Europe’s leaders say that Sunday’s Greek referendum is a de facto vote on the euro. But Athens insists that it is just about one specific offer. Meanwhile, the ballot paper itself is causing confusion, says Matthew Partridge.
What’s going on?
Greece is due to vote this Sunday on the package of further austerity measures offered to it by the European Central Bank (ECB) and the International Monetary Fund (IMF). The problem is that there is a disagreement about what a “No” vote would entail.
The Greek government has said that refusal will not necessarily lead to Greece’s ejection from the euro. Instead, they argue that the Troika (ECB, IMF and the European Commission) will simply have to offer another deal. The Greek finance minister has insisted that Greece cannot leave, threatening to use legal action to delay any attempts to force it to do so.
In response, virtually all eurozone leaders, including those in Italy and Spain, have warned that a no vote would lead to Greece quitting the Euro.
Who’s right?
Theoretically there is nothing preventing any country from using a foreign currency (in this hypothetical case, the euro) as its sole legal tender. Panama and El Salvador use the US dollar; other countries, such as North Korea and Zimbabwe, use a variety of currencies alongside their own.
However, if Greece was ejected from the euro it would lose any influence it has over the ECB, without gaining the ability to set interest rates or print money itself. Even if Greece was able to remain within the system, the ECB could shut down Greece’s banking system by refusing to extend any more liquidity assistance. Even with existing capital controls in place, Greek banks would only remain solvent for five days.
And the ballot paper?
The ballot paper for the referendum reads: “Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled ‘Reforms for the Completion of the Current Program and Beyond’ and the second ‘Preliminary Debt Sustainability Analysis’.”
That’s a heck of a mouthful, which is one of the criticisms levelled at the ballot paper. The other is the decision to put the “No” option above the “Yes” option, which is seen as an attempt to influence voters.
Are these criticisms justifed?
While the question is certainly longwinded, it is specific about what deal is being voted on. While Greek voters may not have read all the details, most will understand the basic issues involved.
But Katie Ghose, the chief executive of the UK’s Electoral Reform Society, says that “the UK’s 1998 Good Friday Agreement referendum question was notoriously complex, but people knew the underlying choice”. If the Greek government had proposed a simpler question it would be criticised for not being precise enough.
That said, the complexity of the question also leaves the result – whatever the outcome – looking a lot less clean-cut and open to interpretation by the Greek government than perhaps the rest of Europe would like.