Tsipras won the referendum, but where do we go from now? Most, if not all of my Greek friends, intellectuals I highly respect campaigned for the Yes. I understand many of their concerns. Greece was institutionally not ready to enter the Eurozone.
Greece politics are dysfunctional and clientelistic — there has been fiscal irresponsibility, lack of transparency and a quasi-failed state. Why would Tsipras be any different? Syriza slogans sound like the traditional ultra-left in Europe: say NO to everything, pretend the unsustainable welfare state status quo will survive and deny fiscal realities. The last five months of negotiations brought nothing — Tsipras seems to have lost most of his allies among social democrats in the Eurozone.
These arguments are all correct. I fear some of my Greek friends may have also been influenced by the Eurozone blackmail saying that a NO vote would mean exit from the Eurozone, something Greeks do not want.
Nevertheless, the Greek NO is also the most potent rejection of the misguided austerity policies imposed by Europe on Ireland, Spain and mostly Greece. It is a shame that the European left in France, Germany, Italy and other countries did not come out as strongly as Tsipras and the Greeks against this terrible austerity policy.
Americans and mainstream economists have been watching in dismay the terrible spectacle of the Great Depression scenario unfolding in parts of Europe. U.S. Policies though not optimal have been so much better than the European response to the 2008 crisis. Greece has been hurt the most by austerity policy. Should it now be punished and be excluded by the austerity club?
Eurozone leaders have now been humiliated by Greek voters after having tried to humiliate the Greek government elected in January. What next?
Punishing Greek voters by continuing to force Grexit would not look good to most of the outside world. It would continue to undermine Europe’s credibility among large parts of the electorate in European countries that have been hurt by austerity policies. History will not forget those responsible for killing the European dream.
Greek voters were not afraid to defy the Eurozone blackmail. Their courage, pride and determination should be praised. Most importantly though, now is the time for healing. The rift inside Greece between the NO and the YES camp must be healed, and this is the responsibility of the Greek government. It is also time for healing of the bad blood between the Greek government and the Eurogroup.
Whatever has been written before the referendum, the NO outcome strengthens Tsipras’s bargaining position, but offering the resignation of Varoufakis is a clear sign of good will on the part of the Greek premier. Enlightened European leaders should now look to the future, not towards the past. They should not be afraid to eat humble pie and finally agree to a substantial haircut on Greek debt. Once this is said, the Greek government should agree to work to reform its country.
The troika is probably not the most competent to help with this. They do not know how to do state-building. Tsipras should appeal very broadly to international experts on state-building. I am afraid there is real lack of competence within Syriza. Pride and defiance are not even the first step in that direction. They should, last but not least, come up with a plan to balance their budget, and even more importantly try to get the economy growing.
The ECB and Merkel now will decide which options are closed to Greece. What matters is whether the EU has a future and can be run in a more democratic way. The Greek referendum was perhaps the first step towards a more democratic EU. I hope this is the case. Europe is truly at the crossroads now.