What was the point of Tsipras referendum?

http://blogs.channel4.com/paul-mason-blog/4131/4131

Friday 10 Jul 2015 by Paul Mason, originally published at Channel4

The new Greek government proposals, published late last night are clearly based on those submitted by Jean Claude Juncker last Thursday, before the referendum.

It’s left many Greeks frustrated, asking: what was the point of the referendum? It’s left many foreign observers saying the same.

Here are the most obvious answers:

First, the Greek government’s hope that a referendum mandate would allow swift negotiations with their creditors, and relaxation of terms, did not materialise. Instead a renewed ultimatum materialised. If they can’t meet it, the ECB and EU will collapse the Greek banking system and throw them out of the Eurozone. Indeed, one of the main “achievements” of the referendum was to flush out that clear threat, from politicians who had never admitted it before.

The Greek government has no mandate to leave the Euro, as the 61% vote No last Sunday was clearly won as a “stay in and fight” mandate.

Secondly, the deal makes no economic sense without debt relief. The referendum, combined with US pressure, seems to have prompted key European voices, including Angela Merkel and Donald Tusk, accede in principle to the need for debt reprofiling – which is a sneaky way of writing off debts.
Thirdly, it is still redistributive on balance. Syriza can still sell this as a very different programme from those previously designed by the conservative led coalition. 29% corporation tax is one example. However it does make concessions on pensions and on VAT on the islands, which currently enjoy a discount.

Fourth, it is the work of Euclid Tsakalatos. Tsakalatos, as I’ve been explaining since mid-January, is existentially committed to two things: Euro membership and the use of government to foster widespread modernisation and social change. He wants to stay in power – not lose it to a government of “technocrats”.

Fifth, the deal comes with a request for a loan to make Greece’s debt repayments over the next three years. If someone else pays your debts for three years, that is a very fiscally beneficial thing, and leaves Greece with money to spend it did not have.

Most importantly, this is not a done deal. If it gets through the Greek parliament and is then thrown back into the Greeks’ faces it will solidify and prepare Greek society for Grexit.

It will most likely prompt a few resignations from Syriza, but I am told the Left Platform in Syriza will mainly accept it. But getting it through parliament is not the problem. Getting it through the EU is the problem – and it’s left many Greeks still predicting this is the last gamble before Grexit.

– See more at: http://blogs.channel4.com/paul-mason-blog/4131/4131#sthash.Md7fQ07n.dpuf

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