Thursday, 3 November 2011

Franco-German ultimatum spells end for Papandreou

Extraordinary the spectacle last night of Sarkozy and Merkel dictating to Greece the actual question they expected to be asked in Papandreou’s proposed referendum, i.e. Greeks should be asked to judge whether they should or should not remain within the eurozone. Sarkozy went one step further in humiliating Greece by castigating the country’s political system for failing to produce consensus and solidarity – EU trademarks – and compared this unfavourably to what had happened in Ireland, Portugal and Spain, where similarly difficult austerity measures have had to be implemented.

Now, when Papandreou came up with the idea of a referendum – without consulting his cabinet, let alone Greece's EU ‘partners’ – he must have thought that the question would relate to the latest bailout deal agreed on 26 October, providing Greece with a 50% debt haircut; but the French and Germans made it clear to him that such a question would effectively be translated as a referendum on in or out of the euro. But, in Greece, apart from the extreme left and extreme right, there is absolutely no desire to leave the euro – in fact, Greeks are ardent supporters of the euro and of the European project in general – so a referendum on returning to the drachma would be not only a pointless distraction but also put into question the entire strategic basis on which Greece has operated since 1974, and no Greek parliament is going to approve legislation for such a poll. Indeed, reaction among Pasok MPs and cabinet ministers this morning has been horror – at the humiliation heaped on Greece by the Franco-German ultimatum – and revulsion – at Papandreou’s disastrous miscalculation and ill-thought out plan for a referendum – and it is only a matter of time before Papandreou resigns

33 comments:

Achilles said...

Greece blinked first. But at least this terrible government and this stupid leader are finished. Catharsis.

John Akritas said...

I'm not convinced that the Europeans would have asked Greece to leave the eurozone – the consequences would have been massive for them as much as for Greece – but clearly Papandreou hadn't thought through what he was going to ask in a referendum and when it was suggested that he was actually going to put a question not on the bailout but on the euro itself, then he was doomed. He humiliated himself and Greece, and this is not survivable.

lastgreek said...

Is it possible for Greece to function without the country spending more than it takes it, that is, living within its means?

That is Greece's problem: fiscal deficits, which over time -- this is where the exponential function comes into play -- result in unmanageable debt ... like the present.

Btw, Hermes brought this up a few days ago -- Why did the G-Pap fire some of his top military brass?

Anonymous said...

Remember what happened in 1922, after Greece went ahead with a referendum on the return of the king in the face of opposition from the Europeans.

Makis said...

So, it's if you dare hold a referendum and then we don't like the outcome we're going to withhold the money, you can go bankrupt and then you're on your own. Is this European 'solidarity' and 'consensus', or does solidarity and consensus not apply when it comes to Greeks. These same people have been trying to destroy us for a 1,000 years. Even the Icelanders got a referendum and though the creditors didn't like the outcome, they had to deal with the Icelanders as equals.

John Akritas said...

My understanding, LG, is that the problem isn't the debt itself, but paying off the interest. Even with the debt at 120% of GDP– incredibly high – Greece could service it if – and here's the rub – if the Greek economy could attain sufficient growth. But how does a moribund, Soviet-mafia economy like Greece achieve sufficiently high growth without massive, massive reforms and without dismantling the Pasok deep state?

Anonymous said...

I thought he did it precisely for that reason: i.e. that the referendum was in essence going to be/turn into a vote over Greece's membership in the EU, and that is what he was banking on to get the yes vote.

John Akritas said...

But he didn't need a referendum – and all that entails – to find out that Greeks want to be in the EU and don't want a return to the drachma. It's all self-evident. It's like having a referendum on whether Greeks want to abolish Easter.

lastgreek said...

My understanding, LG, is that the problem isn't the debt itself, but paying off the interest.

Yes, and that interest is on that massive debt. More on that in a second ...

I mentioned before about the ability of Greece to live withing its means -- not spending more than they take in. I have also mentioned about the lack of leadership in Greece. What if Greece did not have to pay the interest? If Greece does not agree to their austerity plans, and now it's threatened with no more aid ... fine -- we default. And ...

We still get to keep the euro since that is what most Greeks want.

In other words, no more foreign debt, no more dreaded interest. (Hey, it's now possible for Greece to spend less than it takes in once you remover the dreaded interest to foreigners!)

... and Greece keeps the euro!

Really, can they -- Germans et al --kick Greece out of the euro? Where is it written that they can? Seriously, on what legal grounds? Other than a voluntary withdrawal they can't -- unless we are talking by force of arms which we know that ain't going to happen.

Think about it for a second and promise not to laugh even though i can barely contain my laughter at Merkel, Sarkozy, and their bankers :-)

But we need leadership in Greece. You know, when the G-Pap was summoned to Cannes he should have simply replied, "Sorry, Angela. Sorry, Nicolas. No can do. I am taking the wife and kids to the Greek countryside for some relax time. Don't call me, I'll call you."

