Will Mr. Tsipras meet his Waterloo?

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In early 2012, when Greece had sunk into a 1930s-style economic depression and the streets of Athens were routinely set ablaze by protesters, an aspiring young politician named Alexis Tsipras spotted his moment and launched his effort to form a government.

He was 37 and his message was clear, compelling and resonant with increasingly bitter Greeks, 1.5 million of whom were unemployed: Austerity is killing us.

On a CNN interview in May of that year, he said: "With this policy, we are going directly to hell."

Austerity and economic recovery are indeed generally incompatible. But little did anyone in Athens, Brussels or Berlin realize it would be Mr. Tsipras, who became Prime Minister in January, who would emerge as the agent of his country's journey into the flames.

By Tuesday night, after five months of failed negotiations to design a new bailout program for Greece, the country was insolvent and entirely without recourse to any financial support from its international creditors – the European Union, the European Central Bank and the International Monetary Fund.

Just after midnight, it defaulted on a €1.6-billion ($2.2-billion) loan payment to the IMF, becoming the first developed country to do so – a rare humiliation. Earlier in the day, it missed a smaller payment to the Bank of Greece early. Its banks were shut, for fear that customers would remove all their deposits and bleed them dry. Since the ECB had decided on Sunday to freeze emergency funding to the banks, their outright failure was a distinct possibility.

If all this were not drama enough in a country weary of drama, the Greek parliament, at the urging of Mr. Tsipras, authorized a referendum on the creditors' last bailout proposal. In effect, it is a referendum on the use of the euro. If the vote goes ahead on Sunday and is in favour of the government's anti-austerity crusade, there is a good chance the drachma will make an ignoble return as the official currency.

But even as Mr. Tsipras's game of geo-economic chicken seems to be going against him, he remains Greece's favourite politician, calling into question the accepted theory that a Yes vote in the referendum – that is, a vote in favour of accepting the creditors' demands – would send him packing. The creditors would love a regime change. But they may not get it, for Mr. Tsipras has been a brilliant populist and propagandist. Even some of his detractors admire his slick ways.

Take the referendum. "The question is technical, but what it is really asking is: 'Do you want austerity, Yes or No?" says Achilleas Kasimidis, 29, a salesman at a technology startup in Athens who attended a pro-EU mass rally Tuesday. "That's like saying, 'Do you want to die, yes or no?' No one wants austerity but if we vote against it, the banks won't reopen again."

Mr. Tsipras, who is now 40, was born in Athens, joined the youth wing of the Communist Party in the late 1980s and studied civil engineering and urban planning at university. An admirer of Mao Zedong, he later joined Synaspismos, the coalition party of the left and ecology, becoming its leader in 2008, when he was only 33. A year later, he landed in parliament and was elected leader of Syriza, the radical left-wing bloc that included his old party.

He made a splash and triggered a political and financial crisis in the general election in mid-2012. Tapping into the anti-austerity rage as the jobless rate went to 27 per cent, he campaigned on an anti-austerity pledge that would see his party, if elected, shred the bailout program that insisted on ever more tax hikes and spending cuts. As Syriza climbed in the polls, investors and bank customers got nervous and a bank crisis was suddenly under way.

It was at that point that Wolfgang Schaeuble, the all-powerful German Finance Minister and high priest of austerity and fiscal discipline, no doubt decided that the Syriza leader would be trouble. The 2012 election, he said, was evolving into a referendum on Greece's use of the euro. "If Greece – and this is the will of the great majority – wants to stay in the euro then they will have to accept conditions," Mr. Schaeuble said.

The election was inconclusive. A runoff was called and the pro-EU, pro-austerity party of Antonis Samaras, the leader of the centre-right New Democracy party, won. But Syriza placed a close second and Mr. Tsipras was anointed prime-minister-in-waiting. The Greek recession continued to deepen, making a mockery of the IMF forecasts that the downturn would be relatively shallow.

As Athens burned, literally, Mr. Tsipras expertly exploited the anger directed at the creditors. The recipe was effective. Demonize the creditors at the highest level, which meant taking the battle not to the technocrats in Brussels and in Frankfurt, but to German Chancellor Angela Merkel and the other EU leaders who backed her tough stance on Greece; condemn austerity as undemocratic; and pump up a take-back-our-sovereignty nationalistic fervour. "Austerity is not part of the European treaties; democracy and the principle of popularity sovereignty are," he said.

When the election of the new Greek President went awry, the constitution demanded that a new election be called. That was in January and Syriza stole the show. Mr. Tsipras made Yanis Varoufakis, the combative, self-described libertarian Marxist, his Finance Minister and dispatched him to Brussels and Berlin with his kill-austerity message, in effect putting the blame for Greece's economic mess on the creditors, not on the epic incompetence and corruption of previous Greek governments.

Mr. Tsipras gained even more popular support by making promises to the Greek people that mocked the creditors and were clearly unaffordable. Pensions became a "red line" issue and would no longer be cut. Salaries would be restored. Civil servants would be rehired. The shuttered national broadcaster would reopen. Privatizations would be cancelled. Some of what he promised was done, enraging the creditors.

But the anti-austerity campaign ultimately backfired. Both sides dug in for five long months. If Mr. Tsipras made one big mistake, it was his refusal to put Grexit – Greece's withdrawal from the euro zone – on the table at the outset. As long as he vowed to keep Greece in the euro zone no matter what happened, his negotiating power was insufficient to bully the creditors.

By this week, Greece, its banks shut down, was on the edge of economic collapse. Mr. Tsipras launched a flurry of compromise proposals, all of them rejected. Many Greeks are convinced he was cynically using his proposals to prove to the Greek people that the creditors were inflexible and bent on destroying the country.

On Wednesday, after yet another non-starter compromise proposal, Mr. Tsipras lost his cool. In a national broadcast, he accused the creditors of "blackmailing" Greece into thinking the country would be tossed out of the euro zone unless voters backed their demands. He urged a No vote – rejection of the creditors' austerity-laden proposals.

His message just could work. Millions of poor and unemployed Greeks, fired up by Mr. Tsipras's defiance, might think they have nothing to lose. Mr. Tsipras remains popular. But that popularity has carried no weight among the creditors. Even if he gets his way in Sunday's referendum, the creditors are unlikely to buckle.

But how much longer can Mr. Tsipras's popularity last as the cash is squeezed out of Greece? Voters stuck in endless lineups at ATMs might take out their rage on him next.