IS GEORGE Papandreou simply a man at the end of his tether, blundering from one political disaster to the next? Or is it possible that his move on Monday in announcing a referendum was a political masterstroke, calling everybody’s bluff?
When Greek PM George Papandreou announced a referendum, his political opponents, several of his colleagues in the Socialist PASOK party, European leaders, the pundits and the media were unanimous in their condemnation. Just days after negotiating a further tranche of bail-out money with the European Union, which included the so-called haircut that effectively halved Greek’s debt, he had thrown a spanner in the financial works.
The markets reacted swiftly and negatively. An ever volatile Greek population erupted in violent demonstrations, denouncing him as a fool. One headline even read: ‘Papandreou, Master of Chaos’. Had he committed a massive political blunder?
The Greek prime minister was called to Cannes to explain himself to his European masters, Merkel and Sarkozy. He made it clear to them that without the support of the Greek public he would not be able to implement the terms of the latest rescue package, insisted upon by the troika (the European Bank, the EU and the IMF). In fact, they would lose their money if he tried to implement the measures without backing.
Actually, he had reached the end of the line. He realised that he had no political base left from which to implement the reforms on which he had embarked. Everybody was against him. He had no support. Mr Papandreou had lost credibility due to the fact that legislation which he had forced through Parliament was simply not implemented by his officials. The Greek trade unions opposed every step he took and by indiscriminate and disastrous strike action shattered whatever was left of Greece’s reputation. He could not go on like this.
Ten delinquent PASOK MPs, intent on surviving their leader’s downfall, threatened to vote against him in a motion of no-confidence, in order to present themselves to the public as being opposed to the punishing financial measures contained in the latest package agreed with the European lenders. The spineless New Democratic (ND) Opposition leader Samaras, who refused all along to cooperate in a government of national unity in order to save his country from financial ruin, seized the opportunity to portray himself as the potential saviour of the heavily burdened public. He undertook to renegotiate the terms of the loans with the so-called troika. One can only ask if he wants Greece’s lenders to write off the other 50% of the Greek debt pile as well. This is a notion that has been totally discounted by the troika.
The supremely ambitious Dora Bakoyannis, a former Minister of Foreign Affairs in the last ND government, positioned herself for leadership by jumping the gun and absurdly suggesting that the referendum should pose the question whether the Greek public supports the cuts contained in the latest package presented to Parliament by Mr Papandreou. Who on earth will vote for higher taxes and lower incomes if the long-term benefits are not clear?
Mr Papandreou, on the contrary, announced a referendum around the question whether the Greek public wishes to remain part of the euro zone, or not. This is the real question.
His opponents have been misleading the public by suggesting that there is a third possibility (that of renegotiating the terms or simply ignoring European demands for better financial management). The choice for the Greeks is a simple one: do they wish to remain part of the European Union and of the euro zone, which would entail at least ten years of severe austerity, the uprooting of inbred corruption, and a return to competitiveness through realistic salaries and hard work, or do they wish to leave the euro zone and return to their former currency, the drachma, which would mean the end of the artificial bubble of debt-based wealth to which Greeks had become accustomed over the last 30 years?
Such a return would push Greece back to where it was in the 1950s, a poor country dependent on agriculture and tourism, with no prospect of achieving competitiveness and national prosperity within the next 50 years. Gone for this generation, and the next, will be the plethora of Mercedes Benzes on Greek roads, the café culture which replaced the modest kafeneion and other ‘essential’ luxuries to which Greeks have become accustomed. The consequence would be vastly increased prices for all imports, particularly oil and manufacturing machinery, which would devastate what is left of the Greek economy. Those ‘experts’ who are calling for the return to the drachma, suggesting that it would lead to an export-led recovery of the Greek economy, have no idea what they are talking about. It would be pure disaster.
By confronting the Greek public with this stark choice, Mr Papandreou has, in one masterstroke, broken through all the duplicity, deceit, ignorance, uncertainty and political manoeuvring that have been clouding the issue of the Greek dilemma. If the public vote goes for remaining in the euro zone, the Greek nation endorses, by implication, the necessary steps to do so, thus giving Mr Papandreou, for the first time, a massive, solid base from which to push through his reforms. Should they vote to exit the EU, Mr Papandreou will have to accept that nobody can save the Greek economy, that he should bow out and will have to watch the near destruction of Greece as a state. If the result is negative and the loan is not secured, civil servants and pensioners will not be paid at the end of December, outstanding government bills will be left unpaid and the country will descend into immediate bankruptcy.
The allegation has repeatedly been made that the Greek prime minister is a man without a plan – or, alternatively, a man unable to implement his plan. This decisive action shows that his plan has been to remain in the European Union and the euro zone at all cost, and that he is determined to do so. His people, by their actions, have demonstrated that they are unable to grasp what it is all about. By focusing their attention on the only question that matters, he demonstrates leadership and responsibility.
This announcement is a role of the dice through which he can only gain.
