Greeks Should Vote Yes

The right answer for Greece -- and Europe.

Photographer: Christopher Furlong/Getty Images

Greek Prime Minister Alexis Tsipras has called a referendum Sunday to put before his citizens a question they won't understand and to which there's no good answer. One other thing: The future of the European Union hinges on the result.

Greeks, now reeling from a financial shutdown, will be asked whether they agree to the complex terms for renewed support demanded by the country's main creditors: the European Union, the European Central Bank and the International Monetary Fund. Technically, that offer has expired, but it's understood that if voters say yes a similar deal can still be worked out. If they say no, as Tsipras is demanding, the likely consequence is full-scale default and exit from the euro system.

It should never have come to this. The terms demanded by the creditors -- if the IMF's analysis is to be believed -- are too strict. Greece's best chance for economic recovery, and the creditors' best chance of getting most of their money back, involves less fiscal austerity and new debt relief. If Europe's leaders hadn't been so inflexible, and if Tsipras and his team hadn't been so infuriating to deal with, the crisis could have been resolved in that way.

It hasn't been resolved, so Greeks have to choose the lesser evil. They should vote yes -- and, if they do, Europe should respond with the magnanimity and political vision that have been so utterly lacking in its dealings up to now.

Tsipras has gambled throughout that Europe's other governments would do anything to keep Greece in the euro system. He was wrong. He has so maddened his interlocutors that some of them would do almost anything to get Greece out -- regardless of what it might cost both sides. But Europe needs to bolster the euro system, not show it can be dismantled, and the last thing Greece needs is a protracted spell of even greater financial instability.

Greece's Fiscal Odyssey

Talks to keep Greece in the euro system urgently need to resume and be brought to a successful conclusion. As things stand, that requires a yes. Tsipras has made the referendum a vote of confidence in his leadership. Finance Minister Yanis Varoufakis has said he will quit if voters approve, and Tsipras has said he won't carry out the deal if Greek voters say to take it -- but that's fine. Greece needs a team in charge that won't drive its European partners into self-harming rage.

However, it's vital that the EU's leaders be ready, in the case of a yes vote, to make amends for what Greece has had to endure. In short, they should prepare to give Greece, post-Tsipras, most of what Tsipras has been asking for: a milder profile of fiscal consolidation, greater latitude in putting the program in place and debt relief.

Related: Greece Default Watch

This would make sense in macroeconomic terms, because it would support growth. It would also make sense in humanitarian terms, because Greece has suffered too much already. Above all, it would make sense strategically. Europe must strive to bind Greece back into the union as a friend and partner, not as a cowed and resentful enemy.

The EU's message should be: Our quarrel was with Tsipras and his team, not with the people of Greece, our fellow Europeans.

That wouldn't by any means repair the damage that Tsipras and the EU have, between them, needlessly inflicted on Greece and on the European Union as a whole. But it offers the best hope of not making things any worse.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.