What is at stake in the referendum?

The decision by the prime minister to call a referendum leaves the Greek citizens with a stark choice. The core of the question is whether Greek citizens will be ready or not to accept that in a monetary union financial assistance and solidarity are only extended if – in turn –the recipient accepts jointly agreed conditions. This is the core of the debate of the last months. It is this principle that the creditors will not be ready to give up – also because of their conviction, that a monetary union requires binding commitments and constraining institutions. 

A “no” will mean that no other euro area government will want to justify any further assistance to Greece to its electorate. Nor would the ECB think it had the mandate to support Greece with additional ELA credits. A “yes” will lead to new negotiations. In my reading, the political will to improve the conditions for the Greek citizens by providing an investment programme as well as ease the debt burden has increased. However, it is clear that creditors will continue to demand a tough programme with still high primary surpluses, but also significant efforts to lower economic rents, fight corruption, improve the public administration and work towards a fairer tax system. 

A “yes” would give the prospect of staying in the euro area but conditions will not be easy. A “no” will result in Grexit with an uncertain future and high costs to Greek society, at least initially. If I was Greek, I would vote “yes” in the understanding that better conditions by creditors are the other part of the deal. 

A version of this opinion piece will be published on Kathimerini on 3 July 2015.