Time to resign Mr Papandreou
Last week, the European Union Council agreed on a set of policies for tackling the euro crisis. It was hoped that the new agreement (hereafter referred to as the October Agreement) would be a decisive step toward resolving a slow burning crisis that threatened to derail the euro, plunge the EU itself into a process of explicit disintegration and, consequently, drag into a new recession the global economy.
Readers of these pages will know that I have taken the view that the October Agreement was made of the wrong stuff (click here, here and here). Others (including President Obama) have praised Europe for moving in the right direction, reserving their doubts and criticism for Europe’s pace along this, ‘righteous’, path. I beg to differ. The October Agreement was catastrophically bad in terms of the direction that it is taking Europe, not just due to its anaemic pace. (In my next posting I plan to sum up all the reasons for which the October Agreement is even worse for Europe than it is for Greece.) If I am right, it was the duty of our political leaders to say NO to it in Brussels last week. Each one of them, Mr Papandreou included, had the opportunity to withhold their signature then, thus causing the EU leadership to keep brainstorming until a decent, workable solution was found; one that would genuinely resolve the euro’s systemic crisis.
The Greek PM did not utilise his prerogative to say No to the October Agreement within the Council. Indeed, he returned to Greece eulogising it and calling upon the Greek people to embrace both the Agreement and his government, demanding brownie points for a difficult job well done. Soon after, however, he discovered that the public was hostile and his own MPs reluctant to afford him another lease of political life. With a wafer thin majority in Parliament, he faced two options: resignation or a fresh election. So, he opted for the… third option: A referendum on the October Agreement to be called for after the latter’s details have been finalised.
What was the logic for such a referendum? The Greek PM said that turning to the people signals a fundamental respect for democracy and a determination for turning the people into active participants in the shaping of Greece’s future. Such lofty idealism would be wonderful in itself. Indeed, I too think that referenda ought to be part of every well-functioning democracy. Alas, this referendum is as far from such ideals as a political ploy can be. What really happened was that, upon his return from Brussels (where, I repeat, he co-singed the October Agreement), he realised that his MPs were unimpressed. Nursing a wafer thin majority in Parliament (a majority of 3, which he himself has conceded is insufficient during these turbulent times), he decided that some pro-active move was necessary to give his government a new lease of life. Back in June he tried to lure the opposition into government. It backfired then and it would backfire again. The obvious alternative would be to call for a snap election. However, Papandreou knows that the voters would punish his party brutally, given half a chance. So, with a grand coalition and an electoral victory out, what alternative did he have? At the very least, he wanted another vote of confidence, securing a majority of at least 4 or 5 MPs in Parliament. When his whips told him that he is more likely to lose, rather than gain, backbench support in any new vote of confidence showdown, the referendum idea emerged as a possible solution: By offering MPs the referendum, they would now feel freer to grant Papandreou his vote of confidence on the basis that the MPs would no longer need to express the wrath of the electorate in Parliament since the people themselves will have an opportunity to do so directly!
If I am right, this Friday Mr Papandreou will get his vote of confidence in Parliament. And then what? How is he planning to overcome the referendum hurdle? His thinking is that, by then, Europe will have given him a few more crumbs by which to tell the Greek voters: “Here is the best deal I could extract from Europe, after having played a risky hand. Now, either you vote ‘yes’ or we are out of Europe altogether.”
In short, rather than an exercise in participatory democracy, the referendum is a shoddy, strategically ill-fated, morally corrupt and politically damaging ploy. Contrary to what is implied by the Greek PM’s minders, the referendum was never meant as a means of strengthening Mr Papandreou’s bargaining power over his European colleagues and the IMF. Had he cared to oppose the October Agreement, he ought to have done so in Brussels. No, the referendum is a means of extracting, first, a vote of confidence from his party’s battered MPs and, secondly, to impose upon the Greek people a hideous dilemma which identifies consent to the terrible October Agreement with a continued commitment to remaining in Europe. Rather than a gesture of granting Greeks a voice, this referendum is an attempt to gag the electorate.
My message to Mr Papandreou is simple:
- You have erred consistently on all major issues at hand, from the moment you became PM and discovered the sorry state of the Greek public finances.
- You sought out to deal with the debt crisis by means of loans, effectively proposing to deal with a bankruptcy problem as if it were a liquidity problem.
- You never succeeded in arguing a case for a systemic solution to a systemic problem, accepting the calamitous notion that this is a Greek debt crisis from which the rest of Europe can be, somehow, ringfenced by toxic institutions like the EFSF.
- You accepted ludicrous terms and conditions from our troika of lenders that no CEO, let alone a decent political leader, would have contemplated for more than a few seconds.
- You continued to beg for such loans and to celebrate every time they were extended or slightly modified under the crushing pressure of circumstances.
- You surrounded yourself with yes-men whose greatest utility to you was that they were… yes-men.
- You repeatedly announced, to a public hungry for good news, that the crisis was ‘finally’ resolved (in May 2010, in March 2011, last July, indeed last week).
- Now, in a desperate bid to cling on to power, you are attempting to gag your people by imposing on them a false choice between (a) an agreement which is bad for Europe as a whole and (b) staying in Europe.
- Perhaps the most damaging of all aspects of your referendum idea is that it will solidify in the rest of Europe’s collective mind the false impression that the problem is Greece; causing our partners to remain in denial about the roots of our collective problems in the eurozone’s design.
Mr Papandreou, you have caused enough damage to the Greek nation; indeed, to Europe. It is time to dismantle your tent, pack it up, and steal gracefully into the night.
Discussion
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Comment by: Michael Youlton
Nov 3rd 2011 at 13:11
No to the Merkel / Papandreou move
As the Greek PM returns from Cannes and calls for a Special Meeting of the PASOK Parliamentary Party this afternoon, as these lines are being written, it appears to me that this whole referendum machination was worked by Papandreou along with the Germans…..hard to tell if other forces had been involved. Time will tell.
A machination to try to avoid the definite NO that would have come from the Greek people by shifting the issue, changing the question to be asked, messing around with the dates, delaying the payment of the new tranche of the bailout
I agree with Yannis’ sentiments and analysis. Except that I am not so sure that the PASOK government will get its confidence vote tomorrow Friday. I hear two more PASOK Deputies, Eva Kaili and Elena Panariti have publicly stated this morning that they will vote against their party….the wafer thin majority is in tatters.
There is no other avenue for the progressive forces at the moment than rejecting the whole logic of this referendum shananigan, of following closely developments within the PASOK hierarchy and the ways the New Democracy Party will respond. Of note the comment of Evangelos Venizelos who publicly stated a couple of hours ago that he is against the holding of any referendum…Vaso Papandreou, on the other hand, repeated her call for a national unity government.
We need patience, we need unity of purpose, we need discussion, we need putting distance between ourselves and those ‘heroic’ individuals who are pushing for Greece to come out of the EU and reject the Euro…..that would be a disaster for our people, it will isolate Greece and will create and unbearable situation on many key issues Greece has to face at the moment: Turkish belligerence, Cyprus, and US backed pressures from the north……
I cannot think of a better closing line than a statement by the venerable Italian revolutionary Toni Negri who said: the situation is in such a mess that everything is possible…..disaster or small steps forward for the progressive forces are equally possible.
Comment by: Pope Epopt
Nov 3rd 2011 at 16:11
Erm - I think he’s just about to.
So that’ll be a national government and all power ceeded to Berlin/Paris/Brussels.
Now its down the the extra-parlimentary opposition, as elsewhere in the world of crisis.