The “Grexit” Referendum.

The Flag of Greece.
The Flag of Greece.

July 6th, 2015.

Updated-Referendum Results – Anti Austerity “NO” Vote Triumphs.

The pro Syriza “NO” vote won more than 60% of the votes cast.Large crowds celebrated in the streets of Athens in response to the result but the Banks remain closed and big trouble looms in the near future.

The Syriza Finance Minister Yanis Varoufakis has resigned in order to help Greece negotiate a new deal with their EU debtors.  Varoufakis was seen as an impediment to a deal because of the hatred he inspires in the EU technocrats. Syriza came to power with only 36% of the vote earlier this year so the vote is a massive re-endorsement of the Syriza anti-austerity position..

The Syriza leadership clearly believe that the Greek people want to stay in the EU and will not initiate an exit from the EU instead daring the Germans and the other major debtors to renegotiate the terms of Greeks debt position or force Greece to leave.

The Greek banks are closed and will remain so until either a new deal is done or Greece exits the Eurozone.

Syriza are promising that a new deal will be achieved soon but the situation is not completely within their control.

Varoufakis resigns as Greek finance minister

The “Grexit” Referendum.
Today the long suffering citizens of Greece are voting in a snap referendum on the nation’s political future. If the referendum receives the “yes” vote the current anti-austerity Syriza government led by Alexis Tsipras will resign. That is clear.

If the referendum receives a “No” vote, Greece may begin to leave the European Union and may switch to the former national currency the Drachma from the Euro dollar although the precise consequences of the “No” are unclear.

The Greek economy has collapsed in recent years after the European Union forced the Greek government to make harsh austerity cuts. There was clearly a need for Greece to get their budget balanced, something that has now been achieved, but the austerity measures have clearly been counter-productive leading as they have to a mammoth economic contraction.
Common sense dictates that if the Greeks are ever to be able to repay the 300+ billion plus Euro debt they owe to the European Central Bank and other major international institutions the Greek economy is going to need to grow along with the tax base. A shrinking economy is clearly not going to be remotely capable of repaying the debt. Yet this is the consequence of what has been imposed.
The European leadership seem to have been trying to make an example of Greece, to serve as a warning to the other heavily indebted and far larger Southern European states Italy and Spain..
If the Greeks default on their debt and walk away, the Bankers cannot do much about it beyond no longer lending Greece any money or charging exorbitant interest.
The Greece are seemingly pained by the idea of being thrown out of Europe, in the event of their leaving the Euro currency yet the nations of the Euro zone are clearly at best indifferent to the suffering their policies have caused and were insisting on deeper cuts still to the Greek state despite the clearly counter-productive economic effects. Whatever loyalty the people of Greece feel for the European Union is clearly misplaced.

Whether it is the will of the people or not, a”yes” vote in the referendum, acceding to fresh austerity demands and the resignation of the Syriza government seem probable.

Even the IMF Advised Against fresh Austerity Measures in Greece.

The IMF strangely recently released a far more sensible plan for Greek’s economic future proposing that the Greeks be allowed to defer repaying their debt by twenty years and that debtors will have to take a large “haircut.” of thirty percent.

Greece: Preliminary Draft Debt Sustainability Analysis (DSA); June 26 2015; IMF Country Report No. 15/165 – cr15165.pdf

This is a sensible and obvious idea that should have arisen years ago. Clearly Greece has been the victim both of incompetent and profligate politicians and predatory bankers loaning money irresponsibly.So far only one side has been made to account for their errors, that is unjust and the punishment imposed upon Greece has been completely irrational and destructive and it can only be hoped that Greece leaves the Euro currency if not the EU itself. It was never in the interests of Greece to have the same currency as Germany,  it is that simple.

Anything other than a “No” vote to fresh austerity measures today will mean years of futile misery for the people of Greece at the hands of the predatory Euro bankers and their political sidekicks. The Bankers would not have it any other way.