Resounding ‘No’ Sharpens the Divide Between Greece and the EU / Dr Angelos Chryssogelos

The strength of the referendum result makes an agreement between the Syriza government and European institutions almost impossible.
People celebrate the 'No' vote in front of the Greek parliament on 5 July 2015. Photo by Getty Images.

It is important to remember Prime Minister Alexis Tsipras’ promise to the Greek people ahead of Sunday’s referendum, ostensibly on a since-expired bailout deal from the country’s creditors, but widely seen as a plebiscite on austerity. He had said that a No vote would strengthen his hand in upcoming negotiations, and that it was not be used as an excuse for complete rupture with Europe. Days before the vote he made his promise even more specific: he said he could deliver an agreement in ‘48 hours’. While yesterday’s cohort of No voters undoubtedly contains devotees of the drachma and hardcore supporters of Greece’s exit from the EU, the bulk of the 60 per cent that delivered a resounding ‘No’ is made up of people who expect from him to pursue an agreement with Greece’s creditors that keeps the country in the euro. The key question now is whether Tsipras can deliver on that promise.

As it stands now, this seems extremely difficult. Indeed, one can argue that the result of the referendum was probably too good for Tsipras’ liking. The referendum was a way for the prime minister to escape a set of twin pressures. Externally, he appeared to feel, rightly or wrongly, that Europe was treating him unfairly, pushing on him ever stronger deals with the aim of toppling him. Domestically, he knew that any agreement would face a difficult time with the hard-left contingent of his own party. But rather than easing them, the outcome of the referendum actually increases both these pressures.

Pressure from both sides

Tspiras argued that a ‘No’ vote could give him a strong mandate to ask for specific concessions from the creditor institutions (chiefly a scheme for public debt reduction). But strong words on both sides have created a toxic political climate in the eurozone, with the Greek government is no longer seen as a credible partner by key players – either in the ongoing negotiations or as an implementer of austerity measures in the future. A reinforced and confident Tsipras is someone who other European governments will find it very difficult to deal with. If he were hoping to strike to deal, a more humbling result (a Yes or a very close No) could have made him a more palatable interlocutor with Europe.

The referendum result does not solve Tsipras’ problem with his own party either. The decision to go to a referendum was essentially a way for Tsipras to spare Syriza the drama of having to vote an austerity package in parliament, during which there was the very real chance that the party would split. But Syriza led the ‘No’ campaign and now identifies with the 60 per cent of the Greek electorate that resoundingly rejected austerity – and, in the view of party hardliners, also rejected the view that Greece should stay in the eurozone regardless of the sacrifices required.

A close Yes or No result would have sent the signal that a willingness to stay in the eurozone was the dominant view in Greek society. Even if Tsipras pursues a new deal, his party will remind him that it is now collectively committed to achieving a deal that is substantially better than the one the Greek people just rejected. But it is more likely, if he even gets his European partners to talk to him, that Tsipras will get a much harsher deal than the one put to the vote.

No good answers

All in all the result of the referendum has made an agreement between the Syriza government and Europe all but impossible, at least over the next few days. Yet with the Greek banking system crumbling, time is of the essence. Without an agreement, Tsipras faces either a collapse of the banking system and a perhaps violent exit from power, or the decision to bank on a strongly divisive and anti-European discourse that will further stoke nationalism in Greece and will allow him to stay in power. In the first case, a new government would seek to halt Greece’s exodus from the eurozone amidst a complete economic meltdown. In the second case, Tsipras or a more radical Syriza leader would decisively drag Greece away from Europe and towards permanent poverty and political authoritarianism.

Dr Angelos Chryssogelos

Academy Senior Fellow, Europe Programme

Chatnam House


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