Think about it. There are threatening Greece. No different than the Turks if you ask me. We got nothing to lose, we've about to lose everything in the present course we are taking. Let's fight back.

Anonymous said...

But what I meant was: he would call the referendum over the 26 October package, and then transform it into an issue over Greek EU membership(which it is anyway, surely?) – knowingly – to secure "victory". At least this is what I gathered from everything…

Anonymous said...

The victory being the "democratic acceptance" of the new packages and everything positive, one would hope, that would entail etc.

… okay, I think I'm sleep talking now. I'm off to bed.

John Akritas said...

I see what you mean, Anon; and I think you are right; he was going to ask for approval of the 26 October deal in such a way as to make it a referendum on the euro and EU membership and know he'll win this way. Problem with his strategy seems to be that the Europeans, his own MPs and the opposition knew what he was up to and putting into question – even if theoretically – Greece's EU membership is unthinkable for most Greeks.

I agree with a lot of what you, say, LG; not so much on the default – principally, because the consequences for Greeks would be too much to bear and I don't think, in the chaos that would follow, Greeks would be in a position to make the reforms they need to make one way or another – but it's totally correct, I believe, to suggest that Greece is not going to be kicked out of the euro; that there exists no mechanism to do so, other than the Germans sending in the tanks and forcibly taking euros off the Greeks. They're stuck with us – and we should use this to our advantage as much as possible. Clearly, Papandreou's not the man to do this.

lastgreek said...

Yes, they are stuck with us. A match made in heaven if you will ;-)

But they need to be reminded of the concept of MAD -- Mutually Assured Destruction. Because if we go KABOOM ... they, too, go KABOOM.

Makis said...

They can't throw Greece out of the euro. All they can do is not give Greece more money and prompt bankruptcy and disorderly default. But, first, that money is going to pay off the debt, which the Greeks are also being asked to do through cuts in salaries, pensions and services; and, second, stop giving Greece money means stop propping up the French banks holding Greek debt. I say, let the French have their salaries and pensions slashed to save their banks.

Hermes said...

Papandreou called the referendum to lay a portion of the blame on the Greek people and the silence the opposition. Of course, the referendum would have been on the euro and not the October 27 deal which meant that it would have been a “yes”. Then Papandreou would have felt secure that he has a mandate for reforms. The whole idiotic enterprise was cooked up amongst his close circle of foreign based advisors without consulting his cabinet. Even Venizelos did not know about it. Papandreou must go. He is an utterly foolish and destructive individual. One consolation we may finally get rid of the Papandreou cancer (with the exception of his grandfather) on Hellenism.

Apparently, the budget is forecast to return to a primary surplus next year due to the austerity measures. Therefore, if all debt was cancelled they would be able to operate. However, if all the debt was cancelled, and if they do not get a recapitalization from somewhere, the Greek banking sector would be insolvent. Where would they get a recap? Perhaps not the Europeans as they had just defaulted. Therefore, Greek deposits would probably be swapped for shares in Greek banks. How would Greek depositors feel knowing their life savings are now shares in Piraeus Bank? I suspect they would be very unhappy. This is just one dimension of a default not to mention the skyrocketing inflation, as Greece is a large importer, will impact all Greeks rich and poor. Therefore, it is a deeply problematic issue.

John Akritas said...

Of course, H. the referendum now appears a stunning piece of idiocy and Papandreou's attempt to justify it in front his MPs was desperate – he said it was all a well-thought out shock tactic. Inevitably, one has to consider his actions, his almost tragic efforts to cling to power, as connected to a psychological need to prove himself to his father. A pity for Greece, and for Pasok MPs that they don't have the courage to put him out of his misery – they might not even do it tomorrow night.

Hermes said...

This is actually an interesting article (in English):

http://www.rieas.gr/component/content/article/29-first-page/1624-greece-papandreou-and-the-referendum-q-a-a.html

Hermes said...

Perhaps rather than just focusing on the immediate events in this crisis, we should sometimes stand back and think about the long term events, the longue duree as the Annalists would say, from a civilisational perspective. The Franks are once again dictating to the Greeks, Hellenes, Romaioi. Ever since the savage blow of 1204, the Franks (and sometimes the Latins), coupled with the later incursions of the Turks, British and Americans, have had the Greeks on the defensive. We may think that certain triumphs were great i.e. 1821-1833, 1912-13, 1940, 1955-57 and they were great in a short window of time; however, they are simply blips in the continuing domination of larger forces on the Hellenic world. The latest episodes in Cannes should not be surprising given we have joined their Empire. What did we expect? You join the Frankish EU empire (admittedly this is an empire of a different sort) and you have to play by their rules. Of course, joining the EU made sense, we are small, economically insignificant with poor institutions. However, when viewed from a long term civilisational perspective, and if we retained some equality in resources, voluntarily joining their empire would make no sense at all. There is nothing inherently right about their Empire, there is no End of History, but we are only made to feel it is the End of History because the current correlation of power relations bludgeons us to think this way. Panagiotis Kondylis said something like this:

