“I would vote no, for two reasons.”
Nobel-winning economist Paul Krugman says he would vote “no” on Greece’s upcoming referendum on whether to accept the terms of a bailout put to it by its creditors.
Writing on his blog for The New York Times, Krugman explains that he would vote no because: one, because leaving the euro would be better than continuing the same program that has been in place for the last 5 years; and two, because voting yes on the referendum would essentially be a vote to replace Greece’s Syriza government.
Syriza, led by current Greek prime minister Alexis Tsipras, was voted into power in late January after campaigning on a platform of rejecting austerity measures imposed by Greece’s creditors.
But now that the moment has come to decide, is Greece going to be in or out of its current plan — and in effect, the euro — Tsipras has put the decision to the people of Greece.
In an editorial posted earlier on Sunday, The Financial Times had some harsh words for Tsipras, basically saying that he is putting this referendum to the Greek people by saying it is a vote on austerity measures when it’s really a vote on Greece’s future in the euro.
Krugman also sort of acknowledges that this vote amounts to as much, but thinks it is time for Greece to move on.
“OK, this is real: Greek banks closed, capital controls imposed,” Krugman writes.
“Grexit isn’t a hard stretch from here — the much feared mother of all bank runs has already happened, which means that the cost-benefit analysis starting from here is much more favourable to euro exit than it ever was before.”
So there’s that.