However, there are some rather interesting possibilities (as well as a simple explanation).
The Slog outlines a scenario that Papandreou’s bailout referendum bombshell was inspired by Merkel in order to trigger major losses in French banks, causing France to lose its AAA rating, culminating in a total Merkel victory and German revenge over France.
Wow.
As convoluted and conspiratorial as that sounds, it makes for highly entertaining reading (and it's also well presented). On the other hand, my readers know I am a firm believer in "Occam's Razor" which suggests the simplest explanation (the one making the fewest assumptions) is likely to be the correct one.
Certainly, one should never rule out stupidity when that is one of the possibilities. An even simpler explanation is that Papandreou is simply tired of the beatings, and the meetings, and the riots, and has simply decided to "walk away" from the mess by handing the decision over to the voters.
I believe that is the "most likely" explanation even though The Slog presents a very good case that Papandreou Planned this Referendum in Advance with help of his interior minister.
However, planning for a referendum and being prepared for one in advance (if necessary) are two different things. Thus, I suggest (and so would Occam's Razor) that Papandreou saw a potential need for a referendum down the road, and that potential need turned into reality.
One final puzzling aspect to this mess is that just three days ago Papandreou affirmed his commitment to the EU/IMF Troika solution. So what's up with that? Once again no one knows except Papandreou but I will stick with the assessment there is a simple explanation that is not readily apparent right now.
In Praise of Democracy and Choices
With that backdrop, and with the statement I do not like Papandreou personally, I praise Democracy, and by implication, Papandreou's decision.
Is there any reason Greek voters should not be given a choice? I think not. They may not make a wise choice but what is the likelihood that political hacks and political opportunists will?
Iceland Referendum a Winner
Take a good look at Iceland. In repeated attempts, political hacks (with banker's interests in mind) attempted to sell Icelandic citizens into debt slavery. A referendum saved the day. Sadly, voters were forced to repeat the referendum, and once again voters made the correct decision.
Iceland is now in full recovery simply because it told the EU and IMF to go to hell.
No Easy Way out for Greece
Greece does not have an easy way out. However, its problems are no doubt far worse than if it told the Troika to go to hell two years ago.
Greece should have gone bankrupt long ago. Heck, Greece should not be in the European Monetary Union (EMU - Eurozone) in the first place, and EMU bureaucrats are primarily to blame even though Greece lied to get in.
Speaking Against Political Hypocrisy
Peter Tchir at TF Market Advisors (and one of the best authors on Zero Hedge) also praises democracy. Yesterday he pinged me with this set of comments.
If a leader in the Middle East finally gave into months of protest and decided to give the people a real say on an important issue, the Western leaders would be rejoicing. Obama would have a podium and be uttering his support for the Courage of the people who stood up and give the Arab spring his full blessing.Eloquent Praise for Democracy
But if a fellow Western leader dares let his people express their wishes more directly than via "their representatives" they are all shocked and outraged. In the meantime other Greek politicians are busy taking advantage to gain power rather than helping their citizens.
Pater Tenebrarum at the Acting Man blog eloquently discusses democracy in his post Papandreou Calls For Referendum On Bailout
Embattled Greek prime minister Papandreou has found a way to stick it to the eurocrats in a most elegant manner: instead of continuing to serve as everyone's favorite whipping boy, he has decided it is time to let the Greek people themselves speak out on the future of their country. In a surprise announcement yesterday, he told parliament that Greece is to hold its first referendum since 1974 and that the population would be asked whether it wants to accept the conditions of the bailout plan or not.Eurocrats are Terrified of Democracy
The eurocracy is at its heart deeply undemocratic – if it were up to the 'technocrats' leading it, national subsidiarity would have long ago become a relic of the past and democratic interference with their plan to erect a socialist super-state would be kept to a bare minimum.
This can be seen by the fate suffered by previous referendums: when the Irish and French e.g. said 'no' and 'non' respectively to the Lisbon treaty, the referendums were simply repeated to get the 'right' result. As Stalin once sagely remarked, it doesn't matter who votes for what anyway – what matters is who counts the votes. So far, the eurocrats have always gotten the results that they wanted, by hook or by crook. Lately this has become a bit more difficult, as evidenced by recent decisions of the German constitutional court, whose chief justice Andreas Voßkuhle even went as far as demanding a referendum for German citizens as well if the government wanted to cede any more of its fiscal sovereignty to the eurocracy in Brussels.
Greece is the cradle of Western democracy - it is only fitting that it should upset the EU applecart by means of actually practicing it.
