Damned…

…if they do, and damned if they don’t.

Please note: the glee that I obviously cannot hide in this post is due to my pleasure of watching the EU bureaucracy flail; for the Greek people – who have opened themselves up to a who-knows-what tomorrow – I pray for the best.  Whatever opinion one has of the Greek people, the truth is that this entire mess was caused by their politicians and by the bailing-out of European banks. 

The Greeks overwhelmingly vote no; now the drama really begins.  Ambrose Evans-Pritchard spells it out rather plainly:

The shock result effectively calls the bluff of eurozone leaders and the heads of the European Commission and Parliament, forcing them either to back down or carry out drastic threats to eject Greece from monetary union.

That which is unavoidable eventually becomes inevitable, and the Greek voters have served it up on a silver platter.  If Eurozone leaders back down, expect similar popular revolts in other member states.  Alternatively, if they kick Greece out of the club, expect markets to force the issue toward the next sickly patient.

Oh to be witness to the moment when fantasy-dreamtime is jolted into reality.  As they say, to be a fly on the wall…

The EU's leadership was in utter confusion as it became clear during the day that support was swinging back to the "No" camp, despite blanket coverage from the private TV stations warning that a "No" meant Armageddon.

Many European leaders are stuck, having painted themselves into a corner:

Martin Schulz, head of the European Parliament, was still insisting on Sunday that a "No" vote must mean expulsion from the euro, but his view is becoming untenable.

Jean-Claude Juncker, the Commission's chief, is equally trapped by his own rhetoric after warning last week that a No vote would be a rejection of Europe itself, leading to calamitous consequences.

They thought Tsipras and other Syriza leaders would be run out of town after the vote; instead, might we see the EU leadership given the boot?  That would be…luscious!

What to do when rhetoric is faced with reality?  Can they so easily change their tune?  Do they have a plan?  Apparently, not yet:

French president Francois Hollande said he would bend over backwards to keep Greece in the euro despite voting no. He is to meet German Chancellor Angela Merkel in Paris on Monday to draw up a joint response…

There are mounting signs that the creditors are stepping back from the brink, conceding that they may have to renew talks with Syriza after all, though it is far from clear what this means.

“We didn’t really mean it” will only raise the temperature in other countries saddled with false “austerity”: there is no austerity for banks and other entities who have lent money to Greece, yet this is where the austerity should begin.  Perhaps it will now.

There are a couple of options open to Greece – both of which will only further propel the disenfranchised in other countries to follow a similar path:

"If necessary, we will issue parallel liquidity and California-style IOU's, in an electronic form. We should have done it a week ago," said Yanis Varoufakis, the finance minister.

"The first thing we must do is take away the keys to [governor Stournaras’, a holdover appointee from the past conservative government] office. We have to restore stability to the system, with or without the help of the ECB. We have the capacity to print €20 notes," said [a hardliner in the Syriza Party].

Print their own Euros – won’t that be a kick in the pants!

Let Greece off the hook via some combination of less demanding budgets and/or debt restructuring, or kick Greece out of the Euro and maybe even the European Union.  Damned if they do and damned if they don’t – the perfect position for the bureaucrats and technocrats that shepherded the European project to this point:

Damned.