Thursday, November 3, 2011

Cancelling the Greek Referendum and Angela Merkel's Steely Focus

Two final thoughts today on the Greek crisis: 1) Under immense political pressure from within his own party, the opposition, and the EU - i.e., Germany - Papandreou was forced to cancel the referendum. But the basic idea was a good one: he knew Germany would demand even more austerity as part of the bailout payments, but he also knew how much horrible economic pain and suffering has already been inflicted on his people by the current austerity regime. As Mark Carney recognized, seeking their consent was the right thing for a democratic leader to do, as challenging as that would be given the circumstances. 2) Ms Merkel doesn't really care about Greece: all she cares about, as she has made clear yesterday, is stabilizing the Euro. That's all anyone else in the EU, for that matter, cares about too.

1 comment:

  1. Greece backs off referendum, dealing blow to euro-zone equality - The Globe and Mail Doug Saunders sees the erosion of democracy in this Greek drama:

    "In an effort to avoid a financial catastrophe, Europe’s leaders persuaded Athens late Thursday to back away from a referendum, but the result, which involved threats to expel Greece from the euro zone, has destroyed any sense of democratic solidarity uniting them.

    This probably staved off a devastating run on the euro that could have brought down the Italian and Spanish economies and placed France’s stability in peril.

    But it also ended the principle of unity among the 17 countries that share the euro: It is now possible for the wealthier members to override the democratic systems of the poorer ones.

    It was self-defeating victory. In order to win passage of the bailout package, the leaders had to assert that theirs was not a common currency at all, but one in which the wealthier export-nations held precedence over poorer, import-dependent, debtor nations."