An uncertain certainty

Greece’s ‘no’ to bailout terms. What nextIJ 

With the people of Greece voting negatively to the bailout terms that the European Union had set for the country's deeply troubled economy, the stage is set for a fresh round of crisis not just in connection with the beleaguered nation's fiscal revival but also in the European Nation as well. The public referendum is being interpreted as a slap on the EU's face and a successful attempt by Prime Minister Alexis Tsipras to call the Union's bluff. It is possible that the ‘no' referendum will be used to garner political capital by the Government in Athens, but such attempts will serve only a very limited purpose. By voting negatively on the bailout conditions, the Greeks may have demonstrated their ‘sovereignty', but defiance has done little to address the core problem — in fact, it is not only a problem but a monumental disaster that's round the corner. The task before Mr Tsipras is to carve out a new roadmap to bring his country out of the financial morass. Until now, he had managed to pull along with a string of financial helps from the West, particularly the EU. But now that Greece has defied its benefactor of years, it has to find an alternative. Of course, it is not yet clear whether Greece will pull out, or be thrown out, of the EU. But given Sunday's vote, it is difficult to imagine whether the old arrangement in toto will remain in place. There is pressure from within Greece and among EU countries for the former to exit the Eurozone, put in place its own currency and draft an economic revival plan that addresses the country's unique and severe problems. 

The referendum itself leaves no scope for ambivalence. More than 61 per cent of the over 62 per cent who voted, have opted for ‘no' to the EU's bailout conditions. But the situation is not just of this or that. Prime Minister Tsipras has to contend with the political fallouts as well. His Finance Minister has quit following the referendum results, and there could be other tremors as well in the coming days. The negative vote has come not just on the back of an anger that the Greeks feel about the ‘humiliating' terms that the EU had been proposing, but also from a belief that Athens can offer a more alluring solution. If Mr Tsipras fails to deliver on tthose hopes, he will face the music.

Meanwhile, sections within the Government believe that the negative vote does not necessarily mean that Greece will exit the Eurozone. They see the referendum result as a way to send across the message that the terms presented to Greece for continuing to get financial aid must be ‘respectable'. It can be argued that Athens really does not have much of a choice when it is fighting with its back to the wall, but even so, it would be politically disastrous for any Government to bend beyond a point. Moreover, the European Union itself will not be as unaffected by Greece's (speculated) exit as many would like to believe. The economic fallouts of that decision will be severely felt by other countries, and beyond the West. This is why the EU is still treading cautiously and hoping to continue its engagement with Greece, regardless of the vote and the many defaults by Athens in repaying its dues. Meanwhile, whether ‘democracy' has replaced ‘fear' in Greece, as the Prime Minister says about the vote, remains debatable.