The fate of Greece raises serious questions for all
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On Monday last, Greek Prime Minister, George Papandreou, appears to have suffered a rush of blood to the head, of the kind that used to afflict Taoiseach Brian Cowen in the final days of the latter’s ill-fated regime, and now looks likely to hasten his own political demise.
Noon today and the Greek government appeared on the point of collapse, some forty eight hours after Prime Minister Papandreou made his ‘shock’ announcement to call a referendum to give the Greek people a say in whether or not to accept the bail-out package painstakingly carved out by the EU a few days earlier and on which the ink was barely dry.
Reminiscent too of the fractious Cowen- Lenihan relationship, Papandreou had not informed his Finance Minister, and former leadership rival, Evangelos Venizelos, of his referendum gambit. Nor had he told anyone in the EU. Not the architects of the EU deal, Angela Merkel and Nicolas Sarkozy, not the EU Commission, nor anyone else either. Worse, he had apparently added insult to European injury by writing a letter to the EU demanding a renegotiation of the bailout terms.
“We have faith in our citizens, we believe in their judgment and therefore in their decision,” Mr. Papandreou was reported as saying as the political clamour from the Greek opposition for an immediate general election intensified in the wake of his referendum call. In the market turmoil that followed, as trillions were wiped off European stocks – much more than might have been required to fix the Greek problem in the first place – Mr. Papandreou received a summons to appear at the G20 Summit in Cannes to account for himself and his actions to the French and German leaders. He was given an ultimatum: Hold a referendum on membership of the euro within the next two weeks. Otherwise, the transfer of the 8bn euro tranche of bailout funding from the IMF and EU that Greece needs to draw down this month, in order to avoid sovereign default, will not occur.
On the flight home from Cannes, Mr. Papandreou is believed to have turned a deaf ear to his Finance Minister who, immediately on arrival in Greece, issued a statement stating his opinion that the Greek people should not be asked to make a decision on membership of the euro in any referendum. As support for Mr. Papandreou, within his Cabinet and his PASOK party, disintegrates, it seems unlikely the Prime Minister can survive a parliamentary vote of confidence on Friday if he even lasts that long. At this point, a government of national unity comprising the two main parties, PASOK and New Democracy, may be a preferred option to a general election that might fail to deliver any decisive result or possibility of political stability.
Mr. Papandreou’s foray into direct democracy on the EU bailout plan raises profound issues. By any standards, if the Greek Prime Minister was motivated in his call for a referendum by issues of personal political self-preservation, then his behavior must be deemed both reckless and irresponsible. But all that’s secondary to questions about what austerity politics and inadequate European responses to the debt crisis are doing to the lives of people not just in Greece, but here in Ireland, in Portugal, in Spain, Italy, even in the non-eurozone debt-burdened UK. Add to that the agonizing doubt that the price being asked in employment and public services, and the suffering inflicted across whole swathes of society, by this policy can deliver any positive redemption in the long run. It also raises questions about where the EU is going; in particular the shift in power towards France and Germany away from the ‘Community Method’ and the EU Commission, and whether the concept of a European Union itself is politically sustainable, even in the medium term, under such a model of governance.
In terms of our own national politics, serious scrutiny of the current strategy of our own government is also warranted. It’s difficult though, since government strategy is frustratingly obscure and confounded by habitual resort to stupid PR speak and spin by the Taoiseach and his ministerial colleagues, as recently exemplified in the case of the Anglo bond payout. Is it the case that the leadership of our government are incapable of making any impression on the EU in respect of Ireland’s interests? Or are they pursuing the wisest course in the present circumstances by playing a version of the three wise monkeys on the EU stage in the hope that whatever crumbs fall from the EU table, as the debt crisis resolution process works itself out, will inevitably accrue to our benefit?
If Greece implodes politically and economically, we’re likely to find out the hard way.