Thursday, November 3, 2011

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.


  1. It really is difficult to keep up. Does anybody really know how this farce will end?

  2. Not really though I am prepared to bet that Greece will default and be out of the euro reasonably soon though maybe not till next year.