Advertisement

Editorial: Hard choices for Greece

 
Greek voters chose the worst of two bad options Sunday in rejecting the austere terms of a new and much-needed bailout plan.
Greek voters chose the worst of two bad options Sunday in rejecting the austere terms of a new and much-needed bailout plan.
Published July 6, 2015

Greek voters chose the worst of two bad options Sunday in rejecting the austere terms of a new and much-needed bailout plan. With the economy on the verge of collapse, Greek's leftist government now has only days to convince international lenders that the country deserves a more balanced reform package. That is a much tougher sell now after Sunday's populist revolt.

With 61 percent of voters rejecting the deal, the outcome reflected both the sense of denial within Greece of the seriousness of the economic crisis and the murky future ahead if Athens fails to bring immediate stability to the banking system. Though the banks have enough cash to muddle through the next several days, the uncertainty has caused panic for businesses, pensioners and ordinary citizens. Greece is expected to offer a plan at today's emergency meeting of eurozone leaders for restarting talks with creditors. But even the best hope is for an interim package that can keep the country running on a shoestring for a short period of time.

Though the government of Prime Minister Alexis Tsipras, which came to power in January, insists the "no" vote will bolster's Greece's leverage with creditors, the opposite is more likely. By rejecting new limits on spending and provisions for higher taxes in exchange for financial aid, Greek voters lessen the pressure on their government to make the reforms — from cutting the public payroll to cracking down on tax cheats and corruption — that are necessary to restore investors' confidence in Greece's economy.

The same people dancing in the streets after Sunday's vote were lined up outside the banks on Monday. Germany, France and the other major players have a stake in keeping Greece firmly in the European fold. But Greece also needs to enter this week's negotiations with a realistic take on how far the eurozone and other international lenders will tolerate an inefficient economic system. Five painful years have understandably fatigued Greek voters and inflamed nationalist passions. But any examination of forgiving debt or extending new credit must also include a frank acknowledgment of the reforms that Greece must commit to — and in a timely manner. This is a test of national leadership as much as of European unity.