The only thing certain about the aftermath of Sunday’s Euro summit is the disgrace of the political leaderships. The EU’s main powers tried to ritually humiliate the Greek government, but ruthlessness of intent was matched by incompetence when it came to execution. The German finance minister, Wolfgang Schäuble, threw on to the table a suggestion for Greece to leave the single currency for five years. Senior MPs from his coalition partner, the socialist SPD, screamed from the sidelines that they had not agreed to this – yet enough of Germany’s partners did agree to get the proposal into the final ultimatum.

The Greeks were negotiating under threat of their banking system being allowed to collapse, a threat made by the very regulator supposed to maintain financial stability.

For the Greek leadership, it has also been a week of miscalculation. Armed, they thought, with a mandate for less austerity, they listened once again to the French, whose technocrats actually helped design the Greek offer going into the Brussels summit, only to see that offer ripped apart and replaced with a demand for the reversal of every measure against austerity the government has ever taken.

But the real problem is not the politicians. It is the eurozone’s inability to contain the democratic wishes of 19 electorates. When the Finnish government threatened to collapse the talks, it was only expressing the wishes of the 18% of voters who backed the nationalist rightwingers of Finns Party. Likewise, when Schäuble sprang his temporary Grexit plan, he was expressing the demand of 52% of German voters, who want Greece to leave.

Little did leftwing Greece understand how scant was the power its ministers actually wielded from their offices

As for the Greeks, having tramped the streets of Athens alongside them for the best part of two months, I am certain that the “Oxi” movement was essentially a demand to stay in the Euro on different terms. You cannot get 70-80% of people in the working-class suburbs of Athens turning out – in the face of a rightwing media bombardment – on far-left anti-Euro sentiment alone.

Now it seems that both sides of the Greek referendum were voting for an illusion. One of the most touching aspects of Greek life is people’s obsessional respect for parliamentary democracy. Syriza itself is the embodiment of a leftism that always believed you could achieve more in parliament than on the streets. For the leftwing half of Greek society, though, the result is people continually voting for things more radical than they are prepared to fight for.

I asked one of Syriza’s grassroots organisers, a tough party cadre who had been agitating for a “rupture” with lenders for weeks, whether he could put his members onto the streets to keep order outside besieged pharmacies and supermarkets. He shook his head. The police, or more probably the conscript army would have to do it.

Facebook Twitter Pinterest Columnist Jonathan Freedland and economics editor Larry Elliott discuss the late-night deal that the Greek prime minister Alexis Tsipras has agreed to

When it comes to the now-abandoned Thessaloniki Programme, the radical manifesto on which Alexis Tsipras came to power, there is always talk of implementing it “from below”: that is, demanding so many workers’ rights inside the industries designated for privatisation that it becomes impossible; or implementing the minimum wage through wildcat strikes. But it never happens. When strikes are called, it’s by the communists. When riots happen, it’s the anarchists. The rest of leftwing Greece is mesmerised by parliament.

Little does it understand how scant was the power its ministers actually wielded from their offices. And now the realisation dawns: the Greek parliament has no power inside the eurozone at all. It has the power only to implement what its lenders want.

And what of rightwing and centrist Greece? Its party structures are already shattered by the political defeats of January and the referendum. But here, too, the mass base is prone to voting for an illusion. When they went on to the streets with their badly translated red-baiting placards in mid-June, the Greek right claimed to be for nothing more than “Europe”. But the Europe they want is the Europe that tolerated corruption and fiscal profligacy, and indeed paid for it. The Europe of the submarines purchased from Germany, under conditions which put a former Greek defence minister in jail for taking bribes. Peoples with sovereignty have the right to vote for illusory things. But the Euro took sovereignty away.

I followed the summit in a bar, with a bunch of young Greek freelancers – photographers, fashion magazine journalists, speakers of perfect English who could work anywhere, but choose to tote their DSLRs and laptops here. They know they’re sitting on the most visually stunning and compelling story in the developed world. We watched the hashtag #ThisIsACoup proliferate until our eyes could not stay open. Then, said one: “Let’s go to the beach. Let’s bring women that look like supermodels and a bunch of handsome guys and let’s flip the finger at the world, saying: ‘We’re still Greece’. That will go viral.” It probably would, but the Greece they’re part of is shattered. The economy can and will rebound. Syriza will purge itself and be reformed. The right will find leaders who don’t look bewildered by their own defeats.

The problem is with democracy. If democracy cannot express illusions and crazy hopes; if it cannot contain narratives of emotion and ideals, it dies. By countermanding first the landslide victory of an elected government and then a 61% plebiscite majority, the EU functionally vetoed the outcomes of Greek democracy. If the democratic spirit now dies in Greece – and it might – we had better hope that phenomenon too does not go viral.