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This afternoon Greek PM Alexis Tsipras addressed the country reaffirming his commitment to next sunday's referendum, where the Greek people will have to vote on... stuff. Nobody is quite clear on what the referendum is really supposed to elucidate, as the previous bailout conditions are off the table after Greece failed to pay back 1.8bn € in due time. This is after a letter started circulating by which Tsipras would allegedly accept the latest proposed terms of the bailout, with some amendments. Tsipras has stressed that a "no" vote, for which he is campaigning, doesn't mean Greece would leave the Euro, as some have suggested. Should he lose the gamble, he may be forced to resign, by his own admission. German Chancellor Angela Merkel wants to wait until after the referendum to start a new round of talks, French President François Hollande wants to reach an agreement before the referendum. At any rate, it appears that the referendum itself will solve little regardless of the outcome because after years of austerity and cuts, the Greek economy has shrunk and can no longer sustain the debt, at least in the opinion of one Paul Krugman (Boo! Hiss!). It is more of this austerity (pensions cuts, VAT raises) that the Greek government and the troika disagree on. As I'm sure you all know by now, Greece has been suffering capital flight since SYRIZA won the election on january, and after defaulting on the june 30th payment, things have reached a breaking point with banks closed since monday and limits of 60€ per card and day being imposed on cash withdrawals in an attempt to avoid a total financial collapse. What seems to be at stake here (other than the future of millions of Greeks, obviously) is the stability and continuity of the Euro as a currency, as nobody really knows what a contagion could bring, and potentially, of western Europe as a political entity itself. As Chancellor Merkel put it four years ago: "Nobody should take for granted another 50 years of peace and prosperity in Europe ... that's why I say: If the euro fails, Europe fails". Fun times.
