It the eurozone explode, let it be in a burst of democracyPosted: November 1, 2011
At the surprise of the world, Greek Prime Minister announced today that the debt agreement reached last week will be submitted to the vote of Greek citizens in a referendum in the upcoming weeks — or more likely months. 1,2,3,4
This latest twist in the history of the Euro/Debt crisis throw the markets in doubt, once again, for there is one thing markets do not like at all: surprise.
The reason for this announced is not clear… It has, most likely, a lot to do with greek politic. But it is certainly a very dangerous gamble ; even more that the possible gain (continuing the slow and hard recovery process as planned) do not outweigh the risk of a rejection of the Papandreou government policies that would basically put a hold on the financial help provided by the BCE and the IMF.
It is not a secret that the general opinion in Greece is not hugely in favor of austerity measures and the control of the public finances by the troika. At first, one can be quasi sure of the referendum result : “No”.
But it is not said that Greeks citizen will reject the decision taken by Mr Papandreou… For several reasons : first because facing such a huge responsibility, the political parties might look for an half way exit, where the government might fall, but without derailing the international aid plans. Also, the greek citizens may convinced themselves that having a government they dislike taking unpopular measure is a more secure position than putting themselves into a dangerous position of uncertainty.
One thing is certain: if the referendum result is a No, the Greek government will fall, and the eurozone will be even closer to spontaneous fission. And there will be nothing to be done, unless the IMF and the EU take unprecedented actions that would clearly undermine the democratic process so much as to show that Greek citizen are not able to decide their fate anymore.
In the meantime, uncertainty is the word and that in itself may be enough to bring down the eurozone before the Greek vote does the trick.
Chaos is at Europe’s door, more than ever, Fate stands now upon the razor’s edge (not that it is new #)