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.’‘
So why now? Especially when opinion polls seem to suggest most Greeks think the deal agreed at the Brussels summit last week is a bad one.
Papandreou’s likely explanation to French and German leaders in Cannes is that he had no other choice if he was to avoid more mayhem on the streets. It’s an argument unlikely go down well with many feeling his decision has put the euro zone once more in peril.
‘‘The problem, and it’s the biggest problem with referendums, is that people don’t often answer the question the referendum is asking. Instead, people often vote for or against the government. They show a red card to the prime minister. This factor in Greece cannot be excluded,’‘ Janis Emmanouilidis said.
Win or lose, one thing Papandreou’s referendum gamble has guaranteed is weeks of political and economic uncertainty. That’s the last thing EU leaders wanted and arguably why the Greek premier’s decision has aroused such anger.