New post on Greece

This will now be updated as and when anything is known in such a way that people can see the latest first. Even I can work that out.

15.28 Prime Minister's statement says that there will be no referendum and he probably never intended to have one.

Greece's Prime Minister has told Sky News the referendum on the the eurozone bailout plan will no longer go ahead - and it was never his intention for it to happen.

"The referendum was never an end in itself," George Papandreou told the cabinet according to statements released by his office.

"We had a dilemma - either true assent or a referendum. I said yesterday, if the assent were there, we would not need a referendum."

Mr Papandreou had been under pressure to stand down, as a split emerged in his government over the plans to hold a public vote on the rescue deal.

He now says he has no intention to quit, but will hold talks with the opposition over their calls for a transitional government and early elections.

However, he warned against holding elections in the near future - as this would entail a "big risk of bankruptcy".

Presumably, the confidence vote will go ahead and if the Greek Parliament still has any confidence in the Prime Minister then they deserve all they get.

Here is an English (after a fashion) version of Mr Papandreou's statement. Mind you, I don't suppose it's any more comprehensible in Greek.

15.07 Reuters live update says at 2.58 that referendum is unlikely to go ahead but the confidence vote is. Just before that it was reported that Prime Minister Papandreou is still opposing election and saying that eurozone membership is not in question. I call that whistling in the dark.


14.50 Referendum seems to have been cancelled, according to Sky.

14.33 Still only calls for Papandreou to resign. The BBC is withdrawing its earlier report.

Earlier the BBC reported that the prime minister was preparing to offer his resignation.

But state TV later reported that he had ruled this out during the meeting.

The opposition New Democracy party has said it would accept taking part in a coalition government if Mr Papandreou agreed to stand down.

Reuters was right.

In the meantime, here is an analysis of the situation by Allister Heath, who says that "Europe" is finally giving up on Greece.

Many in Brussels are livid at Papandreou’s decision to ask the people what they think, always a no-no to undemocratic elites. But European taxpayers are also rightly angry; as far as they are concerned, beggars cannot be choosers and Greece should either do what it is told or be thrown out. The arrogance of those who believe that they are entitled to live beyond their means forever, courtesy of taxpayers in harder-working, less corrupt economies, is indeed extraordinarily galling. The Germans and many others would undoubtedly vote to throw Greece out of the EU if they were given the choice in a referendum.

The Eurozone’s main aim now will be to contain the fallout from any Greek default and withdrawal from the euro. The value of Greek assets (land, equity and debt) redenominated in a new drachma would slump 70-80 per cent. Combined with inevitable capital controls, social collapse and mass nationalisation, the chaos would inflict huge losses on all companies with operations in the country. The European Central Bank itself may become insolvent as its Greek government bonds would become near-worthless. It too may require recapitalisation. Yet it would undoubtedly provide liquidity to those hit by the write-offs; the printing presses would go into over-drive.

Read the whole piece.

Al-Jazeera says more or less the same thing - the eurozone leaders have had enough. After all, they have an electorate to think about, as well. I cannot understand why anyone should be surprised by that. The really surprising thing is that this farce has been allowed to go on for this long.

13.23 Commission insists that you cannot leave the eurozone without leaving the EU but the spokeswoman does not cite the relevant Articles. Greek Cabinet still seems to be in session.

Back to Greece

It seemed all set yesterday. The Prime Minister of Luxembourg announced the date of the Greek referendum (December 4 or 5) not waiting for the parliamentary vote of confidence or the Greek President to do the necessary and George Papandreou was told by Angela Merkel and Nicolas Sarkozy that Greece cannot have any more money until they sort this mess out. (EUReferendum was being updates as it happened.) That should concentrate their minds, thought I.

Came the morn and the situation has changed. It seems that Papandreou's government may fall tomorrow or even today and he might be removed from being PASOK's leader. The Guardian says

The Greek government stands on the point of collapse, with the country set for a general election over membership of the euro rather than the referendum planned for early December.

Calls for a national unity government embracing the opposition also intensified as EU political leaders and financial markets demanded an end to the regional uncertainty unleashed by a small country on the periphery of the eurozone and called for measures to prevent a slide into Europe-wide slump.

