This was a brave, almost heroic, vote. Greeks cast their ballots in the face of extraordinary pressure from the European elites. One after another, EU leaders had lined up to threaten them with disaster in the event of a ‘No’ vote.
The President of the European Parliament, Martin Schulz, went so far as to tell Greek voters that ‘salaries won’t be paid, the health system will stop functioning, the power network and public transport will break down’.
Had the campaign lasted another 48 hours, he’d doubtless have thrown in a plague of locusts and the slaughter of the firstborn.
It made no difference. In every electoral district, large majorities turned out to vote against the Brussels deal.
Greeks have learned to disregard what Eurocrats tell them. After all, when the EU assumed control of their economy five years ago, they were assured that some sharp pain would be followed by sustained recovery. Instead, they have known nothing but poverty, joblessness and emigration, with no end in sight.
EU leaders were so furious at the calling of the referendum — which, as one finance minister put it, entrusted complicated questions to ‘the common people’ — that they moved openly to oust Alexis Tsipras’s government.
In 2011, when Greece’s last socialist prime minister, George Papandreou, suggested a referendum, Brussels toppled him in what was, in effect, a civilian coup. Last week, it aimed to do the same to Tsipras and his Syriza-led government.
Greek banks were cut off overnight by the European Central Bank. Greeks were limited to taking 60 euros a day from their accounts — though, in practice, the shortage of banknotes meant they often couldn’t get even that.
The flagrancy was shocking. Greeks were told, in effect, that they wouldn’t see another penny, nor be allowed to discuss debt relief, as long as they stuck to the leader they had recently elected. Herr Schulz called explicitly for the replacement of Mr Tsipras by ‘a technocrat’.
Now I am no fan of Alexis Tsipras, a revolutionary extremist who only recently took the Che Guevara portrait in his office down. But he unquestionably won the last election fair and square.
Leftist writers sometimes compose dramas about popular progressive leaders being conspired against by foreign powers and bankers. For the first time in my life, that fantasy has turned out to be true.
To their immense credit, Greeks stood firm. As their grandfathers did in 1940, when Benito Mussolini told them to allow Axis troops to occupy their ports, they returned a one-word answer: ‘Oxi!’ — ‘No!’
The Brussels attempt to make Greeks vote almost under siege backfired. Plenty of Greeks who had not backed Tsipras at the election have now stuck to him in the face of what looked to them like foreign aggression.
Although the question on the ballot paper was long and technical, everyone understood, by polling day, what it meant. As Jean-Claude Juncker, the President of the European Commission, put it, Greeks were voting on whether to keep the euro. The economics have long pointed to a return to the drachma; now the politics point the same way.
The question is whether ‘Grexit’ will be negotiated amicably. Devaluation and default go together. When Greece leaves the euro, its new currency will lose perhaps half its value, which will double Greece’s foreign debts, making them even more obviously unsustainable.
Eurozone taxpayers stand to lose hundreds of billions of euros as Greece repudiates those debts.
In the long run, Greece has done the right thing. A new drachma will give the country a much-needed boost. The two biggest sectors of the Greek economy are shipping and tourism. Both stand to gain from a competitive devaluation.
In the short term, though, things are going to be tough. Some Greek banks will go under. Some savers will lose the value of their deposits.
Whether Greece gets through that immediate pain depends on the decisions of its ministers. A government that has just defaulted can’t borrow money, and must live within its means.
If Greece is serious about exploiting the advantages of its own currency, it will need to raise revenue through privatisation of assets, and boost tax collection by having lower, flatter and simpler rates. Whether Syriza is able to do these things, in defiance of its instincts, remains to be seen.
Much depends also on the attitude of the rest of the EU, which may seek to make an example of Greece. The last thing Eurocrats want is for Greece to prosper with its own currency, for this would encourage other eurozone states to follow its example. Cyprus, Spain, Portugal, Italy, even France might shake off the monetary union that has done them such harm.
Spain, in particular, has its own version of Syriza, the far-Left Podemos movement, which triumphed at the recent local elections.
While Greece accounts for less than two per cent of the eurozone’s economy, Spain is its fourth-largest member. A Grexit can be managed as a controlled explosion; but a Spanish exit would blow the entire monetary union to sparks and cinders.
So EU leaders will be in no mood to make life easy for Greece — whose leaders, in fairness, haven’t helped themselves by gratuitously insulting their German creditors. Things may turn ugly.
Then again, things were hardly rosy before. Just before polling day, the International Monetary Fund produced a report calling for massive debt remission in Greece. Disgracefully, the EU tried to repress it, fearing — correctly as it turned out — that it would boost the ‘No’ side.
The IMF was right. A country as indebted as Greece will never be able to pay its creditors. The quicker all sides admit it the better.
For the EU, though, this has never chiefly been about Greece; it has been about the euro. Instead of being allowed to default and devalue five years ago, Greeks were saddled with the cost of propping up the European banking system. In other words, the EU wasn’t bailing out Greece; Greece was bailing out the euro.
Not any more. The country has voted for independence, and freedom-lovers throughout Europe should cheer — especially, perhaps, in this country. British volunteers, led by Byron, were closely involved with Greece’s original struggle for independence two centuries ago.
What can we do to help? Well, one thing is to make Greece our holiday destination. The country has always been pleasant to visit; but, outside the euro, and effectively half-price, it will be even more attractive.
We should also look at how the EU has behaved over the past week. It has bullied, hectored, lied and threatened. It has sought to remove an elected government. It has placed the survival of the euro above the welfare of the people who use it.
Over the next year, these same Eurocrats will be threatening Britain with penury if we leave the EU. They will be supported by their British auxiliaries: those politicians and businessmen who were urging us to join the euro 15 years ago.
They were wrong then, and they’re wrong now. If little Greece can stand up to the system, so can we.
Daniel Hannan is a Conservative MEP
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