Referendum no panacea

Greek crisis

"Many are asking what happens after the #referendum? With a clear 'NO' we will have a much stronger negotiating position #Greece #vouli"– Alexis Tsipras. @tsipras_eu

Unfortunately not, whatever the rights and wrongs of the Greek position. While a vote may enhance the prime minister’s authority and legitimacy with his people, it will do little to impress EU partners who answer to a different, equally democratic mandate, and little to shift the balance in the negotiating argument.

Speaking to MPs on Saturday night Tsipras insisted that "the Greek people will say a big No to the ultimatum but a big Yes to a Europe of solidarity." But will they come closer to effecting such a desirable outcome?

It seems that referendums may be becoming the weapon of choice in EU disputes. No doubt noting the effectiveness of Ireland’s referendums in delaying shaping EU reform, the UK is using the 2017 “in-out” vote as a lever to prise change from partners. And now Tsipras has played the referendum card – even though he is calling for a No, in both the subtext is the supposedly unanswerable “if it were up to me, no problem, but the people are breathing down our necks”.

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The 178-120 approval of a referendum by Greece’s parliament early on Sunday has effectively changed the ball game, as Michael Noonan put it: “It’s not a question of waiting to see what might happen on Monday in terms of crisis. The crisis has commenced.” The eurogroup ministers have interpreted the Greek move as a decision to walk away from talks and have understandably declined to extend Greece’s bailout period – after all, what will change next Sunday?

Greece is due to pay €1.5 billion to the IMF on Tuesday. It has said it will not do so. Meanwhile the run on the banks continues apace – it’s not clear at the time of writing whether the ECB will extend support, and it is possible they will be forced to remain closed today. After so many false-dawn “final” deadlines, the moment of truth has arrived. In the coming days, “Greece will experience acute difficulties,” German Finance Minister Wolfgang Schaüble told reporters, and it is difficult to see how it can remain part of the euro.

Faced with that choice next Sunday, if the choice is still there, it is still possible, however, that Greek voters will decide they prefer continuing membership to the siren calls of no surrender from Syriza. According to a survey published on Saturday two-thirds of Greeks believe the country should remain in the euro area and 57.5 per cent that the government should back down to reach a deal with creditors (Kapa Research, for To Vima newspaper). That mood could be sustained were the eurogroup to make a pledge now to serious Greek debt write- down in the country's looming third bailout talks.