George Papandreou called an emergency meeting of his cabinet for noon local time (10am GMT) on Thursday after his finance minister broke ranks over the referendum and several socialist deputies quit or threatened to quit his Pasok bloc in parliament.

Papandreou's political survival both as prime minister and head of the Pasok party will be determined by the cabinet meeting. Filing into parliament for the session MPs said they would listen to the leader's assessment of the Cannes meeting before they "made up their minds" as to whether to back the confidence motion.

A government of national unity, eh? Now that really will sort them out. What will the armed forces say?

Reuters says that the Prime Minister has not resigned and, according to his chief of staff, "does not intend to". Certainly not. The link will take you to an "as it happens" thread on the news agency's site, produced in delightfully old-fashioned typewritten scroll.

UPDATE: It seems that the Greek Cabinet is still in session (oh to be a fly on the wall with adequate knowledge of Greek) but the odds are not good for the Prime Minister.

Greek state television says Mr Papandreou will meet Greek President Karolos Papoulias immediately after the cabinet talks.

The BBC's Mark Lowen, in Athens, says Mr Papandreou is expected to offer a coalition government with a former vice-president of the European Central Bank, Lucas Papademos, at the helm.

Mr Papandreou himself is expected to step aside, our correspondent says.

He says three Pasok MPs have now said they will not vote for Mr Papandreou in the confidence motion on Friday.

Several others, including government ministers, have criticised the referendum plan, calling instead for Mr Papandreou to resign or for a government of national unity.

Meanwhile, I note that the worship of plebiscite goes on with numerous eurosceptics making a hero out of a crafty, self-serving politician.

UPDATE: BBC says Papandreou will offer to resign.

He is expected to offer a coalition government, with former Greek central banker Lucas Papademos at the helm.

The Cabinet meeting appears to be still going on.

UPDATE (12.52): Cabinet meeting still going on and the colleagues are considering a eurozone without Greece. Ought to have done that a long time ago.

On another front

Taking time out from the Greek farce (I wonder when the satyrs, so indispensable to a farce, will appear) this blog wishes to call attention to the appalling case of the satirical journal in France that has been fire bombed for the appalling sin of laughing at Islam. Making fun of religion has been the prerogative of every French journalist since the days of Voltaire and is certainly taken seriously by the French literary establishment.

Well, mostly. When Charlie Hebdo transgressed last time by publishing those Danish cartoons (which the British main-stream media would not do)

Jacques Chirac, then the president, called it a “manifest provocation”. “Anything that can wound the convictions of others should be avoided,” he declared.

In my previous existence as co-editor of EUReferendum, I wrote about the subsequent legal case here and here. The legal case failed so the freedom-loving opponents of Charlie Hebdo have decided on another tactic. This time they annoyed even the French political establishment.

François Fillon, the centre-right prime minister, not only denounced the attack, but declared that “freedom of expression is an inalienable value”. Bertrand Delanoë, the Socialist mayor of Paris, deplored the “act of violence against the freedom of expression”.

French Muslim leaders are indulging in the kind of double talk we are sadly used to:

Mohammed Moussaoui, leader of the French Council of the Muslim Faith, an official body, condemned the attack, and stated his “profound attachment” to freedom of expression. But he also “strongly deplored the very caricatural tone” of the newspaper towards Islam.

Charlie Hebdo is satirical about everyone. That is what they do - they publish satire. Some people laugh, some shrug their shoulders, some get angry and some .... fire bomb offices and demand victim status on top of it.

Beware Greeks bearing constitutions

Right, let's sort this out. According to Bruno Waterfield, as quoted by this blog (and elsewhere) yesterday, Prime Minister George Papandreou is unlikely to call that referendum because he will need three-fifths of parliamentarians to vote for it and that is highly unlikely to happen. According to the Grauniad, as quoted by EUReferendum, not so. A battle of hacks, with the Torygraph lining up in expertise against the Grauniad.

It would appear that Mr Waterfield consulted the 1975 text of the Greek Constitution, in which Article 44(2) says:

(2) After a decision taken by a three fifths majority of the total number of the members of the Parliament, in accordance to a proposition of the Cabinet, the President of the Republic shall proclaim by a decree referenda on national questions of crucial importance. After a decision taken by a three fifths majority of the total number of the members of the Parliament, following a proposition of the two fifths thereof, the President of the Republic shall proclaim by a decree referenda on bills passed by the Parliament regarding serious social issues, with the exception of fiscal bills, in accordance to the Regulation of Parliament and a law regulating the application of this Paragraph. The proposition of more than one referendum on bills in the same Parliamentary Term is prohibited.

