Referendum a Weapon for Greece in Eurozone Debt Talks’

June 28, 2015

Reuters / Marko Djurica

Reuters / Marko Djurica

The Greek people now have the right to decide whether or not they want to accept more austerity measures in return for loans that have thus far failed to help the Greek economy, experts on the crisis told RT.

Athens has refused to bend to the demands by the Eurozone finance ministers to further cut pension payments or public sector wages, as well as the benefits paid to low-income pensioners. Yanis Varoufakis, the Greek finance minister, said the refusal of the finance ministers to endorse a request for an extension of the agreement will “damage the credibility of the Eurogroup as a democratic union of partner member states, and I am very much afraid that damage will be permanent.”

Aris Chatzistefanou, director of the ‘Debtocracy,’a documentary on the Greek debt crisis, spoke with RT regarding the breakdown in talks and the upcoming referendum.

RT: According to Eurogroup President Jeroen Dijsselbloem the door on the talks is closed. Do you think that’s true?

AC: Well, for the first time after 40 years, the Greek population has the right to decide how it will handle the debt and how it will handle the conditions with the lenders. It is obvious that the people who support these lenders – and it’s not only members of the European Commission, the European Central Bank or the IMF – they have a furious reaction. The same thing applies here for the corporate media and the politicians. They tried to create a situation and atmosphere of panic. They don’t want [the referendum] to happen and say this is the end of the collaboration with the European Union, something of course the Greek government never accepts. They just said, for the first time we give the right to the people to decide – the same as they did in Iceland.

RT: What do think the people are going to say in a week’s time?

AC: I believe they will say no to this new memorandum and this new austerity policy that the European Union and the IMF is trying to impose. People have understood very well that these so-called salvation periods just created more problems. Just to remind you, we had a debt of 115 to 120 percent of GDP, now it’s 180 percent. At the same time, almost 60 percent of the young people are unemployed; the infrastructure of the economy is compromised. People know about that and I think they are no longer afraid even of the chance of leaving the Eurozone.

RT: When your government came to power, it was never really thought that it would do without the EU, or was it in the cards that it could do something. What was the feeling behind the scenes?

AC: In my opinion, what the Greek government just a few weeks or months before the elections was practically impossible to get through to the Europeans; if you don’t have anything in your hands at the negotiation table, like a default or exiting the Eurozone, I don’t see why the lenders would agree to any better conditions for Greece. The referendum is a weapon the government can use and I think it is using it in the right way.

Greek government needs support of its people

RT also spoke with Felix Moreno, Trader and Portfolio manager at RF Trading, for his opinions on the upcoming referendum, as well as his view on the likelihood of a Grexit.

RT: What would be the purpose of holding a referendum if the Eurozone finance ministers said the talks are over?

FM: Well, if Greece is going to change direction, and if they are going to break with the EU, or if they have to default on their debt, or any major decision of that type, the Greek government is going to need to know that the public is behind them. So they can hold a referendum on the latest proposal, which has been taken back by the EU, or they can hold a referendum on Greece’s new direction, or they can do the first and use it for the second purpose.

RT: What if the Greek public comes back and says they agree to the demands [by the Troika], is it too late?

FM: I think it’s very unlikely that will happen, but if it did the government of Mr. Tsipras would have to resign and then we’d have elections and then we’d have a few months of no possible deal because there’d be no government to negotiate with. So it’s very difficult to see a deal being struck at this point.

RT: Whatever happened to Angela Merkel’s saying, “If there’s a will, there’s a way”? Has the will run out completely?

FM: I think the will ran out a few months ago, in January. They knew they were going to face this crisis, or a similar one, in the near future and they knew it wasn’t going to be the last one because after Greece there are other countries in the spotlight. They wanted to set a precedent, they wanted to play bad cop to give an example to any other potential debt defaults.

RT: Do you think there will be a Grexit?

FM: I think that is the most probable scenario. It’s not inevitable, but I think we’re going to see it in the next year.

Source: RT