GREEK PRIME Minister Alexis Tsipras chose an academic expert on game theory as finance minister, so it’s fitting that his left-wing government has now decided to play games with the fate of Europe and the global economy. Alas, it’s no theoretical exercise.
Mr. Tsipras has broken off debt-restructuring talks with his European creditors and the International Monetary Fund (IMF) in favor of a plebiscite on the creditors’ final offer . Now, Europe’s common currency, the euro, and European unity itself may depend on the results of this stunt, which, in turn, hinge on the good sense of the recession-wracked, over-demagogued Greek electorate.
Mr. Tsipras is urging them to vote “no.” The only prudent course, though — for Greece, Europe and the rest of the world — would be “yes.”
We say this fully cognizant of the price Greece has already paid for austerity measures the German-led creditor bloc has imposed in return for bailouts to date. At times, Berlin has seemed intent on teaching modern Greece the same lesson that, according to Thucydides, ancient Athens taught Melos: “The strong do as they can; the weak suffer what they must.” The best measure of how real the pain has been is that it made the election of Mr. Tsipras’s populist insurgent party half a year ago not only inevitable but also, under the circumstances, understandable.
On the whole, though, Mr. Tsipras’s defiant course is both unwarranted and unrealistic. Though the creditors insist on further reforms, including trims to pensions upon which many Greeks depend, the Greek economy had started to perk up prior to Mr. Tsipras’s ascendance, and the creditors softened their terms somewhat in pursuit of an agreement with him. Absent his gratuitous verbal provocations, they might have yielded even more. Mr. Tsipras’s proposed alternative, which would tax Greece’s already crippled private sector even more to preserve unsustainable pensions, is even less likely to jump-start growth than the creditors’ plans. German financiers are more complicit in Greece’s debt bubble than Berlin admits, but the same is true for Greece and its excuse-making politicians — which is why there is so little support for Mr. Tsipras in the rest of Western Europe.
Truth is, there is no pain-free path left for Greece. A “no” could mean financial collapse and exit from the common currency — with a short-term decline in living standards, including unpaid pensions, even worse than that which Greece has already seen. The extreme elements of Mr. Tsipras’s political coalition relish that, sensing an opportunity for Greece to reorient itself economically, toward a state-run economy, and geopolitically, toward Moscow — which they imagine would finance such an enterprise. If there is a fate worse than the country’s current predicament, that would surely be it.
A “yes” vote would shore up European unity and salvage Greek membership in the euro zone, which most Greeks still want. It would preserve at least the prospect of new financing, on relatively reasonable terms, from Europe and the IMF. To be sure, defeat for Mr. Tsipras’s referendum could bring down his government. Given his performance so far, that seems like one more argument to vote yes.