Referendum in Greece likely to further polarise public opinion

One by one they came, smiling for the cameras, voicing optimism that this day had arrived: the day when Greeks could decide for themselves.

Any doubts that the left-wing government in Athens would cave in to the demands of the international creditors keeping Greece afloat were dispelled on Saturday as the great debt drama entered another act.

In scenes that spoke more of defiance than fear, leading Syriza party figures applauded prime minister Alexis Tsipras’s surprise decision to give Greek voters the final say over the terms of a bailout deal proposed by the EU and the IMF.

The high-stakes move of calling a referendum only days away from the deadline for a €1.6 billion loan repayment to the IMF may have raised fears of default, but in governing circles it was welcomed with glee.

"On July 5th, Greeks will have the opportunity to say a resounding 'no' to their brazen demands," deputy social security minister Dimitris Stratoulis told reporters before a parliamentary debate on the referendum. "And that will arm the government with a new determination to apply its programme. I am optimistic, very optimistic."

After several days of heated discussions in Brussels, the Greek prime minister returned to Athens late on Friday, rejecting the €8 billion worth of tax rises, pension cuts and wage cuts creditors had set as the precondition for the release of desperately needed bailout funds.

News of the referendum sent shudders through Greece. Since late 2009, when it became clear that, without help, the Greek economy was heading towards insolvency, the country has lost over a quarter of its GDP, and seen unemployment reach a record 27 per cent and poverty levels soar.

Fears that the population may now refuse to swallow the price of further assistance was evident on the streets yesterday, when depositors worried about imminent capital controls rushed to withdraw cash from banks.

‘Brittle’ mood

“The mood is very brittle,” said Giorgos Christodoulakis, a newspaper vendor. “There’s an element of uncertainty that has really unnerved people. If we do go ahead with this referendum, nobody can say for sure which way it will go.”

Takis Kanellopoulos, an employee in a fur shop in Plaka, the picturesque district beneath the Acropolis, said he was concerned that many would not understand the consequences of a No vote.

“Everybody I have spoken to today has said they will reject the proposals, mostly out of spite for the Germans,” he said. “But that could have devastating effects for our economy.”

The plebiscite, the first to be held since 1974, when Greeks rejected the monarchy in favour of becoming a republic, could be one of the worst mistakes the country has committed in modern times, analysts said.

Speaking to the Observer, Aristides Hatzis, a professor of economics and law at Athens University, likened the decision to "the government acting like a suicide bomber".

“It is a very risky decision that could jeopardise Greece’s position not only in the euro zone but the EU,” he said. “I thought Tsipras would be pragmatic and accept a deal that would ultimately have allowed him to consolidate his position on the moderate left.

“Instead, with this decision he has allowed his ideologue, Bolshevik side to take over. It is as if he wants to transform this country into Venezuela, but the problem is it would become a Venezuela without the oil.”

Catapulted into power on a platform to end austerity, the Syriza government vehemently denied that it was posing Greeks with the dilemma of remaining in the euro or returning to its own currency.

‘Kill off the country’

“They accuse us of wanting the drachma – there is no such thought,” said the health minister,

Panagiotis Koroumblis

. “But I defy any serious Greek to say that what [the creditors] have proposed is good for this country. If we adopt them, it will kill tourism, dismantle our pharmaceutical trade, totally demolish our productive base. We were voted in to end austerity, not kill off the country.”

But in an electric atmosphere, it was becoming clear that the referendum would further polarise the country between those who want to remain in the euro at any cost and those who now want out.

– (Guardian service)