The people of Greece stand in danger of accepting the illusion that they can keep the euro and also renege on the previously agreed-upon austerity program. Greece now appears to be doomed to its second election in two months, to be held in the middle of June, because no proposed coalition government is viable. Not only the party leaders, but above all the authorities in the European Union have an obligation to clearly and honestly articulate the ballot question. The voters have to choose between the euro and relief from austerity.
Alexis Tsipras, the leader of the far-left Syriza party, was in effect the victor the election of May 6, rising to second place, ahead of Pasok, the establishment left-of-centre party. The opinion polls for the next election suggest that Syriza will double its seats in June. Mr. Tsipras is the chief propagator of the belief that the Greeks can have their cake (or perhaps their saganaki) and eat it too: continuing to use the Euro, but largely liberated from economic pain. The leaders of the centre-right New Democracy and Pasok need to refute him.
It is true that the EU has no procedure for “Grexit”: an exit, voluntary or involuntary, by Greece (or for that matter any other euro zone member) from the euro. But if the Greek government makes an outright default, or stops being able to pay its bills to its citizens (wages, pensions, etc.), as well as to its other creditors, the European Central Bank could well decline to be Greece’s lender of last resort, or to accept Greek bonds as collateral. To keep operating, the government would have to start issuing a currency of its own, presumably a reborn drachma.
The Greeks’ voting behaviour is understandable. The established parties had deceived them. The EU’s depression-inducing austerity program goes too far; a frank, orderly, partial default would have been better. As things now stand, however, Mr. Tsipras is tempting them into a fantasy, which would take them from bad to worse.