In a dramatic move that will put Europe on tenterhooks, the Greek prime minister Alexis Tsipras told his fellow citizens last night he would call a referendum on the bailout accord that international creditors have proposed to keep the debt-stricken country afloat.

Following an emergency meeting of his cabinet, Tsipras said his leftist-led government had decided a package of austerity measures proposed by the country’s creditors – made in a last-ditch effort to avert default – would be put to popular vote. The referendum will take place on Sunday 5 July.

“After five months of hard negotiations our partners, unfortunately, ended up making a proposal that was an ultimatum towards Greek democracy and the Greek people,” he said in a national address, “an ultimatum at odds with the founding principles and values of Europe, the values of our common European construction.”

The leader, who only hours earlier had rejected the proposed reforms after several days of high-stakes talks in Brussels, said Greeks now faced a “historic responsibility” to respond to the ultimatum.

He said the reforms were “blackmail for the acceptance on our part of severe and humiliating austerity without end and without the prospect of ever prospering socially and economically”.

This is actually the intention.

This is politically motivated sadism.

The Germans want it because the want to demonstrate their power and virtue, and because of memories of  a period of hyperinflation that was caused by the triumphalism of the victors in the First World War.

The French want to be sure that they are not on the losing side of this alone.

The other northern tier EU countries have been relegated to spectator status.

What would seem to be Greece’s natural allies, Ireland, Spain, Portugal, and Italy, are desperate for Greece to fail, because if Syriza succeeds, it bolsters the anti-austerity parties in their countries, which threatens their political elites’ hold on power.

So I expect that Greece will be crushed under what is largely a German boot, and that various neo-facist parties, particularly New Dawn in Greece, will gain power as the center delivers misery, and the left is systematically excluded from meaningful governance.

Tell me that this does not look like 1932.

(on edit)

I read something similar to this, but had neglected to bookmark it.

I have now found who it was who explained the politics of this, it was Paul Krugman:

As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.As a political matter, the big losers from this process have been the parties of the center-left, whose acquiescence in harsh austerity — and hence abandonment of whatever they supposedly stood for — does them far more damage than similar policies do to the center-right.