The Greek economic drama has once again turned into a political horror show following Prime Minister George Panandreou’s decision to hold a national vote on the country’s latest bail-out. While the rest of Europe has watched in shock, the fallout inside Greece has also been huge. Papandreou faces the threat of rebellion inside his governing PASOK party and calls for him to quit. For now, the Greek cabinet has endorsed the referendum offering the prime minister a stay of execution but Friday’s crucial confidence vote in Greece’s parliament looms.
Senior Analyst from the European Policy Centre Janis Emmanouilidis said: “Prime Minister Panandreou’s decision to call a referendum was really surprising. He’s trying to defuse the situation but the question is whether he is going to succeed. Even if the referendum takes place and it’s positive, it does not mean calm and political stability will return to Greece. Even then, the country could be politically unstable.’‘