Tenebrarum certainly hit the nail on the head and so did Daniel Hannan on The Telegraph with his post Eurocrats are Terrified of Democracy
Shall I tell you the truly terrifying thing about the EU? It’s not the absence of democracy in Brussels, or the ease with which Eurocrats swat aside referendum results. It’s the way in which the internal democracy of the member states is subverted in order to sustain the requirements of membership.Parade of Cowards
George Papandreou, the luckless Greek leader, is the latest politician to find himself being chewed up because he stands in the way of the Brussels machine. On Monday afternoon, Papandreou announced a referendum on whether to accept the EU’s bail-out terms. He had evidently had enough of the antics of the opposition party, New Democracy, which kept insisting that Greece remain in the euro, while opposing all the austerity measures necessary to that end – an outrageous stance given that New Democracy ran up the deficit in the first place. Papandreou hoped to force his opponents off the fence: in favour of the spending cuts or against euro membership. Perhaps he also hoped to put pressure on the EU to offer more generous terms.
I wish I could convey the sheer horror that his proposal provoked in Brussels. The first rule of the Eurocracy is “no referendums”. Brussels functionaries believe that their work is too important to be subject to the prejudices of hoi polloi (for once, the Greek phrase seems apposite). Referendums are always seen as irresponsible; but, at a time when the euro is teetering on the brink, Papandreou’s proposal was seen as an act of ingratitude bordering on treason.
Eurocrats are prepared to pay any price rather than admit that the single currency was a mistake – or, more precisely, to expect their peoples to pay, since EU officials are exempt from national taxation. The peripheral countries are to suffer poverty, unemployment and emigration, the core countries perpetual tax rises, so that supporters of the euro can save face.
It’s chilling to write these words, but EU leaders are evidently prepared to vitiate Greek democracy and wreck the Greek economy rather than allow the euro to break apart. Yet even if they succeed in Greece, they may find that their efforts are for nothing. Italian bond spreads yesterday were back at the level that usually triggers bail-outs. We are about to see quite how far the Brussels apparat will go in defence of its privileges.
In contrast to Hannan, Tchir, and Tenebrarum, the parade of bureaucratic cowards terrified of democracy is nearly endless. Here are some prime examples.
- French President Nicolas Sarkozy said in a rare televised address on the steps of the Elysee palace in Paris. "The plan ... is the only way to solve Greece's debt problem." (Reuters)
- Daniel Knowles writing for The Telegraph has this story headline - Peace in Europe lasts just five days as Greece turns to blackmail
- Dutch Prime Minister Mark Rutte said he would try to prevent the referendum plan, saying he would "attempt to see that it doesn't happen." (AP)
- Socialist deputy Hara Kefalidou said "I cannot back a referendum which is a subterfuge by a government that appears unwilling to govern." (AP)
- French lawmaker Christian Estrosi said 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. (AP)
- Nicolas Sarkozy’s spokesman described Papandreou’s announcement as “irrational and dangerous” (Telegraph)
- Constantine Michalos, the president of the Athens Chamber of Commerce, called the proposal “an act of political blackmail” (Telegraph)
- Antonis Samaras, the leader of New Democracy, vowed – with splendid disregard for his party’s name – to prevent a referendum “at all costs” (Telegraph)
Ultimate Irony: Papandreou a Fervent Euro-Enthusiast
Here is one more clip by Daniel Hannan on The Telegraph worth reading.
Euro-enthusiasts in Brussels and in Athens are ready to bring down an elected government rather than allow a referendum. Yet the funny thing is that Papandreou is a Euro-enthusiast. He fervently wants to remain in the euro, and had been planning to campaign for a Yes vote. His sin, in the eyes of Brussels, was not to hold the wrong opinions, but to be too keen on democracy. Leninists had a term for people who, while they might be committed Bolsheviks, none the less behaved in a way which endangered the movement. They were called “objectively counter-revolutionary”. Poor Papandreou finds himself in this category.Help?! What Help?
Of all the cowards, the statement by French lawmaker Christian Estrosi is the most galling: "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."
Whose Skin Are We Saving?
No eurocrat or politician outside of Greece gives a rat's ass about helping Greece. The only skin they want to save is their own.
That realization coupled with my earlier proposal that Papandreou was tired of beatings, meetings, and riots is by far the most likely reason Papandreou decided to "walk away" from the mess via referendum.
It's a pity he did not do so long ago.
Addendum:
Reader Jeff Miller, Associate Professor NSU Oklahoma College of Optometry writes ...
I am also a firm believer in Occam's Razor and I think Hanlon's Razor also applies: "Never attribute to malice that which can be adequately explained by stupidity."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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