ATHENS–The results of the referendum are in, but on the day after the vote, it isn’t clear that the results are as big a victory for Alexis Tsipras, the prime minister of Greece, as he might’ve hoped.
Tsipras stunned the world last month when he announced that he was taking a deal offered by the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) to the public for a referendum. In a series of rapid events, the ECB froze liquidity assistance, Greeks imposed controls limiting capital, and defaulted on a $1.7 billion payment to the IMF. The country’s banks remain closed. It is unclear at this point if they will reopen any time soon. For now, the ATMs are still dispensing cash, but no one knows how long that will last.
The big unanswered question: Will the ECB maintain a lifeline to the country’s banks or not? For now, the central bank has frozen assistance levels. That may change when European finance ministers convene in Brussels July 7.* (Correction: This article originally said the meeting date was July 6.) But what happens if they keep levels frozen indefinitely?
In the midst of all this, Tsipras’s political fortunes are cloudy. You’d think this would be a moment of triumph; he pushed for the “no” vote and his countrymen responded in kind, in a landslide. Roughly 60% of the population voted against the plan. But it isn’t that simple—he now has to come up with an acceptable agreement that people won’t interpret as too austere. And he has to do this before the economy goes into a meltdown.
Is it possible? It all depends on the negotiations. Last night, after his post-vote address to the nation, he tweeted:
He also made the point in a subsequent tweet and in his address that the issues of Greece’s debt sustainability will be on the table for the first time.
So is Tsipras a reckless revolutionary, a shrewd strategist, or a feckless fool interested in his own political career? Many people who favored the “yes” vote think he carelessly has taken Greece’s future to the edge of a cliff. “This isn’t Vegas,” said analyst and investor Timos Melissaris. “I wanted ethical politicians, not gamblers.”
Others think he was brave. “He is a leventis,” a Greek word meaning “gutsy,” more or less, said one 69-year-old retiree woman sitting on a park bench in the neighborhood of Zografou in central Athens. Eleni, as she wanted to be referred to, was quick to give her party affiliation—communist—but refused to give her full name.
Even some outside observers have been impressed with his audacious move against his creditors. “It took guts,” says New Yorker Tara Khaleel, a banker.
But his support, just a day after the referendum, even among those who voted “no,” doesn’t seem unconditional. As I wrote elsewhere, the mood in the city is somber and subdued, anything but triumphant. People seem terrified at worse, and cautiously optimistic at best. And for the most part, the jubilance viewers around the world saw on Sunday evening seems to have evaporated.
“It’s in God’s hands,” said Alexis Athanasiades, 45, a clerk at OK, a 24-hour convenience store here. “I voted ‘no’ because I am tired and I want something better for myself and my country. But I do not know how this will turn out. I can only hope.”
Hope springs eternal, of course. And the situation can still unfold in myriad ways, ranging from a Grexit from the Eurozone, and a return to the drachma to a new agreement, will be sealed in Brussels. How this unfurls will determine how Tsipras will be regarded in his country and the rest of the world. If the banks run out of money, and the economy collapses, a possibility is that Tsipras will be blamed.
But, what if Tsipras manages to pull off a new plan, albeit one with austerity measures, that will put debt restructuring, and possibly even debt relief, on the table for the first time, as he’s promised?
His decision to let the June 30 bailout program expire—even if it meant defaulting to the IMF, essentially wipes the slate clean of past proposals. The negotiations can start fresh—minus the provocative finance minister Yanis Varoufakis, who resigned abruptly on July 5. Maybe, just maybe, the chances for an agreement have now improved. Melissaris, who was so pessimistic before the vote, thinks so. “The path to a solution has opened,” he said in a phone interview.
The next hurdles: reaching an agreement by July 20, when the next debt payment is due. That, and keeping the cash flowing in the country’s banking system.
What will happen is anyone’s guess. The fate of Greece is in Tsipras’s hands—and whether he makes a touchdown, or fumbles the ball, will determine if he goes down in history as the bold leader who said “no” to the Europeans, or the reckless fool who brought about Greece’s collapse.