Today I say, “Happy 4th of July, United States.”
Tomorrow I say, “Good Luck, Greece.”
Today is the 239th anniversary of the Declaration of Independence.
Tomorrow is Referendum Day in Greece, the first since 1974, and first day of only God knows what for Greece. Its people certainly have no idea what lies ahead and nothing coming out of its government suggests there’s much of a clue lurking there either.
To begin with, no one—including Greece’s Prime Minister—seems to have any idea what the Referendum is all about.
Officially it’s a vote on whether to accept or reject a bailout proposal from the vilified Troika of lenders, but the proposal has expired by its terms and is no longer on the table. Technically there is nothing to vote for or against, but the government refuses to withdraw it. The opposition parties have taken the opportunity to cast it as an up or down vote on whether Greece wishes to remain as part of the European community: A Yes vote (NAI) keeps Greece in, a No vote (OXI) does not.
The government came up with the Referendum as a means of passing on to the people a decision if made by the government would put it at odds with its election promises against continuing austerity measures. It linked its preferred vote to the highly symbolic word OXI—the one-word answer delivered by Greece to the Italians who’d demanded Greece’s surrender to Italy and Germany at the beginning of WWII. To make its position even clearer to the electorate, the government reversed the customary form of the ballot by placing the box for voting NO above YES.
But what specifically are the people voting for? The government keeps shifting its stance on that, but one thing remains clear: a vote for OXI is a vote for the government in power. Meaning a NAI vote is against them. And that, dear reader, is what this has come down to. Whether or not the government wants to see it that way—or intended it––that’s nevertheless what it has come down to in the minds of the Greek people.
It’s also how Greece’s lenders see it, and they are waiting until after tomorrow before reengaging in any further bailout talks.
Some think the current Greek government is so hungry to stay in power it will cling on even if soundly trounced by tomorrow’s vote, but that will be hard to pull off in a civilized manner. Indeed, Greece’s controversial Finance Minister has made it clear that if a YES vote prevails he will resign. I’m sure he sees that as an incentive for voters, just not sure which camp is more motivated by his promise.
Bottom line: the bailout has expired, but as I wrote last week, this is one long Kabuki play of a negotiation. Europe does not want Greece out of the EU or off the Euro and nor do the majority of the Greek people. There are more scenes left to play out. Just not sure of the cast.
But overall, I still believe the biggest risk to Greece is not the financial stigma it’s enduring—that will pass in time—but in galvanizing its citizenry along OXI and NAI lines it is edging old fault lines to the surface, and responsible leaders should be wary.
Bloomberg ran a story that Paddy Power, Ireland’s largest bookmaker, said Wednesday, “We’ve seen enough to be convinced,” and paid out winnings four days in advance of the election to gamblers who bet Greece will vote YES on July 5. The story reported that “Gambling companies routinely pay out early on sporting events when they regard the result as a foregone conclusion, in part because it draws publicity and in part because gamblers often recycle winnings into other wagers.”
Ironic, isn’t it, how a government said to be run by academic games theorists gambling with a nation’s future doesn’t even have the confidence of its own kind.