the Greek crisis and the coming referendum

The intelligent, always sensible Martin Wolf sees no way out for Greece – at least no easy way out, given the choices available.

How would I vote in the referendum on the eurozone’s economic programme if I were Greek? The answer, alas, is that I am unsure. ….

In making my decision, I would bemoan both the idiotic leftism of my own government and the self-righteousness of the rest of the eurozone. Nobody comes out of this saga with credit. ….

The Syriza government has failed to put forward a credible programme of reform that might solve the multiple problems of the Greek economy and polity. It has instead made populist gestures. ….

Yet the eurozone, too, deserves substantial blame for the outcome. One would never guess from its rhetoric that Germany was a serial defaulter in the 20th century. Moreover, there is no democracy, including the UK, whose politics would survive such a huge depression unscathed. Remember, when Germany last suffered a depression of this magnitude, Hitler came to power. ….

So I, as a Greek voter, face a choice between the devil and the deep blue sea. The devil is familiar: the never-ending demands of the eurozone for further austerity against which my people voted in the last general election. The deep blue sea is sovereign default and monetary sovereignty. If I am Prime Minister Alexis Tsipras, I think there is a third way — endless bailouts and few conditions. But I am sure he is deluded. So which would I choose? Being cautious I would be tempted to stick with the devil I know. but I might well do better to risk the sea.

Martin Wolf, “The difficult choices facing the Greeks“, Financial Times, 1 July 2015 (metered paywall).

I would risk the deep blue sea, but this is a decision that Greeks themselves have to make. I agree with Martin; Greece realistically must choose between two paths: exit from the euro, or continued austerity.

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