After the 'No' Vote, Can Greece Remain in the Euro?

An anti-austerity demonstrators attend a rally in Trafalgar Square in central London on July 4, 2015 in solidarity with those
An anti-austerity demonstrators attend a rally in Trafalgar Square in central London on July 4, 2015 in solidarity with those voting 'No' in Greece's forthcoming referendum. Greece braced itself Saturday ahead of a make-or-break bailout referendum as polls showed the 'Yes' and 'No' camps neck and neck and uncertainty rose over the future of the country's battered economy. AFP PHOTO / JACK TAYLOR (Photo credit should read JACK TAYLOR/AFP/Getty Images)

I am the grandson, son and brother of three Greek Prime Ministers that have devoted their lives to the ideals of democracy. A central theme in their worldview was that deepening the institutions of democracy, a paramount end in itself, is also the best means to a flourishing and vibrant economy.

Time and again, government after government, we have been promised the freedoms of democracy and the flourishing economy that institutions of democracy brings. And each time we have not wavered from wanting these freedoms and ideals. Each time our governments have failed us. Each government has vigorously promised to fight corruption, clientelism and tax evasion. Each government has promised far-reaching reforms. Many of these reforms were those being proposed by the hated loan agreements. The same reforms that Varoufakis found mostly agreeable, at least 70 percent of these, against the strong anti-reform position of Syriza. We never hated the reforms though we knew many had reason to resist them. We hated the medicine that we mistakenly associated with the reforms: austerity.

We know that our long-term prosperity lies in these reforms and other reforms that derive from being part of the EU. Most of these reforms are the nuts and bolts that at any given time uphold the ideals that we aim for. They may not all be right for us, or right at this time, and this is the debate we need to keep having with our fellow Europeans. This is one of the areas we need to apply our skills of negotiation and persuasion. This is the good fight, but it needs to be held within the moorings of the imperfect democracy that is Europe.

The reason that we cling to Europe, the EU and the Euro despite all our suffering and however much we attribute to their poor handling of our present predicament, is that with all the disillusionment we have in the capacity of our own governments and our institutions, imperfect Europe remains our beacon of hope.

Any party wanting a chance to govern our country knows this all too well. Syriza was not always in favor of the Euro and it has always been an ambivalent supporter of the European Union. Syriza in opposition belatedly recruited an eloquent and visionary outsider who strongly advocated the European ideals and for Greece's position in the Euro. This shift in Syriza's stance and Tsipras' promise not to risk Greece's place in the Euro was key to its electoral success. This is the contract he made with the people. It's about democracy.

Once elected the entire country came to his support in the difficult task of negotiating with the EU. The costs of these negotiations have already been great. A stalled economy has meant that from a point of growth we are now back into a downward spiral.

But here comes the irony and the insult. After five months of mostly grandstanding and shadow boxing. After signing a proposal that in terms of austerity was identical with that of the Troika, Tsipras realized that he could not get his own party to pass his proposal. He called for a referendum in the name of democracy. In so doing he broke the single most important promise he gave to the Greek people. The promise that he would not risk Greece's position in the Euro and the EU.

He could have called a referendum at any earlier time. Instead he chose to break off negotiations and call a referendum after the expiry of the existing loan agreement. The only time that he knowingly put Greece's position in the Euro at risk. In so doing he also broke all rules of a democratic referendum. He set the time for discussion to one week with closed banks just before cash would run out and calamity would ensue. The very calling of the referendum dramatically weakened the country. He offered people to vote on a complex interim proposal that was no longer on offer. He asked the people to give him negotiating strength by voting "NO" to the proposal. But he always had the support of the people and the opposition parties to negotiate. He had national unity to attain a good deal, but with this referendum he is reviving old and nasty divisions.

The Deputy Minister of Finance Tsakalotos said that Tsipras called the referendum because he could not get the proposal past his own party. But if that was the case he should have been seeking for a "YES" vote. A "NO" vote would only strengthen the hand of his anti-Euro internal opposition. A "NO" vote would make it much harder for him to achieve an agreement that could pass in parliament.

So here's the the problem. Tsipras had nearly all Greeks united in his efforts to seal an agreement with the EU. You can't get much more negotiating power than that. What Tsipras always lacked was the presumed ace in the negotiating hand. A threat to leave the Euro and the EU. The nuclear option. This is the one thing Greeks have consistently denied everyone seeking to represent them. Throughout the negotiations this threat has been implicitly used to the consternation and fear of many, but most continued to believe that it was always a bluff. But there's the rub with threats. As any good game theorist knows, if a threat is not credible it wont fly.

If Tsipras needed a referendum to force an agreement against the wishes of his anti-Euro internal opposition, shouldn't he have asked the people to vote "YES"? Won't he strengthen his internal anti-European opposition by getting a "NO" vote? Won't he strengthen Golden Dawn and his extreme right-wing coalition partner Independent Greeks who are adding their votes to the "NO" option? Isn't he putting the country's position in the Euro at risk?

Prominent and Nobel Laureate economists and thinkers have understood the "NO" vote as a vote to leave the Euro. Should I be mistaken in believing them? Should I not at least worry that the risks of leaving the Euro increase with a "NO" vote?

Even though I strongly disagree with these economists about the merits of leaving the Euro, in large part because I have associated the imperfect Euro and EU with anchors to the ideals of democracy for my country, I respect their views and their convictions. I also respect their knowledge and honesty when they say that a "NO" vote means that we will most likely have to leave the Euro. I only wish that Tsipras had the same honesty and at least acknowledged that a "NO" vote substantially increases the risk of our leaving the Euro. This would give people a clear choice. He owes that to democracy.

But Tsipras already knows what people will choose if given that choice. So instead he now promises that the "NO" vote is not a vote to leave the Euro. Indeed, he promises us that he will reach an agreement within 48 hours of a "NO" vote. Surely a promise to agree in 48 hours is a promise to capitulate to any agreement. That is the bizarre predicament that he has put us in. A true travesty of democracy.

This piece has been updated to reflect the results of the referendum.