Paul Krugman thinks that the Greeks should vote “No” on Sunday, for three reasons :
First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done.
Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way.
This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.
So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.
Krugman is right: this is about power. It is also about what happens when democracy collides with the power of the financial system. In that sense, I’m reminded of the 2006 elections to the Palestine Authority. The West clamoured for these ‘democratic’ elections. But when Hamas won, suddenly the game changed. The Palestinians had delivered the ‘wrong’ result. Same happened when the Lisbon Treaty was put to the Irish people for ratification in a referendum. My countrymen voted it down. Again, wrong result, so the question was put again, and one had the feeling that the government would have continued putting it to the vote until an exhausted populace eventually caved in.
Which of course neatly illustrates the profoundly undemocratic nature of the European project as it has evolved. There may be all kinds of good, bad and pragmatic reasons for wanting to be in the EU, but democracy ain’t one of them.