I do not believe those who say there is a choice between austerity and stimulus.
Countries that have borrowed too much, either as citizens, as companies and banks, or as Governments, have to reduce their debts, and that means austerity.
The choice is between fast, traumatic, and disruptive austerity, or slow, painful, and deliberate austerity.
The former will involve much more drama and would be much more unpredictable. It could involve the complete collapse of the banking system.
The latter could involve more austerity in total, but might involve fewer unplanned side effects because burdens could be redistributed over time and managed by Governments working together.
The Greek Referendum will involve a choice between the two options.
If Greeks vote “no” , they will get the first option.
If they vote “yes”, they will get the second.
The Referendum campaign itself will be very difficult to manage. There will be a huge level of inter action between opinion polls and bond markets.
A poll that suggested a “no “ vote could send bond markets plunging, and plunging markets could pre empt the result of the referendum and make it irrelevant.
It is very hard to understand the thought processes of the Greek Prime Minister.
Did George Papandreou tell his colleagues at the recent EU Summit, that agreed a deal with him on Greek debts, that the deal was conditional on a referendum?
If he did not do so, then he is acted in such bad faith that it is hard to see how colleagues could do business with him again. If that is the case, Greece should have a General Election, not a referendum.