Having read it through about six times I think I have understood what it says and, according to this, the Torygraph's expertise wins.

Then we find that a highly respected source says otherwise. In this paper, published by Democracy International we find the following paragraph:

National referenda are regulated by the Greek Constitution (Article 44(2)), which provides for two categories:

1) Referenda on “crucial national issues,” following a proposal by the government and
approved by the absolute majority of the Parliament, or

2) Referenda on passed laws regulating “serious social issues,” upon a vote by 3/5 of the Parliament following a proposal submitted by 2/5 of the Parliament. A maximum of two proposals for such referenda can be submitted during the same parliamentary
term (normally of four years), and they cannot concern the State’s fiscal issues.

What constitutes a “crucial national issue” or a “serious social issue” is a political question left at the complete discretion of the abovementioned organs of the State.

The authors then add that constitutional amendments are not subject to referenda [sic] and, in fact, none have been held since the restoration of democratic government in 1975.

A conundrum there and very typical of a dysfunctional Balkan state. Checking another text of the Greek Constitution, I find that, indeed, the paper is correct:

* 2. The President of the Republic shall by decree proclaim a referendum on crucial national matters following a resolution voted by an absolute majority of the total number of Members of Parliament, taken upon proposal of the Cabinet.

A referendum on Bills passed by Parliament regulating important social matters, with the exception of the fiscal ones shall be proclaimed by decree by the President of the Republic, if this is decided by three-fifths of the total number of its members, following a proposal of two-fifths of the total number of its members, and as the Standing Orders and the law for the application of the present paragraph provide. No more than two proposals to hold a referendum on a Bill can be introduced in the same parliamen- tary term.

Should a Bill be voted, the time-limit stated in article 42 paragraph 1 begins the day the referendum is held.

One would assume that in this case the reason for the proposed plebiscite referendum would be that it is a crucial national matter and an absolute majority, i.e. a simple majority of the total Members of Parliament would be sufficient. We have to assume that if some members do not vote or are away and the absolute majority is not attained, the proposal falls.

Reading through the text I noted that several Articles, including this one, were starred. Could they have been amended or introduced in 1986 when the whole Constitution was amended? Indeed so, as we find in this work (discovered by the Boss on the other side of the blogospheric divide).

The amendments to the Constitution were introduced after several years of political and parliamentary instability in Greece (surely not!). On pages 68 and 69 some of the details are elucidated. The main point from our perspective is that the President, on proposal from the Cabinet can declare a plebiscite if there is an absolute majority in Parliament for it.

That, presumably, is Prime Minister Papandreou's plan. There are a few obstacles in the way. One is the confidence vote this Friday, which he will probably win, if narrowly, especially if he plays the "heroic democrat and patriot" card. Then, presumably, there has to be that vote for a referendum and the need to get an absolute majority. That may prove to be more difficult. Then, of course, comes the referendum itself and the question of which is more convenient to the Prime Minister, a 'yes' vote or a 'no' vote.

What happens if the plan falls either at the first or the second hurdle and Mr Papandreou does not get to hold a referendum, being forced, instead, into an election he desperately does not want? Well, that remains anybody's guess but the President, allow me to remind readers, after consultation with the Council of the Republic can dissolve parliament in extreme circumstances. And that brings us back to that vexed question of the replaced officers.

The worship of the plebiscite

The concept of referendum has now become an object of worship for some people, complete with religious hysteria. Is this because the CofE has once again shown itself to be somewhat inadequate? Would it still work if we called it a plebiscite? Plebiscite is a nasty word that implies in its sound something that is done against the people, probably by conniving politicians for their own career.

Referendum is so very different. For one thing we cannot agree what its plural should be. Is it referenda because it is a Latin word or is it referendums because as a nominative noun it is an English word? Enough to make one feel that we are discussing something truly profound.

Then there is Switzerland where, as we know, they have referendums (my preferred nominative plural) all the time. We should do the same. There are, as it happens, differences between the Swiss system of referendums being called by the citizens of either a canton or the whole state and the plebiscites (no other way of putting it) decided on by governments and defined by them. The Swiss system evolved over centuries and simply trying to replicate one small aspect of it (the number of referendums) is not very useful.

