Greek vote plan puts bailout efforts at risk

Greek vote plan puts bailout efforts at risk.

Bizarre. Greece is battling to remain a going concern. A few times it has looked like it might go under, but has been saved each time by last minute aid packages and agreements. The country is teetering on the edge, burdened with huge debt and a populace largely rebelling against the severe, but necessary, austerity measures. Having lived way beyond its means for so long belt-tightening is long overdue.

Forever on the precipice but as yet surviving another package is negotiated with the heavyweights of the Eurozone, Germany and France. It’s a long, long way from job done, and there are no guarantees of long-term survival, but this at least enables Greece to survive a little longer to fight another day.

Except, bizarrely, the Greek prime minister announces he wants to put the decision to a referendum. He announces this post-agreement and without consulting with his benefactors in the Eurozone. He doesn’t even speak to his Finance minister.

Why would you do that?

It’s understandable I guess when you consider that this decision has a lasting impact on the Greek people, and in Greece, the birthplace of democracy, perhaps the people should have a say in it. But surely that’s only a theoretical consideration. Do you really want to put the fate of the country in the hands of the people? Do you want to threaten the very package by making it subject to a plebiscite?

As a rule I’m against referendums except in particular circumstances. Governments are elected to make decisions. They are equipped, supposedly, with the skills, expertise and experience to make those hard calls. The people in electing them have ceded the authority to make decisions on their behalf. You cannot govern by consensus, and a government must be brave enough to do what is right regardless of public opinion.

If that is the general rule then it becomes much more pointed in this instance. The very future of Greece as an economically viable entity is at risk. Do you really want to put that to the vote? To a people stricken, and largely angry, about cutbacks to previously lavish entitlements and a raft of austerity measures affecting every one of them?

What if they vote against the aid package? What are the risks that the aid package will be withdrawn regardless of the outcome because this was not the deal? What are the risks that the delay in implementing the package will prove terminal regardless?

It’s hard to believe that a leader could make such an irresponsible decision, and almost incomprehensible that he would do it unilaterally, without even consulting his own people.

I doubt there will actually be a referendum. I think this probably spells the end of this government, and that might be for the best. I’m guessing the package will still go ahead some time and in some form. For the first time though really another question becomes pertinent: is Greece doomed?

Can Greece be saved? Mathematically yes, I’m sure, but it takes political will and strength of purpose, and that seems to be greatly lacking. Ideally it takes a populace onside with the program and by and large that’s not the case. Above all it takes the charity of Greece’s trading partners in Europe to help them out.

Till now Greece has been seen as the basket case that might drag the rest of Europe down with her unless she was propped up. To this point that is what has occurred. I wonder now at the doubts now developing in the minds of the European power brokers. Is it worth it? Can Greece be saved? What if we just cut her loose?

Cutting Greece loose means that she will default on billions of dollars of loans. The economic consequences will be vast, particularly in Europe; and Greece goes under, the poor man of Europe. The great risk is that other economies will follow, a domino effect of economic, and ultimately, social disaster.

What if Greece is but a black hole sucking up money from its benefactors without actually improving? How long does it go on for? When does the money run-out; at what point do Germany and France consider they’re contributing good money after bad? And when do they start to look to themselves and the rest of Europe and prepare for the worst eventuality – cutting the ties that bind, putting up a wall around economies and assets, and then effectively cutting Greece loose?

I don’t know the ins and outs of deals made in Europe, and I’m not an economic expert. I don’t think Europe will cut Greece loose, but I think it will be floating about in the back of their minds now as a consideration It’s an option now whereas it wasn’t realistically before.

It will be interesting to see what action Europe takes in the face of Papandreou’s decision: they will not want to be subject to the will of the Greek people. It’s much bigger than that, and they won’t like not being in control.This is much to important for that. Watch them step in to do something.

It’s like the classic lifeboat scenario, so much food and water to go around and a sick passenger taking up more than his share. At what point do they make the hard decision to concentrate on the living, rather than the near dead? One dies, or all?

Advertisements

Say your piece...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.