Macroscope | Greek referendum opens door to financial freedom

As an American baseball player said: ‘It’s déjà vu all over again.’ Four years ago, on 28 June 2011, I published an article urging George Papandreou, then prime minister of Greece, to hold a referendum to ask the Greek people if they wanted to remain in the euro.

‘Not every creditor deserves a break,’ I wrote. ‘They should have known it was risky to lend to Greece. Let them bear the cost.’

In October 2011, Papandreou announced his intention to hold a referendum that December, but was talked out of it. His party, Pasok, never recovered.

Four months ago I wrote to urge the new party in power in Greece, Syriza, to hold a referendum. ‘Like Papandreou, but with still greater urgency, Syriza can go back to the citizens,’ I stated. ’The government has to say, “We thought it would be easy to defy austerity. But we have found out that is not so. If we are to fulfil our promise to you, we have to carry out Grexit.”’

Alexis Tsipras, prime minister, called German Chancellor Angela Merkel and French president François Hollande at the weekend and told them he was planning a referendum rather than accepting the latest creditors’ offer. They tried to talk him out of it. He went ahead anyway.

Now the creditors have withdrawn their offer. The European Central Bank is freezing credit to Greek banks. The crunch point is here. Greek depositors are withdrawing money at alarming rates. Greek banks will be closed for an indefinite period and capital controls imposed.