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Home > English > Alternatives International Journal > 2015 > 7 July 2015 > With Referendum on Austerity, Greece Goes all-in on Democracy

With Referendum on Austerity, Greece Goes all-in on Democracy

Wednesday 1 July 2015, by Gabriel Nadeau-Dubois

Within Syriza, tensions were reaching a fever pitch. The left wing of the party was growing impatient, and party activists openly confessed their disappointment with the government. Some went so far as to speak of treason, cracks beginning to appear in the political party and its fragile coalition government. Most observers predicted a deal with European creditors, on terms inevitably unfavourable to Greece.

Editors’ note: Gabriel Nadeau-Dubois is a former spokesperson for the Quebec student movement, a columnist for Ricochet and French CBC Radio and a Governor General’s Award-winning author. Currently in Greece, he sent the following report to our French edition from Athens.

Against these long odds, Alexis Tsipras made the most audacious decision of his young mandate on Saturday morning: asking the Greek people to vote directly on the proposed bailout deal, and calling for them to vote against.

In an address to the nation Sunday, the Greek prime minister confirmed the holding of the public referendum and announced the beginning of capital controls designed to avoid a bank run. The country’s banks will be on “holiday” for the week, and a daily withdrawal limit of 60 euros already in force will remain in place until July 7, two days after this referendum.

Meanwhile, the Greek prime minister has promised to continue paying pensions and salaries as usual. The one piece of good news for the Tsipras government is that the European Central Bank, not wanting to take sole responsibility for the collapse of the Greek banking system, decided to maintain (but not increase) financial aid to Greek banks.

These recent developments have led to the first signs of panic among the Greek population. Since Saturday’s speech long lines have appeared outside ATM machines, and more and more of these machines are out of funds. Greece is on red alert.

As I write these lines, the creditors in Brussels continue to refuse to accept the only demand of Tsipras, which is a temporary extension of the financial aid program to Greece until the referendum can be held on July 5, so that the vote can happen in peace. In his speech to the nation on Sunday, the Prime Minister vehemently condemned that decision, describing it as a “negation of the right of the Greek people to arrive at a democratic decision.”

Tsipras goes all-in

Was this move planned in advance? Regardless, no one can now say that Greece refused to negotiate. In tabling a controversial final offer last Monday, which could well have cost him power as it contained major concessions, Tsipras gave a chance to the negotiating process. Charges of bad faith can no longer be made. The Greek prime minister can now confidently say that he exhausted all options at the negotiating table. Conversely, in arrogantly refusing the compromise proposed by Athens, the creditors have demonstrated, once again, their ideological bias for austerity, and their lack of respect for democracy.

In announcing, Saturday night, the holding of this referendum, Alexis Tsipras has killed two birds with one stone: restoring unity within his party and highlighting the ideological blindness of the powers and institutions of Europe. In a speech laced with references to national pride and the history of the country, he called upon his fellow Greeks to respond to the “ultimatum” offered by creditors: “Faced with this blackmail designed to force you to accept a program of austerity which is humiliating, never-ending and lacks any prospect of recovery, I am calling on you to respond with sovereignty and with pride, as the proud history of the Greek people demands.”

The tone has been set.

A potentially costly defeat

If the young leader of Syriza wins his bet and the Greek people democratically reject the “reforms for cash” deal offered by creditors, at the cost of great suffering and misery, it is Europe itself which will tremble.

A snowball effect could greet a “Grexit,” as other countries caught in similar crises could, in the medium term, decide to follow the Greek example and opt for a strategy of “default and devaluation.” The Syriza government, young and inexperienced though it is, could provide a political example to the rest of the continent. Now accused of “bringing your country into a chaos from which it cannot escape in the short term” by the German finance minister, Tsipras has replied with confidence that he is acting as an agent for his people. If the referendum proves him right, the face off between the power of money and the democratic will of the people will be total.

Conversely, if voters accept the deal produced in the past weeks of negotiation, the legitimacy of the Syriza government will be severely affected. The resignation of Tsipras, or the dissolution of parliament, would be entirely possible. In calling this referendum, the Greek government is going all-in, and no matter what happens, an important chapter in European history will be written on July 5.

Unpredictable results

In Europe’s conservative media, commentators are confident that Tsipras will lose his bet. This remains a real possibility. Two polls, published in the last few hours, paint totally opposed pictures of the situation.

A newspaper aligned with the right has announced a victory for the “YES” side in their poll, with 57 per cent support. Another paper identified with the centre-left predicts a “NO” vote of 53 per cent. By all indications, the suspense will continue until the votes are counted.

I met Antonis Mavromatos a few days ago in Athens. The young doctor and influential activist within the left wing of Syriza admitted that he was very worried, even angry, at the direction taken by his party. Reached again in the capital hours after the announcement of the referendum, he confessed his surprise, and his joy: “I am very happy. The pressure of the creditors was too strong, even unbearable. Tsipras decided to turn that pressure back on them. That’s real politics!” A prediction? “Greeks will say no. 60 per cent!”