5bn loan
from the IMF and the expiration of the bailout agreement tomorrow.
©AFP
A ‘take-it-or-leave it’ vote is a recipe for disaster for Greece - FT.com http://www.ft.com/intl/cms/s/0/823557f4-1da2-11e5-ab0f-6bb9974f25d0...
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2. After a spate of bank runs, capital controls have been introduced, banks will be closed indefinitely
and cash transfers abroad have been limited — not the appropriate environment for deliberation
before a referendum. Greek voters will feel frightened, desperate and angry. This is a recipe for
disaster.
Whatever the outcome, the result will most likely be deadlock. According to the Greek
government, a No vote will pressure the EU, ECB and IMF to compromise. I highly doubt it. Any
result will only bind the Greek government.
A Yes vote will be a major defeat for Alexis Tsipras, the prime minister. He will have to resign and
demand elections or a coalition government.
Which leads to the question: What were they thinking? Why did the Greek government choose a
path that clearly leads to a quagmire?
The simple answer is the fear of political cost. They behaved opportunistically and myopically in
order to satisfy their electoral base and protect their favourite vested interests.
However it is obvious that this move can have detrimental effects for the very people they try to
protect — and it can also lead to the downfall of the Syriza government. Can’t they see it?
It is difficult to tell. This is not a typical leftist party. It is a coalition of radicals, Maoists, former
Stalinists and populists.
Their gut feelings are anti-European and anti-western. They feel more at home with their
comrades in Caracas than in Brussels. They are thinking and deciding collectively, with a
psychology which is a mix of delusion and
fanaticism.
Mr Tsipras is himself a product of this environment. He was raised and socialised in a climate of
antiquated dogmatism, with no access to the real world.
He learnt how to be a party apparatchik, nothing more. He managed bitterly to disillusion the few
of us who believed that he was capable of outgrowing his party, maturing enough to accept
political cost and behaving rationally.
His irrational decision to call for the referendum at the weekend was also the result of the short-
sightedness of the EU and the other creditors.
Greece’s European partners pushed him over the edge by behaving dismissively and by insisting on
a continuation of a failing austerity recipe with unreasonable tax hikes and unfair spending cuts.
This led to a knee-jerk reaction by the Greek people. The government is now trying to exploit the
A ‘take-it-or-leave it’ vote is a recipe for disaster for Greece - FT.com http://www.ft.com/intl/cms/s/0/823557f4-1da2-11e5-ab0f-6bb9974f25d0...
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underdog culture, the nationalistic sentiment, the ignorance of the average voter.
The referendum idea was supported by Syriza as well as its populist ultra-right-wing government
partners and the neo-nazis.
In a previous opinion piece in the Financial Times I argued that Greece was in danger of becoming
like the Weimar Republic because it had so many extremists from left and right inside the
parliament. However, instead of a conflict between them, the extremists formed a coalition.
This rogue coalition has to fight against pro-Europe citizens, conservatives, liberals and socialists.
Greece’s history informs us that nothing good comes out when there is such a great schism in
society.
The writer is an associate professor of law and economics at the University of Athens and a
co-founder of GreekCrisis.net
A ‘take-it-or-leave it’ vote is a recipe for disaster for Greece - FT.com http://www.ft.com/intl/cms/s/0/823557f4-1da2-11e5-ab0f-6bb9974f25d0...
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