Squeaky Greece Gets Its Referendum

At least the referendum on the Greek debt crisis finally puts some decision-making power in the people's hands.

Oh, Greece. Just when we thought that the European Union's bailout package would start to turn the continent around, you had to go and launch a referendum over whether your citizens want to accept the package's austere budget-cutting measures. In one of the understatements of the year, the National Post's Kelly McParland calls the referendum a "nervy move," cautioning that Prime Minister George Papandreou's gambit means that "there’s going to be no peace in Europe until it’s over." On the face of it, it's easy to find fault with the PM for putting the continent's stability in the hands of Greek voters, but that's just one of the problems of trying to hold together a multi-country union in which all of the members happen to be liberal democracies: you can only push the people so far until they've had enough of outside parties telling them how to run their country. But McParland sees a silver lining: "[Papandreou]'s betting Greeks will approve the austerity package even though they hate it, because they’ll realize that getting kicked out of the EU would be worse. The EU, after all, is at least willing to help; outside it, Greece could be left to go bankrupt on its own." Of course, that will only be the case if Greeks vote in their long-, long-term self-interest. Rare is it that citizens cast their ballots based on over the horizon thinking.

The Financial Times' Gideon Rachman points out that the Greek referendum is a natural reaction to the structural problems of a union that simply demanded too much of its members. Looking back at the 2005 vote on a proposed EU constitution, Rachman notes that France and The Netherlands, "were two founder members of the EU, voting on relatively mild proposals, in good economic times – and yet the votes were lost. Now imagine the Greeks voting, in the midst of a deep recession, on a package that promises further austerity and pain, as well as loss of national sovereignty?" And the inimitable British economist answer: "Quite." The referendum, then, "would be a hammer blow aimed at the most sensitive spot of the whole European construction - its lack of popular support and legitimacy." Important fundamentals to have in any alliance, those two.

And over in The Guardian, Nikos Dmitriou provides the vox populi to the Greek man in the street, giving us a look at just what the Greeks will have to put up with should the country default:

"Banks will be closed and nationalised, effectively freezing all financial transactions: capital controls will be imposed and payments – including salaries and pensions – will be halted. The government will have to take immediate steps to assure food, medical and fuel supplies, requiring an extraordinary degree of effective leadership, organisation and administrative competence, for which it's never before shown the slightest capacity. (Philosopher kings they are not. - ed.) The political leaders will control the nation's money. Likely to declare a state of emergency, they'll control everything. There will be unrest – its form and severity impossible to predict. Inevitably, it won't be restricted to the familiar, orchestrated, easily controlled shows in Athens, but will erupt in towns and villages across the land. Nor can anyone predict how forces set to restore order will react."

So in a word, chaos. And even if "Greeks behave the way theorists assume, if they react quietly and reasonably, calmly adapt to their devalued new currency, politely try to muddle through," the country will still have to deal with that small matter of rebuilding their economy from the ground up. Needless to say, Greece is staring down a the barrel of a gun. Can we really be surprised that the country's citizens might want to have a say in how they respond to that threat?