02 July 2015
The Referendum Card
by John Watson
With all eyes on Greece and the prospect of a referendum, it is easy to forget that something not entirely dissimilar is going on on this side of the English Channel. Of course the political background is very different indeed. Britain is committed to austerity and has a thriving economy; Greece is fighting to resist cuts and is by all normal measures broke.
The similarity, then, is not in the background but rather in the negotiating tactics. Mr Cameron is seeking European reform and he is trying to use as leverage the possibility that Britain will leave the EU. Mr Tsipras has been chasing a no-austerity deal for Greece on the basis that if no agreement is forthcoming Greece will be forced out of the euro and that that will be a disaster for the European currency. In both cases a referendum is used to back up the threat. By referring the matter to the electorate, both leaders change the nature of the negotiation. If you don’t give us a good enough deal, they say, then our electors will reject it. That leaves the EU to make the difficult calculation as to whether the deal which they are offering is in fact good enough and relies on its intrinsic caution to maximise the concessions.
In the case of the UK, the threat is probably illusory. Despite much huffing and puffing, it seems unlikely that the public will walk away from the EU whatever terms Mr Cameron may or may not secure. The CBI have already indicated their intention to campaign for a “Yes” vote regardless and a recent letter to “The Times” from a number of business leaders says more or less the same thing. It is easy to see why this upsets the government. Even if ministers have already decided to campaign “yes” themselves, an indication that the result will inevitably be “yes” blows Mr Cameron’s negotiating position and leaves him reliant on support from those countries which actually agree with him and, what is more, are prepared to say so. That is not a hopeless position but one would prefer to have a big stick.
The odd thing about the referendum in Greece is that the government would probably do best to lose it. Despite conspiracy theories to the contrary, it seems to have been no part of their strategy to leave the euro and, in any case, current indications are that the Greek public will be prepared to accept austerity as the price of not doing so. So look at the alternatives. If Greece comes out and poverty and misery follow, the government will be criticised as foolish and incompetent. If on the other hand the government loses the referendum so that Greece accepts austerity but remains in the euro, ministers will be able to say that their tactics have brought them the best terms available. They may even present their negotiation as a triumph of strategy.
But that doesn’t seem to be the line taken by Mr Tsipras at the moment. The polls indicating that he may lose seem to have made him shift his position and make another attempt to settle with his creditors. Is that to cover him if the answer is no, or is it because he now believes he has protested enough to be able to claim that his party has done all it could? It is as difficult to work that out as it is to guess whether his late offer will bear fruit or whether he has pushed the other members of the Eurozone too far.
One thing which does emerge both from Greece and the UK , however, is that whilst a referendum looks like the ultimate exercise in democracy, in practical terms it is often just a stratagem in a game of political manipulation.
