The Greek crisis is not only out of control but the means to control it are not there. None of the players has a viable plan. Tsipras threatens to resign if he loses but imagines that if he wins it will strengthen his negotiating position and force the Euro group and the IMF to agree to a realistic write down of Greece’s debts and a growth programme to rebuild the economy. There is scant chance of that. The Euro group and its allies have said that if the Greeks reject their package they will have to leave the Euro. But if that happens the cost will be huge and it will be the end of the Euro in its current form. It will become little more than a currency peg on the lines of the ERM where national Euros are pegged against the German benchmark value and drop off when in trouble.
This might be a very good thing but it is not what the people calling the shots are trying to achieve. If Tsipras loses and the Euro group force a new hangdog Greek administration to accept the package, the Greek crisis will go on an on until it explodes and brings down not only the euro, but the EU with it. The reason that this mess exists is that certain fundamental principles are being violated. These are to do with the rules of capitalism, the rules of currency and the rules of democracy.
Capitalism has at its core the principle of failure. Any economic structure must be able to fail in order to renew. Businesses fail, banks fail and individuals fail. So do countries. Without this renewal is impossible, in the same way that old leaves have to fall off the tree before new ones can take their place. Greece is bust, but it is not being allowed to go bust in an orderly way and then enabled to renew.
A currency of paper is a measure of wealth; it is not wealth itself. It must therefore fluctuate according to the underlying values and costs within the economy it represents. It cannot simultaneously measure the value of several economies of varying characteristics, anymore than ten thousand square feet can be declared to be the floorspace in three separate buildings of which only one is actually that size. A currency is a token not a totem. A token facilitates exchange and trade. A totem is something people dance around in circles. You get the point.
Democracy requires that the people are sovereign and have the final say in who governs them and what they do. In the EU most people taking decisions have not been elected by the majority of those whom their decisions impact, because national leaders of widely differing countries are combining power in their hands which has no democratic mandate. The remainder of the players like the EU Commission and the IMF have not been elected by anybody. To use financial strength to subjugate rather than enable, is morally no more defensible that using the threat of armed force.
So what happens next will tell us what is happening next and no more. It will not tell us how it will end. There is mounting evidence that when that ending finally comes it will not be a happy one.