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Greek Referendum Could Upend Euro Bailout

From a gleefully anticipating riots Associated Press:

Greece’s Papandreou Toughs out Referendum Pledge

November 1, 2011 (AP)

Greece’s prime minister held firm early Wednesday to his shock decision to call for a referendum on a hard-fought European debt deal, despite anger from abroad, market turmoil across the world and dissent from within his own party.

George Papandreou’s government still faced a battle for survival, with a vote of confidence scheduled for Friday and a grilling from frustrated European leaders expected later in the day ahead of the Group of 20 summit in the French Riviera.

After a grueling seven-hour Cabinet meeting that finished after 3 a.m. (0100GMT), government spokesman Ilias Mossialos said Papandreou’s ministers expressed "total support for the initiatives taken by the prime minister." He said the referendum would be held "as soon as possible."

However, government officials said two ministers still had strong reservations with the idea of a referendum, which will be the first in Greece since the country voted to abolish the monarchy in 1974. The officials spoke on condition of anonymity to reveal details of the Cabinet meeting.

Papandreou told his ministers that putting the issue to the Greek people was the only way to safeguard the European deal.

"We will not implement any program by force, but only with the consent of the Greek people," he said. "This is our democratic tradition and we demand that it is also respected abroad."

A referendum, he said, "will be a clear mandate, and a clear message within and outside of Greece, about our European course and our participation in the euro," he said, according to a text of his speech to the meeting issued by his office…

It also might be a way to have the street mobs put the kibosh on it. Which might be the Greek government’s secret wish. Nobody likes austerity. Everybody likes pie.

World markets were hammered after Papandreou’s surprise Monday night announcement amid fears the vote could unravel a deal which took European leaders months of complex negotiations among themselves and with banks to reach.

Greece’s general price index plunged to close down 6.92 percent, while in Germany the Dax index, the major stock market average, lost 5 percent — the equivalent of about 600 points on the Dow. The French stock market closed down 5.4 percent, the Italian 6.7 percent and London 2.2 percent. The Dow Jones industrial average finished down nearly 300 points, or 2.5 percent.

European leaders made no secret of their displeasure.

"This announcement surprised all of Europe," said a clearly annoyed French President Nicolas Sarkozy, who has been scrambling to save face for Europe before he hosts leaders of the G20 major world economies beginning Thursday.

"Giving the people a say is always legitimate, but the solidarity of all countries of the eurozone cannot work unless each one consents to the necessary efforts," he said…

French lawmaker Christian Estrosi was even more direct, saying on France-Info radio that the move was "totally irresponsible."

"I want to tell the Greek government that when you are in a situation of crisis, and others want to help you, it is insulting to try to save your skin instead of assuming your responsibilities," Estrosi said

Papandreou’s decision had left his government teetering on the verge of collapse Tuesday as his own deputies rebelled and his Socialist party saw its parliamentary majority whittled down to just two seats in the 300-member legislature with the defection of lawmaker Milena Apostolaki. Others called for the prime minister’s resignation and the creation of a national unity government.

"Yesterday’s surprise and irrational announcement of the referendum has led me to doubt something that I considered certain until yesterday: That I am a member of a group that is striving to save our country from bankruptcy," Socialist deputy Hara Kefalidou said

Man, when even the socialists are doubting the wisdom of such a vote, you know you are headed for trouble. But this is what the Greek government wants.

Unfortunately, it also seems to be what our government ultimately wants, as well.

This article was posted by Steve on Wednesday, November 2nd, 2011. Comments are currently closed.

One Response to “Greek Referendum Could Upend Euro Bailout”

  1. DW says:

    Here’s a very interesting development from the UK’s Telegraph:

    Greek military leadership changes spark opposition outcry
    By Paul Anast, Athens

    In a surprise development, Panos Beglitis, Defence Minister, a close confidante of Mr Papandreou, summoned the chiefs of the army, navy and air-force and announced that they were being replaced by other senior officers.
    Neither the minister nor any government spokesman offered an explanation for the sudden, sweeping changes, which were scheduled to be considered on November 7 as part of a regular annual review of military leadership retirements and promotions. Usually the annual changes do not affect the entire leadership.
    “Under no circumstances will these changes be accepted, at a time when the government is collapsing and has not even secured a vote of confidence,” said an official announcement by the opposition conservative New Democracy party.
    “It has no moral or real authority any more, and such surprise moves can only worsen the crisis currently sweeping the country”.

    Full article:

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