Editorial,

A distinct air of unreality hovers over Greece as its voters face an incomprehensible referendum over an expired European bailout offer whose consequences no one understands. It is fitting that the “Yes” and “No” ballot options are reversed in this topsy-turvy situation where nothing is what it seems.

It’s not even clear that the Greek government can organize a fair, effective referendum by July 5, or what the impact will be of Tuesday’s last-minute offer to its creditors in the “Troika” (formally the European Commission, the European Central Bank and the International Monetary Fund), in which it accepts most of the conditions it is urging Greek voters to reject in the referendum. For that matter, it is unclear whether the offer will remain after the referendum.

All, then, is confusion. If Greek voters say No to their government by saying “Nai” (Yes) in the referendum — Yes, that is, to the indecipherable 42-word ballot question and the 34 pages of “Reforms For The Completion Of The Current Program and Beyond” and “Preliminary Debt Sustainability Analysis” attached to it — there would seem little reason, based on its track record, to trust the Syriza regime to comply, assuming it remained in power after such a mighty rebuff. Even if it accepted the deal in principle, it might renege on its implementation, as it has on the terms of previous bailouts (its current demand is for a third).

Finally, if Greece does accept the EU’s impenetrable final offer, or if the EU accepts that of Greece, or if the two sides fudge up some scheme whereby Greece’s creditors again lend it the money to pay interest on the money they have previously lent it, it will not address the underlying problem of Athens’s bloated public sector. Instead, by propping it up, it will postpone the needed day of reckoning, prolonging Greece’s agony, and Europe’s.

If, on the other hand, voters say “Ochi” (No), it might not trigger the dreaded Grexit, i.e. withdrawal from the euro. The prime minister, Alexis Tsipras, is now telling voters that a No vote would merely give Greece a stronger bargaining hand in an entirely new set of negotiations. But Greece does not have anything to bargain with.

Defaulting on its debts would not automatically force Greece to stop using the euro. Any government can declare anything it likes to be money, from pictures of its own dead politicians to American dollars to the giant stone discs 12 feet across used on the island of Yap. But in the absence of ECB financing for its banks, the Greek government might well find it had no choice but to have its own currency, the better to print enough to keep its banking system from imploding.

What is certain is that voting “No” and exiting the eurozone would do nothing to realize Syriza’s fantasy of an end to grim austerity and return to joyful profligacy. If Greece cannot afford its accustomed lifestyle with lavish foreign subsidies, it clearly won’t be able to without them.

The Syriza ministry appears to believe that the laws of economics can be amended as readily as those regarding municipal garbage collection. So it is asking citizens to vote for a free lunch. But while people can vote to act as if such things existed, no one can vote them into existence.

On this reality issue Greece’s creditors are far from innocent. The fundamental premise of all the credit guarantees, loans, grants and other fiscal jury-rigging is that somehow, the unsustainable course of Greece and other nations can be made sustainable. It can’t.

It should worry people that Puerto Rico’s governor just announced his part of the United States cannot pay its debts. And that, as Britain’s Telegraph recently noted, the entire Eurozone’s debt exceeded 90 per cent of its GDP in 2014. Six nations were above 100 per cent including Italy and Greece, with Spain and France over 90 per cent. And while the 1992 Maastricht Treaty creating the EU and euro committed signatories not to exceed 60 per cent, even stolid Germany hit 74.7 per cent in 2014. So there is widespread make-believe over the fact of ignoring rules as well as its predictable consequences.

Greece’s creditors are panicked that a Grexit and default might have a direct domino effect of driving Italy into insolvency, and an indirect one of making further eurozone departures thinkable. They should instead be worried that citizens, via their governments, are living chronically beyond their means, from Athens to Berlin to London to Washington to Ottawa, and still believe fairy tales about escaping the long-term consequences by taking in one another’s subsidies.

Unreality isn’t just a Greek thing.