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Greek PM Papandreou’s gamble on a referendum

Text by Sébastian SEIBT

Latest update : 2011-11-03

Greek Prime Minister George Papandreou surprised Europe on Tuesday by announcing an impending referendum in Greece on the European bailout plan drafted in Brussels on October 26. Was the move a democratic gesture or a political calculation?

With one quick announcement, Greece’s Socialist Prime Minister George Papandreou pulled the rug out from underneath European heads of state who had drafted a plan to bail out his country and save the eurozone. His decision to submit the plan -- agreed upon on October 26 – to a referendum sent shock waves through Europe, and sent financial markets into a tail spin.

If Greeks reject the bailout in the referendum scheduled for December 4, the consequence could be “a return to the drachma [former Greek currency]”, Dr Spyros Economides, a specialist in the Greek economy at the London School of Economics, told FRANCE 24.

Papandreou the puppet?

It was above all the timing of Papandreou’s announcement of the referendum that most surprised European leaders. “After such long negotiations between European heads of state to reach an agreement last week, it’s difficult to understand his decision,” assessed Economides. “The Greek prime minister has been striving to follow the International Monetary Fund and eurozone recommendations for the past two years, so why is he making this move right before the G20 summit?” asked Céline Antonin, a specialist in the Greek economy at the French Economic Observatory, in an interview with FRANCE 24.

Papandreou is the grandson of the founder of Pasok, Greece’s Socialist Party, and as such, is the heir of one of the country’s most important political families. His decision to put the European plan to a referendum allows him to avoid looking like a puppet of the triumvirate of economic institutions composed by the IMF, the eurozone, and the European Central Bank. Indeed, since early 2010, Papandreou has consistently applied a series of austerity measures under pressure from other eurozone countries and the IMF – even though he “was elected in November 2009 on an anti-austerity platform”, as Columbia Univeristy doctoral candidate Thomas Meaney and George Washington University Professor Harris Mylonas pointed out in a blog post published Wednesday on CNN.com.

That notion of the Greek prime minister rebelling against his “masters” is contested by Spyros Economides of the London School of Economics. “The idea that Papandreou has just been a puppet of larger economic institutions does not hold up,” the economist said, noting that “the privatisation programme proposed to him was not established, and the fiscal reforms he was asked to implement are not as strict as they were intended to be”.

Political calculation

Others see in this referendum a welcome return to the democratic process in the search for solutions to the economic crisis. “European solidarity cannot be expressed exclusively through secret meetings between heads of state in Brussels,” wrote a blogger on the site of right-leaning French daily newspaper Le Figaro.

“It is indeed honourable to want to give the people the last word, but it would have been more logical to organise special general elections that would have generated discussion of possible alternatives to the policies proposed by the government,” Economides said. But such an initiative would have been risky for the Greek Socialists, who have been harshly criticised for the austerity plans they’ve implemented.

The decision to hold a referendum appears above all to be a domestic political maneuver. “It’s a gamble executed by a profoundly unpopular politician,” Economides assessed. “The referendum will offer a choice between Papandreou’s policies and the chaos of leaving the eurozone.”

In the meantime, the saga continues: on Thursday, amid rumours of his resignation, Papandreou called a meeting of Socialist deputies to discuss the crisis. On Friday, he will face a confidence vote in Parliament.
 

Date created : 2011-11-03

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