All this leads us to Greece where, to our immense astonishment, evidence has emerged that Prime Minister George Papandreou (and, incidentally, there is a reason why so many Greek politicians are called Papandreou) has been planning this referendum for some time, possibly because he believes in the people having a final say in something or other or, more probably, because his own position has been somewhat tenuous for some months. EUReferendum traces the history of the development, rightly calling it Not Such A Surprise.

Even the Boss can't predict the next twist in the Greek farce (they wrote those as well but they were largely obscene) and freely admits it. (Ha! Don't often hear those words.) There is the confidence vote on Friday and Papandreou might well lose it even if he screams as loudly as he can that getting rid of him now is tantamount to depriving the people of their right to have a say. The answer to that is that getting rid of him would give the people the right to vote for another government and the answer to that is .... Well, you can write that exchange yourselves.

Then there is the peculiar episode of the military top brass, who has been replaced by Papa-friendly officers. What exactly does that mean? Not enough attention is being paid to the story, in my opinion.

It comes to something when the BBC rejoices in what they call Democracy versus the eurozone. One wonders whether they will be so strongly pro-democracy in other circumstances. For instance, will they, in the name of democracy give UKIP and others of that ilk equal say?

One must admit the piece is full of silliness though the quote from the ineffable Sarko is priceless:

giving people a voice is always legitimate but the solidarity of all eurozone countries is not possible unless each one agrees to measures deemed necessary.

So much for French notions of accountable government. But then we knew that.

I am not impressed by the BBC and many others bleating about Greek love of and pride in their democracy. Modern Greek history does not support that argument (and neither does Ancient Greek history, if it comes to that). Shall we just skip that and assume that Greece is a dysfunctional Balkan state whose people had no trouble whatsoever with the EU controlling it as long as that control involved lots of money handed over in one form or another with not too many strings attached. In fact, they would continue to have no trouble with getting endless bail-outs as long as they are not expected to do something about their spendthrift and non-productive economy. As I said yesterday a nation of petulant adolescents is not a pleasant sight.

It seems likely that Papandreou, if he is still there next week (and let us not forget those military changes) will organize a referendum in which acceptance of the package will be linked to membership of the eurozone. That, one assumes, will ensure a 'yes' vote as the Greeks do not really want to come out of the euro and take full responsibility for their economic mess. Now that really would cause austerity and shortages.

Is that what Papa wants? Maybe. Much depends on when that referendum is and how the question(s) is/are phrased. And before that, much depends on Friday's parliamentary vote. In the meantime, I have no doubt, they hysterical worship of the pagan god REFERENDUM will continue. I think I shall start referring to it as plebiscite. That'll show them. Oh, and the crisis will be resumed within weeks of whatever the Greek plebiscite vote might be, assuming there is one and, assuming it is about the eurozone and the bail-out package and not about giving Prime Minister Papandreou extraordinary powers.

Look what's happened now

Really, the Greek story is becoming more and more like ... well, like Greek history. The latest twist first appeared here.

In a surprise move, on Tuesday evening the defence minister replaced the country’s top brass.

An extraordinary meeting of the Government Council of Foreign Affairs and Defence (Kysea), which comprises the prime minister and other key cabinet members, accepted Defence Minister Panos Beglitis' proposal that the following changes be made to army, navy and air force and the general staff.

It really is just the top brass, the Chiefs of the Greek National Defence Staff, of the Greek Army Staff, of the Greek Air Force and of the Greek Navy General Staff who have been replaced. What is one to make of it? If this move is pre-emptive then it does not go far enough. Any government, particularly the Greek one, that wishes to prevent a military coup needs to purge the entire officer corps down to the colonels.

Naturally, this has caused a political outcry, particularly from the Opposition. Bloomberg says that twelve other commissioned officers have been relieved of their duties. Could it be that, rather than preventing a military coup, Prime Minister George Papandreou is planning one? There is, after all, a crucial confidence vote coming up on Friday.

