If I were Greek I'd vote No and leave the EU

Suddenly we see a new and disturbing political reality. Governments of small countries are expected to accept their the strictures of Brussels without even seeking the endorsement of their voters. The EU might not like democracy, or Syriza, but a referendum was a sensible way out of the deadlock.

If Greek prime minister Alexis Tsipras had simply accepted the ultimatum with which he was presented last week it would mean not only radical cuts to pensions, health care and all forms of social support, but also decades of economic depression; all of the things he was elected to reject.

He had to have support from the Greek people if he was to sign this deal. And so he requested it, to the undisguised fury of the Troika. "Don't think you'll get the same deal now," says the International Monetary Fund (IMF) as if it were talking to a recalcitrant child.

Many of us wondered why on earth the EU was imposing yet more austerity on Greece. After five years of this "criminally irresponsible", policy as the economist Joseph Stiglitz has called it, Greek debt has only increased from 133 per cent of GDP to 176 per cent while the economy has shrunk by 25 per cent. This is worse than the Great Depression.

Rarely in history has an economic policy so comprehensively failed. The Troika - the EU, the European Central Bank and the IMF - know they will never get back the money they spent bailing out, not Greece, but their own private banking systems. The money is gone and should, like sub-prime mortgages, never have been lent in the first place.

But now we know this isn't about debt recovery. It is about disciplining a recalcitrant government, forcing it to accept a programme of restructuring that imposes neo-liberal values of privatisation, radical cuts in state provision, labour market reforms and an institutionalised debt servitude.

Everyone says, oh, look at Ireland: it accepted the austerity medicine. But Ireland's economy is almost entirely structured for export to growing economies in the United States and the UK. And no one should believe that it is out of the woods with its huge overhang of debt.

Greece is a low productivity, relatively backward economy. It can't generate export-led growth overnight. This is a legacy of corruption and mismanagement going back decades. But the EU knew the score when it invited Greece to join the euro.

The irony is that the Greeks will probably vote Yes to the ruinous EU terms because they don't want to give up the euro. If they vote No, they will be voting effectively to leave, which might be the best thing.

If Greece had not been in the zone, the IMF and the EU would be advising it to devalue its currency (as Britain did after 2008) and forcing its creditors to take a "haircut". That would have allowed Greece to get out from its debts and rebuild as a low cost, low productivity service economy.

It's widely accepted that Greece's currency is effectively overvalued because it is pegged to a euro that benefits German exporters. There is no way that this can be resolved by forcing ever more austerity that will simply increase the debt

And no, I'm no saying Alexis Tsipras is blameless. There has been a lack of gravity about his conduct of the negotiations which is regrettable, but only to be expected of the leader of a left- wing coalition. He can't be seen to sell out. He has to appeal to his supporters, just as the EU does to German bankers.

That is what democracy means. However, this has turned into a show trial in which Greek democracy is being prosecuted for failing to observe the law of austerity. It is the European Union that has been exposed in a new light.

This is now a Europe in which banks are bailed out but not small countries, where countless billions in taxpayers funds are mobilised to gratify the material lust of a financial kleptocracy while democratically elected governments, honouring their manifestos, are expected to accept the dictates of an unelected bureaucracy.

Stuff it. If I were Greek, I'd vote No and leave.