Greece Has Started Playing a Russian Roulette Game
Adelina Marini, 2 November 2011
There is no other way to call the Greek PM, Georgios Papandreou's decision to call a referendum on the second bailout programme for Greece, worth 130bn euros. And the problem is not in the referendum as such. There are several other problems: first is the timing; second is the democratic dossier of Greece for the period since the country is independent, as of the end of the 1970s; third is the global environment.
A very "good" timing
The most shocking in Greek PM's statement in fact is that he did it literally a week after the eurozone leaders (he also attended) succeeded in achieving a painful comprehensive agreement, which includes rescuing Greece too. This rescue now resembles more sustaining a person in a coma without him having any real chances to wake up. The ink is still not dry on the document, where, please note what concessions are stipulated, that have to be made by the private creditors, the member states and the international financial institutions:
- A decision was taken the sixth tranche under the first bailout programme for Greece to be paid in November, although the report of the Troika (the ECB, the Commission and the IMF) shows that Athens has not managed to implement its commitments, nor that it stands a chance to do it in the promised volume;
- The European Commission will send technical teams that are supposed to help the Greek authorities to handle the difficult task of building a stable system for tax collection; to realise a massive privatisation and to make an overall optimisation of the public sector which, according to analysts, employs every fifth Greek!
- The cherry on the cake, agreed on Thursday morning, is the participation of the private sector in achieving sustainability of the Greek debt. In order to ensure reduction of the Greek debt to 120% of GDP, from the current 166%, by 2020 the private sector commits as of the beginning of 2012 to drink a glass of cold water for 50% of the Greek debt.
- Separately, obviously the Greeks ate well and behaved because Santa Klaus is going with a big bag with presents - the eurozone member states commit to contribute with a package of 30bn euros taxpayers' money, and the joint efforts of the other financial institutions will pour another portion of 100bn euros by 2014. And what the European Commission promised yet in the summer was Greece to receive help when absorbing EU funds by increasing co-financing.
And all this with the single aim Greece to be saved because thus the euro as a concept will be saved, and also the investments of big European banks, therefore the European depositor and taxpayer.
The homeland of democracy
It is a fact that history points Greece as the home country of democracy. Alas, many centuries passed since then and the country went even through military junta and could be called free as of the 1970s. Then there was a plebiscite for the last time - in 1974 when the Greeks threw away the monarchy. By its accession to the EU Greece was ruled by a socialist dictatorship of family-clan type, which still goes on. There are almost no new faces in Greece's politics. Referenda were not held neither for Greece's EU accession, nor for its joining the eurozone, or for NATO.
From this perspective the decision of the Greek premier is strange, given that he could have said this to his partners in the EU last Wednesday, when the new package was being negotiated.
The world is in shock
The news about the referendum was announced just two days before the beginning of a key summit of the G20 in Cannes, at which the issue of the eurozone debt crisis, which fevers the rest of the world too, will be a major issue. EU's partners in the G20 warned several times that they expected the leaders to emerge in Cannes with concrete decisions as the situation of uncertainty and tension further deteriorates the already grim mood of the global economy.
What to do?
The Greek case caused the EU leaders for a second time only in a year time to utter words-taboo until recently - changes in the EU treaties. Given the Wednesday agreements, though, again limited changes are envisaged, meaning such that avoid touching the basic structure of the Union and challenging the countries where holding a referendum is mandatory. After the Greek news, however, it is already clear that what the EU has to do is to start anew. An overhaul of the treaties is needed of the parts concerning the membership criteria for the eurozone and the EU in general, as well for Schengen, and all this to be complied with the current situation. This can mean that mechanisms must be envisaged for expelling countries that only imitate fulfilment of criteria.
After all, with this week's decision the price for rescuing Greece has surpassed what the EU can afford to pay for it and this is why it is time Greece to be left to its own democracy and evolutionary path. And to avoid the possible expulsion of Greece from the eurozone to break the entire monetary union, it might be considered part of the agreements, aimed at saving Greece, to be transferred through bypasses to the other countries with programmes, like Ireland and Portugal, who already signal that their situations are getting better. The situation with Italy can be controlled better if Greece would leave because this would give a clear signal to the Italians and their political class that the time of cheap tricks had gone.
In any case, when the treaties are to be revised and tough, or even brutal membership criteria are hammered out, Italy will remain outside, but at least it will have time to prepare for the shock. So, it might appear that the Greek decision in the long run could be very healthy for everyone, even for the Greeks themselves. Even healthier it might be for those EU member states who firmly believe that they can continue unnoticed to do what they want and not what they have to. If they insist on doing what they want - they should do it outside!