Playing poker with Greeks

The EUReferendum Boss and I were having an internet chat about the Greek referendum. It was not along the rather predictable eurosceptic lines of "waa-waa-waa, the Greeks are having a referendum, why can't we", because I, for one, do not think the situations are similar. For one thing, the Greeks are not having an IN/OUT referendum. The notion that any referendum is the solution to all our problems is a little hard to support.

What, I asked, would happen if the Greeks did vote against whatever the latest package might be? Would the rest of the eurozone, non-eurozone EU and the IMF then say "oh fine, you can't have any more money"? The Boss pointed out quite sensibly that the result will be whatever their PM, George Papandreou wants. Ah yes, but do we know what he wants? Does he want the package to be accepted or rejected? Which will give him a stronger hand in dealing with the rest of the colleagues?

The Boss thought that "Papa" is not a person he would like to play poker with as the man might be indulging in bluff, double-bluff or triple-bluff. In my view one should NEVER play poker with Greeks, particularly with Greek politicians though, to be fair, they do lose from time to time.

Bloomberg's latest take on the story is that

Stocks sank, while a surge in German bunds sent yields down the most on record, as Greek Prime Minister George Papandreou’s plan to hold a referendum on Europe’s bailout fueled concern the debt crisis will worsen. The Dollar Index extended its biggest two-day rally in three years.

A mixed picture and, in any case, immediate reactions to events in the stock market are not always the best guide to what will happen next. Though I doubt that a Greek referendum is seen quite in the sort apocalyptic light that certain eurosceptics prefer, there is no question that the situation, as a whole, is more than worrying and all those stocks and bonds are yo-yoing. (I am not sure whether Janet Dailey is a eurosceptic or just somebody who does not really like what is happening but I have news for her: the Greeks will have a say in their future when they start running their own economy.)

Greece’s referendum poses a threat to financial stability in the euro region and increases the risk of a “disorderly” default, Fitch Ratings said. Papandreou’s grip on power weakened before a confidence vote on Nov. 4 as six senior members of the ruling party called on the prime minister to step down, state-run Athens News Agency reported, without citing anyone.

Indeed, a number of economists and analysts (far too many to link to) have been saying for some time that an orderly default on the part of Greece would be the most sensible move, as some kind of default is bound to happen.

We have to wonder what the question will be. Will the Greeks be told very firmly that they are welcome to vote no to the latest package but that will mean, as the great Daniel Hannan have us believe:

a rejection of the bailout, obviously, which would imply an immediate default on Greece's remaining debt. This, in turn, would mean leaving the euro: with no more Brussels cash, Athens would need to devalue and print drachmas simply to meet payroll.

One can never quite predict the future in politics but I am prepared to lay odds on them not being told anything of the kind. In fact, they will, almost certainly, be told that these conditions are completely unnecessary, imposed on them by the wicked Germans whose duty it is to keep the non-productive and heavily indebted Greek economy going, and that if they vote no they will be able to get a better deal.

It seems quite likely that Prime Minister George Papandreou's (are all Greek politicians called Papandreou?) calculation is not dissimilar. It's not the threat of the referendum that is his best weapon but an actual no vote. He can then go back to the negotiating table and point out that if the colleagues want to keep the euro then they have to help him to pacify the people who have just voted against the agreement. Or, alternatively, it is possible that Prime Minister Papandreou is going to ensure a yes vote, quietly promising the voters a better deal if they behave themselves and then going back to the colleagues to point out how hard he has worked on their behalf and could they not help him by giving a bit more. Either way, it will not be the Greek people who will decide on their future and, even if the crisis is somehow postponed, it will happen at some time soon and no referendum, no riots, no screaming abuse at Chancellor Merkel will make it anything else. A whole nation stuck in petulant adolescence is not a pretty sight.

There may be other alternatives in Prime Minister Papandreou's mind but, not being a Greek politician, I cannot discern them at this stage. However, it seems to me that all these bluffs can be called by the simple expedient of accepting the referendum at its face value and telling the Greeks that they can, indeed, decide on their future though it will not be very bright. But as every parent knows, it is not enough to issue threats, you have to fulfil them.

AND ANOTHER THING: Bruno Waterfield posted around 13.55 [scroll down]:

One reason why there will not be a Greek referendum: a referendum bill must be passed by three-fifths of the Greek parliament and the government's majority has gone or as good as.

Will the whole idea be history by tomorrow as Mr Waterfield added later?