Greek referendum: smart response from Tsipras, but triumph may be brief
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Version 0 of 1. Alexis Tsipras’s response to the Greek referendum was smart. A dumber politician might have been tempted to turn up the volume following the thumping victory for the no side in the referendum. But instead of striking macho poses, the Greek prime minister was emollient. He said Greece wanted to resume talks with its creditors, and backed up his words by getting rid of his finance minister, Yanis Varoufakis, who relished being a figure of hate in Brussels. Emollient and realistic, because, without question, Tsipras is in an uncomfortable position. The Greek economy is even closer to seizing up than it was before Sunday’s vote. The banks remain shut and it looks as if the cashpoints will run out of cash within the next 48 hours. Even if a deal is done in the next few days, Greece is in the early stages of another deep and painful recession. All that said, Tsipras is better placed than he might have feared in the middle of last week, when it looked possible that the gamble of holding a referendum would blow up in his face. Winning the vote decisively has refreshed the anti-austerity mandate he got from the Greek people at the general election in January. Far from securing the regime change they were seeking, the creditors now find that Syriza is being supported by all Greek political parties apart from the communists and the neo-Nazi party Golden Dawn. By demonstrating that he wants to reopen negotiations, he has put the onus on Greece’s 18 single-currency partners to respond. Abrupt changes of tack have been a feature of the way Tsipras has behaved in the past five months. David Marsh, of the thinktank OMFIF, said: “The failure of the creditor countries, led by Germany and the Netherlands, to recognise a central maxim of guerrilla fighting – the enemy will always surprise – provides a key reason for the Oxi win. If you’re outnumbered, practise the unorthodox. Tearing up the rules of Brussels conduct, Tspiras and Varoufakis, his finance minister-cum-field marshal, have outmanoeuvred and divided the surplus states by constantly re-engaging, over five months, from unexpected, demanding and outrageous battle positions.” It is, of course, possible that Tsipras has overplayed his hand. Rebuilding trust with the other eurozone members may require a lot more than simply removing Varoufakis, such is the ill-feeling towards Greece. Marsh, for one, thinks Tsipras’s moment of triumph will be brief. “The fruits of victory will turn sour,” Marsh said. “Varoufakis’s decision to resign from the finance ministry – saying he will wear the creditors’ loathing with pride – seems sensible. Creditors and debtors alike will be punished. Greece faces a wrenching period of infighting and pain, during which devaluation-stamped banknotes, rationing of high street goods and exchange controls enforced by armed police will be only the least of the ills.” There are now only three outcomes from the crisis: Greece stays in the euro on slightly more advantageous terms that were on offer before the referendum; Greece and the troika stitch up a short-term funding deal in the hope that a lasting solution to the crisis can be found later; or the creditors reject the olive branch held out by Tsipras and force Greece out of the euro. If it is the first, Tsipras will be seen as a hero in Greece. If it is the second, he will be able to say he forced the troika to blink first. If it is the third, he can say he did everything in his power to avoid a return to the drachma, but was left with no choice due to creditor intransigence. |