Monday, October 31, 2011

Beggars can't be choosers. Or CAN they?

Greece to hold referendum on Europe debt deal
[...] "This referendum will be a supreme act of democracy and of patriotism," Papandreou said, apparently catching many lawmakers by surprise. "The [Greek] citizen will be called upon to say a big 'yes' or 'no' to the new loan arrangement."

But asking voters to support harsh austerity measures that were part of a painstakingly crafted bargain with Greece's creditors casts uncertainty over the country's ability to meet its part of the deal.

Greece is facing the possibility of a devastating default that could imperil the fate of Europe's single currency, shatter global markets and get the country evicted from the 17-nation Eurozone.


Angelos Tolkas, a government spokesman, said details involving a referendum were under review. It would be the first such public ballot in Greece since 1974, when voters decided to abolish the monarchy after a brutal military dictatorship.

"It will most likely take place in January and it will be binding," Tolkas said.


A poll published in the To Vima weekly newspaper over the weekend showed 6 in 10 Greeks opposing last week's rescue deal, many fearing more cutbacks in wages and jobs. Still, 54.2% supported the idea of a referendum, while 40% believed Parliament should decide whether the deal makes sense for Greece.

Whispers about a referendum had been heard for weeks. Still, Papandreou surprised opposition rivals, and even some of his aides.

Members of the Communist Party referred to the move as blackmail. Rival conservatives said Papandreou was dangerous, with New Democracy party spokesman Yannis Michelakis saying that instead of "withdrawing honorably, [Papandreou] dynamites everything."

Senior government officials said Papandreou could push the agreement through Parliament should the public knock down the debt deal in the referendum.

Whatever the contingency plan, Christopher Pissarides, a Nobel economics laureate, told Sky News, "a rejection [of the European deal] will be disastrous."

"Greece will default immediately," Pissarides said, "and I can't see them staying in the euro having rejected such a vital EU plan."

So if they decide having half of their debt eliminated isn't good enough, they will take the global economy down with them? I thought kicking them out of the EU was not an option?

Pure democracies always destroy themselves. Is that what we are going to see here? The Greek president using his "dynamite" and going out with a bang? And taking the global economy with him?

I guess we'll see in January, won't we?

Also see:

Why Greece is in trouble. And a warning for us.


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