Why has the Greek prime minister Alexis Tsipras finally called a referendum?
Even as Tsipras signed the latest set of Greek proposals, the European institutions remained determined to subject him to a genuine humiliation exercise, demanding that he go still further, beyond what he could handle politically: it had become clear that his own party, his parliamentary majority and even a growing part of society were not ready to accept any more concessions.
The Greek situation — having perhaps outlived the term “crisis,” now that it has taken so long to unfold — appears to have finally reached its terminal point. This is, of course, an illusion: It has been at its terminal point for a long time.
The terminal point is the juncture where neither the Greeks nor the Germans can make any more concessions. In Greece itself, the terminal point is long past. Unemployment is at 26 percent, and more than 50 percent of youths under 25 are unemployed. Slashed wages, particularly in the state sector, affecting professions including physicians and engineers, have led to massive underemployment. Meanwhile, most new economic activity is occurring in the untaxable illegal markets. The Greeks owe money to EU institutions and the International Monetary Fund, all of which acquired bad Greek debts from banks that initially lent funds to Greece in order to stabilize its banking sector. No one ever really thought the Greeks could pay back these loans.