Contrary to portrayals in the mass media that claim Sunday's Greek Referendum vote is essentially a vote on whether to accept the Troika's austerity condition in exchange for new liquidity options and for staying in the EU (YES) or to reject the offer and leave the EU (NO), Finance Minister Yanis Varoufakis says Greeks ought to vote NO on the referendum and remain in the EU with new bargaining power.
This may be too nuanced a choice for the average Greek, who will see this on his/her ballot Sunday:
from Yanis Varoufakis
- Negotiations have stalled because Greece's creditors (a) refused to reduce our un-payable public debt and (b) insisted that it should be repaid 'parametrically' by the weakest members of our society, their children and their grandchildren
- The IMF, the United States' government, many other governments around the globe, and most independent economists believe -- along with us -- that the debt must be restructured.
- The Eurogroup had previously (November 2012) conceded that the debt ought to be restructured but is refusing to commit to a debt restructure
- Since the announcement of the referendum, official Europe has sent signals that they are ready to discuss debt restructuring. These signals show that official Europe too would vote NO on its own 'final' offer.
- Greece will stay in the euro. Deposits in Greece's banks are safe. Creditors have chosen the strategy of blackmail based on bank closures. The current impasse is due to this choice by the creditors and not by the Greek government discontinuing the negotiations or any Greek thoughts of Grexit and devaluation. Greece's place in the Eurozone and in the European Union is non-negotiable.
- The future demands a proud Greece within the Eurozone and at the heart of Europe. This future demands that Greeks say a big NO on Sunday, that we stay in the Euro Area, and that, with the power vested upon us by that NO, we renegotiate Greece's public debt as well as the distribution of burdens between the haves and the have nots.
Should the deal draft that was put forward by the European Commission, the European Central Bank and the International Monetary Fund in the Eurogroup of June 25, 2015, and consists of two parts, that together form a unified proposal, be accepted? The first document is titled "Reforms for the Completion of the Current Program and Beyond" and the second "Preliminary Debt Sustainability Analysis."
Complicating the issue still further is that the "deal" in question actually expired as of midnight, Tuesday, June 30, and is no longer valid, no matter which way the Greeks vote.
Yanis Varoufakis has sworn to step down from office if the Greeks vote YES on the ballot proposal, believing (see #6 above), as do most economists, and now, even the IMF, that the debt must be restructured (i.e. partially written off) to have any chance of being paid at all. Many are betting that Tsipras and Syriza will follow Varoufakis out of office. The GREK - an ETF representing the Greek stock index - has jumped some 10% following Monday's >20% decline when Tsipras first called for the ballot referendum and essentially closed the door on the current deal. Several investment advisory sites and newsletters have advised buying the GREK in anticipation of a debt restructuring being eventually worked out, possibly with a new government in place.
Perhaps strangest of all is why Syriza, and in particular, Varoufakis, have not put forward a plan B, including proposals for supplementary currencies, such as Varoufakis himself proposed before he became Finance Minister, and which others have proposed as well, including me. A complementary currency, whether drachmas or something new like Tax Anticipation Notes (TAN) even if used only domestically, would give Greeks breathing room and an opportunity to work and create new wealth for their country. The increased taxes (which are still too undercollected and resisted) could be used to pay off some of the loans, once converted into Euros.
In the end, it may be a muddled understanding on an expired offer put forward by a government in trouble for an issue that's not really on the ballot, which decides not only the fate of Greece, but of the world.