The Greek referendum will change nothing. Greek voters already expressed their great dissatisfaction with the bailout packages when they elected Syriza to power in January. The proposition they were asked to vote about now does not exist – and the referendum was just a sham. The bailout agreement that Greece and its creditors battled over for the past half-year is a dead parrot; it has ceased to exist.
And yet the referendum result may change everything.
It has made it close to impossible for euro governments to aid Greece with more money. While other leaders can backpedal their statements in the past week that the Greek referendum was really about its future in the euro club, it is difficult to find any political logic that takes the parties from here to a new arrangement that brings calm. The small amount of trust and goodwill that existed a week ago is almost depleted. Alexis Tsipras has tied his hands harder. To save his country from euro exit and the even harsher austerity that inevitably would follow from Grexit, Tsipras now needs more money than he previously asked for. The fiscal deficit is growing again and the past weeks have taken a heavy toll on the banks. They will need to be recapitalised. But Tsipras won’t be able to move closer to the creditors because it would be seen as surrender.
Whatever the outcome will be, it won’t happen fast. Greece now makes a bid for a new package of assistance from the European Stability Mechanism, but it will take weeks to negotiate and will still come with the same strings attached.
Grexit was always going to be a drawn-out affair, inflicting heavy economic damage on Greece. If it happens now, it will be a chaotic version of an exit, keeping Greece shut not just from capital markets but from the international payment system that greases the wheel of trade.
Tsipras has shown he is willing to take that path. His big miscalculation, however, is that the referendum has given other euro governments the electoral excuse for not trying to stop him. Other governments will not pull the trigger; they won’t force Greece out of the euro. But the political price of getting in the way of Tsipras has become higher. A few months ago, other euro leaders would have been punished if they allowed Greece to slip out of the euro. But the political capital Syriza gained by winning the election so resolutely on an anti-austerity message has been squandered. The referendum, and the dogged way Tsipras played the campaign, is just a signal that this account, along with so many other government accounts, is now empty.