There is a punchy but elegant Greek phrase that summarises the moment when delusion and deception are exposed: telos pia ta psemmata, the end of lies. You might have thought that point would have arrived on Sunday when it was announced that banks would not be opening the next morning. It did not. It will not arrive with the queues for petrol; or when Greek merchants refuse card payments; or even when supermarkets begin to run out of imported basics.

As I drove through the streets of Athens watching worried lines form at every cashpoint, radio bulletins were interrupted by commercial breaks offering cheerful suggestions on how to spend your summer euros. It felt like listening to a voicemail message from a dead relative.

This has been coming since the European elections of 2014. That was the moment when Greece’s conservative-led coalition – which had overseen an unpopular programme of financial aid conditional on spending cuts and reforms dictated by foreign lenders – was routed by populists of the hard left. The panicked handling of this development by Greece’s tainted political establishment and the intransigence of the European Union, the International Monetary Fund and European Central Bank, ensured that this momentum built.

Bankruptcy, rupture and isolation will be welcomed with unfathomably foolish pride

It was at this point that I returned to Athens after a 10-year absence. I lived in and reported on Greece for several years prior to 2004 and spent the ensuing decade in the newsrooms of London and as a foreign correspondent in Africa and elsewhere. Taking a break from journalism, I joined a software startup that is trying to build a Greek success story in the midst of the economic wreckage. For all its rewards, this decision has given me an unwanted vantage point to observe the unravelling of an extraordinary country.

The collapse of Greece’s corrupt political centre was marked earlier this year by the election of the left coalition, Syriza. Its success was built on the lie that it could deliver the same financial aid with fewer of the austere strings than its predecessors. Now that this lie has run it course, Syriza has abdicated responsibility for its own failure.

The result will be a referendum this Sunday with a crudely designed ballot in which the “no” box is given top billing and the question is framed in almost meaningless bureaucratic language. Greece’s prime minister, Alexis Tsipras, who has gone into full obfuscation mode, will push for a “no” vote without any discussion of what that would mean. In other words, the Greek government will now campaign to have its own failure at the negotiating table endorsed by the very people it will hurt the most. And there is every chance this deception will succeed.

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It has been clear that the choice awaiting Greece was a future that looked like Portugal, a degraded economy of the European south; or Serbia, a proud nation led into the international wilderness by populists’ lies and fantasies of Russian rescue. Neither are good choices, but one is incalculably worse than the other.

Now is the time when the lazy lie of Greek exceptionalism, dripped like poison for decades into the country’s dysfunctional, nationalistic education system, will find its full expression. Bankruptcy, rupture and isolation will be welcomed with unfathomably foolish pride. The giddy talk of a second “oxi day” (the anniversary of Greece’s second world war refusal to surrender to fascist Italy) will not be calmed. For all its lunacy a “no” vote looms.

Outsiders will look on in bewilderment. Unlike money, there is plenty of blame to go around. The scramble to avoid responsibility will be excruciating, as the press conference on Monday by European Commission head Jean-Claude Juncker demonstrated. But this shambles will be of comparatively little consequence for those outside Greece.

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The return of the drachma will bring misery with it. Devaluation, runaway inflation, shortages of food and medicine will be managed by an administration and populace whose default response is to blame enemies abroad.

Many critics of austerity who cheer on Tsipras wear their ignorance of Greek specifics like a badge of honour, with the US economist Paul Krugman a particularly egregious example. Others, like the British broadcaster Paul Mason, who is steeped in the lore and mores of the Greek left, are willing to see the country used as the vanguard of a doomed challenge to capitalism. Perhaps when the coffee runs out – for all its sunshine Greece lacks the altitude to grow it – a reflection point will be reached. By now I doubt even that. In the Greece we love and are all complicit in creating, there will be no end to lies.