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Why is the Greek Referendum Right, but Absolutely Wrong?

This year has been all about Greece. The troika, meaning the IMF, ECB, and Commission, have been working on containing the Greek crisis and limiting the contagion to the rest of the Union and ultimately to the global markets. The outcomes of the meeting over the weekend are a new bail-out plan and more ‘haircuts.’ On one side Greece would receive additional bail-out tranches, while on the other side, cutting what is left of the Greek welfare system.

Domestically, the Greek Prime Minister George Papandreou is facing a very difficult situation: mass strikes, low approval rate, and limited support from the rest of the government. It is a politically untenable position. Well a day after a long weekend for all the European heads of state and government, Mr. Papandreou literally dropped the R-bomb, a referendum on the second bail-out package. As illustrated in one of the excellent cartoons in the Financial Times of Wednesday, November 2, 2011, the question raised was: “Do you want to have your wages cut and your taxes raised?” Even though it is a little simplistic and grotesque, it holds a certain truth to it wondering about the utility and appropriateness of such a referendum.

For Mr. Papandreou to declare that Greek citizens should decide of their faith is more a sign of arrogance and personal vengeance rather than a move from a guardian of the Greek democracy. World citizens – at no exception – have been completely bypassed by governments, central banks, and financial institutions since the collapse of the Lehman Brothers in 2008. The decisions made to go ahead and bail-out the big banks – the too big to fail category –, slash public spending, lower the power of the welfare state and so on did not include European and American citizens. The emergence of movements such as the Tea Party, les Indignés, Occupy Wall Street and others is a direct response to the erosion of democracy and the limited power of citizens in the higher spheres of politics. So for the Greek Prime Minister to make such declaration is more a sign of arrogance towards the rest of Europe by saying that Greece remains a sovereign state. It is also a very rational move from a politician trying to save his career by avoiding a personal failure and a probable demonization by Greek fellows.

The reactions across the Union and even across the Atlantic are quite interesting. It is not difficult to imagine the faces of Mr. Sarkozy, Ms. Merkel, and Mr. Cameron after learning about the referendum. According to the FT, “reacting with scarcely disguised anger to Athens’ unexpected move, Angela Merkel […] and Nicolas Sarkozy […] summoned George Papandreou […] to emergency talks in Cannes on Wednesday to buttress the Eurozone’s position on the eve of the G-20 summit.” Sarkozy has been one of the most vocal on the Greek R-bomb, and he declared that “This announcement of a referendum surprised all of Europe. France wants to remind Greece that the unanimously adopted plan last Thursday of 17 Eurozone members is the only way to resolve Greek debt problems. Giving the people the chance to express themselves is always legitimate, but the solidarity of the whole Eurozone can only be sustained if everyone does what they are supposed to do.” Sarkozy’s plans prior the G-20 meeting taking place in the French city of Cannes this coming weekend, were to show the world economic powers that the EU was able to agree on a plan. Instead, Sarkozy has been trying to maintain unity. Frederic Delpeche clearly explained that “Greece’s actions are a cold shoulder for Sarkozy, and he has been weakened by it. He thought he would be able to show off this ambitious plan. Now they’re trying to pick up the pieces and glue the thing back together in last-minute meetings.”

European leaders all very well understand the meaning of it and the consequences of a global contagion. However, the European leaders are politicians playing politics. The political game has gone on for too long and clearly endangered the stability of the Union politically and economically. The hypocrisy of European political parties and especially in France is quite striking, but not surprising. For example in France, in a period of elections for the presidential race of 2012, the Socialist Party as well as the Front National – extreme right – are supporting the Papandreou’s plan for a referendum for obvious political gains. This political game has to cease as the credibility of the Union and of its leaders in solving the crisis is at stake.

In a very well written piece, “Union of Choice,” Ronny Patz wrote a positive – which is hard to find in these dire times – and insightful piece on the future of the EU. His argument is that the EU can survive as Europeans realize the benefits of the Union. The European citizens are the missing element for a successful Union. Ultimately, the EU and the euro will survive and be successful if Europeans decide its future and shape.

Last, in case the Greek Prime Minister survives European and world pressures and decides to move ahead with the referendum, the right question should be: Should the Greek political elite responsible for the crisis be held accountable and sent to jail?

 

Author

Maxime H.A. Larivé
Maxime H.A. Larivé

Maxime Larivé holds a Ph.D. in International Relations and European Politics from the University of Miami (USA). He is currently working at the EU Center of Excellence at the University of Miami as a Research Associate. His research focus on the questions of the European Union, foreign policy analysis, security studies, and European security and defense policy. Maxime has published several articles in the Journal of European Security, Perceptions, and European Union Miami Analysis as well as World Politics Review.

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