Debt dispute escalates

Alexis Tsipras has described the decision of the parliament in Athens to hold a referendum next Sunday on the troika's austerity demands as an important step for his country's democracy. The conservative business paper Naftemporiki has its doubts: "The prime minister has chosen the path of a referendum as the supreme democratic process that is to bring a solution for the country in this critical moment. But will it really fulfil this purpose? … The vote on an agreement that has not yet been concluded and which entails dozens of tax measures and other complicated issues, the details of which we don't know and can't understand can't be formulated in one clear question. … To enable the citizens to assume responsibility, the government - and above all the rest of the political world - should explain responsibly and honestly what the consequences of a Yes or No vote will be."

The finance ministers of the Eurozone have played right into the hands of Greek Prime Minister Alexis Tsipras by insisting that the bailout programme expire this Tuesday, columnist Wolfgang Münchau writes in the liberal Financial Times newspaper: "By far the biggest tactical error committed over the weekend, however, was the rejection by eurozone finance ministers of a five-day extension of the Greek bailout programme to beyond the referendum. With that decision, they foreclosed the only way to keep the show on the road. They have unwittingly strengthened the political argument of the Greek prime minister. He will now be able to say: first the creditors wanted to destroy the Greek economy with their austerity programme. And now they are hoping to destroy Greek democracy."

Greece's looming state bankruptcy is an admission of failure on the part of Europe, the liberal daily Kurier writes: "The country's economic output has sunk by one third. Those who still have work earn around 50 percent less. Three million Greeks have no social insurance. A quarter of the population and over half of its youth are unemployed, many since the start of the crisis. ... The social misery has long since peaked. Now the Greeks are facing total bankruptcy. No one believes this will solve a thing. Rather it is much more likely that the Greeks' plight will only worsen. And all that because we insist on squeezing the last penny out of a country that's already lying motionless, even though it makes no sense from either a humanitarian or an economic point of view . When the EU politicians really want to, they can find solutions. They've proven that often enough since 2009. Ultimately our message - bailing out banks with hundreds of billions? yes; rescuing states? no - endangers the EU project and the euro far more than corrupt Greeks ever could."

After the announcement of a referendum in Greece, the conservative daily Die Welt sees a Grexit as likely and helpful: "For the first time since the start of the debt crisis there is a real and - judging by the financial markets - manageable possibility of a Grexit. This step could prove liberating for both sides for many reasons. … With their own currency [the Greeks] have better long-term economic prospects and will regain at least some of the sovereignty they so sorely miss. In other euro states there may be opposition to the consolidation policy, but the view prevails that only a competitive Europe has a future. It is not Merkel's euro course that has failed, but the repeated attempts to make the indispensable prerequisites for membership of the monetary union attractive to Greece."