Greece Accepts Third Bailout of €86 Billion Despite 61% Referendum Rejection Six Weeks Earlier

The European Stability Mechanism (ESM) board of governors approves a Memorandum of Understanding for Greece’s third bailout program worth up to €86 billion, specifying harsh reform policies Greece must fulfill despite Greek voters rejecting similar conditions by 61% to 39% in a referendum just six weeks earlier on July 5. Prime Minister Alexis Tsipras, elected in January 2015 on an explicit anti-austerity platform with Syriza winning 36.34% of the vote, completes a stunning betrayal of his mandate and the referendum results. On July 13—eight days after the ‘Oxi’ (No) referendum victory—Tsipras reaches agreement with European authorities on a bailout with even harsher austerity conditions than those voters rejected, after a brutal 17-hour overnight negotiation session where European leaders threaten ‘Grexit’ (Greek exit from the eurozone). Former Finance Minister Yanis Varoufakis, who resigned on July 6 after eurozone ministers demanded his exclusion, characterizes the deal as a new ‘Treaty of Versailles’ and ‘Greece’s Terms of Surrender.’ The Greek parliament ratifies the agreement on August 14 by a vote of 229-64, but internal revolt is severe: 32 Syriza MPs vote ‘No’ and 11 vote ‘present,’ stripping the government of its parliamentary majority. The capitulation requires continued cuts to pensions, salaries, public spending, and social services; further privatization of state assets; and maintaining primary budget surpluses that starve the economy of investment. Tsipras calls snap elections for September 2015 to secure a new mandate, winning re-election albeit with historically low turnout reflecting widespread disillusionment. The third bailout, combined with the first (€110 billion in 2010) and second (€130 billion in 2012), brings total Greek bailouts to approximately €290 billion through 2018, yet debt-to-GDP ratio reaches 180%—far above the 120% target. The Syriza betrayal demonstrates the ultimate powerlessness of electoral politics against international financial institutions: even winning elections and referendums on anti-austerity platforms proves meaningless when the Troika can threaten economic apocalypse, revealing that creditor institutions hold veto power over democracy itself.