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As the old adage goes “the only way to go is up after rock bottom,” Greece seems unable to stop pushing its economic limits. Despite its previous bailout programs designed jointly by the IMF, ECB, and European Commission, relief arrived coupled with harsh measures. Austerity packages were the fine print for Greece’s lending agreement; yet, unemployment has checked in at 25% this year, while most of the bailout money went toward settling international debt rather than jump-starting the economy. It is perhaps this ineffective past experience that has left Greece resentful toward the idea of another double-edged bailout measure, which is why Greece is currently celebrating its new-found and likely brief freedom from dependence on external problem solvers.
The referendum in question, basically asking Greece’s citizens to vote either in favor of or against an international bailout, was rejected with a 61.3% majority popular vote on July 5th. Realistically, voting ‘no’ was designed largely to give Greece more power for its next round of negotiations. It does not necessarily mean a departure from the EU or ditching the euro, but there is a lot more elbow room for the Syriza government to fulfill its promise of lessened austerity measures. Renegotiation is what Greece’s creditors - Germany in particular - expect in coming weeks. Voting "no" ultimately yields the same result for Greece, so what was the upside to this result?
Economically quarantined by the rest of the EU, Greece appears to many to be primed for its exit from the shared currency system, or as many are putting it, a ‘Grexit’. But considering that this would be uncharted territory and no provisions have been accounted for such a situation, a Grexit seems too much of a hassle, even if it does become more viable in coming months.
Greece exiting the EU is predominantly governed by speculation right now, but the notion that its government has a little more leverage, and time, is quite reassuring for weary creditors and EU members alike. Despite PM Tsipras's supposed victory in the referendum, the fact that Greece is running out of money has not changed. Athens may be celebrating, but the rejoicing is reasonably disproportionate considering the banks are still indefinitely shut down. At this point, it is difficult to know the exact details of Greece's renegotiated proposals, but its creditors want a swifter method of recompensation, while evading further descent into deficit. Ostensibly, the end result will be more money lent to Greece's economy. But with renegotiated conditions and a restricted influence on the new proposals, this should not be another quintessential bailout which leaves Greece and its citizenry with nothing to show for its recent progress.
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