“Ancient historians relate that after the destruction of Carthage, Scipio Africanus the Younger cried when he saw the end of his enemies because he remembered the Homeric verse “The day will come when holy Troy will be destroyed”, and he contemplated that the same fate could befall upon Rome. Much smaller intellects and much smaller souls [Sarkozy, Merkel, Papandreou] do exactly the opposite. Once their own political and ideological faction decisively triumphs, they rush to proclaim the end of History so that nothing can ever negate that victory. Or they do something practically equivalent: they paint an historical future such that, as it ought to be formed, the way in which the victor likes to understand himself and his activity in reality coincides with the objectively given course of History. What is really interesting is that the supporters of the temporarily victorious capitalist liberalism start from about the same philosophy of history as the erstwhile Marxists: they talk as if history is traversing, albeit with temporary divergences, a lineal trajectory, at the end of which a united and peaceful world will be found. Moreover, just like the Marxists, they believe that the economic factors, i.e. the development of the productive forces and the interweaving of economies constitute the motive forces of historical progress, which will substitute war with trade (which is something that was first postulated more than two centuries ago – and we all know what has happened since then!). Just like the Marxists have experienced the shipwreck of their Utopia, so too the liberals will find themselves soon amongst the ruins of their Utopia, which the ferocious contests of distribution of the 21st century will bring crushing down. Whoever contends that History has ended might as well be certain that History awaits them around the next corner.”

Of course, Kondylis is talking about the clash of Marxism and liberalism and other modern ideologies. However, his thoughts are equally applicable to the Frankish monstrosity of the EU and the Hellenic world. Like the Marxists and liberals, the Franks might think that the EU represents the End of History, the “Hegelian Prussian State”, and our decrepit governing elites might also think so; however, “larger intellects and larger souls” should not accept that the EU will rule forever and that Hellas and all of its cultural and civilisational offshoots, will always lie prostrate.

Maybe I am rambling....

John Akritas said...

RIEAS certainly paints a very black picture of the Greek situation. No reason to doubt the veracity of what is said; the question I have is whether this disaster was provoked by troika strictures or whether it was troika strictures mediated by Greek reality, and that a different Greek government would have ameliorated the pain. Things seem much worse in Greece than in Ireland and Portugal.

The long view is the correct view; though I'm not convinced of it's the 'Franks and Latins' again theory. Greece's eternal enemy comes from the east. In this video http://vimeo.com/31417906 Russian marines parade in Alexandroupolis for Ochi Day. They got a very warm welcome. I doubt Russian marines would get such a welcome in many places in the world, and I doubt that Greeks would give such a welcome to soldiers from many other countries, and certainly not from our European 'partners', certainly not German, French or UK marines.

Anonymous said...

The Russians' arrival is linked to the inauguration of a Monument in memory of those Russians lost during the Russo – Turkish war of 1877 – 1878.

Anyway, the 'Franks and Latins' theory is a convincing one.BTW, who are the ones who are helping the Turks build sophisticated satellites right now? And who owns a vessel which is used for research in our EEZ by the Turks? Etc etc etc.

Greeks do not really belong in the EUSSR; they belong to some sort of Byzantine Commonwealth bloc, with the people they share common interests with, have close cultural bonds with, etc.

Anonymous said...

BTW, who are the ones who are helping the Turks build sophisticated satellites right now?

Hmmm ... that would be our "friend" Israel.

In the first three months of this year, Turkey imported roughly $400 million worth of goods from Israel. These "goods," btw, were not matza balls. We are talking high-tech military equipment ... including satellites.

Oh, and here is another bit of ironic but related trivia. Who dresses the Israeli terrorist occupation military (uniforms and boots, boys)? Why none other than the Turkish terrorist occupation state.

Life's little ironies, eh?

lastgreek said...

Sorry -- I forgot to write my username in the above post.

John Akritas said...

I think the 'Franks and Latin' theory, expressed here – http://ardin-rixi.gr/2011/10/08/μετά-τον-φράγκο-ο-τούρκος// – by Giorgos Karembelias (in Greek) is flawed. It's all very well saying history repeats itself – which it may or may not do – but to say it does for the same reason – in this case, the desire of the Franks and Latins to destroy Hellenism – doesn't wash with me. It's a bit like the Muslims who think the West is out to destroy Islam, when clearly the West has been content to do business with and sustain Islam for centuries, e.g. the Ottoman Empire. Besides which, it's complicated by the fact that the West – now, not in 1204 – is a offshoot of Hellenic culture and the logic of casting the West as Greece's enemy is to establish some sort of Pan-Orthodox alliance with Russia, Serbia and so on – which is sentimentality if it's not based on national interests. And do we really have to go down a road that stresses our religion?

Final point: the West has been a Greek enemy not because it hates Hellenism; but because Greece has been perennially weak.

lastgreek said...

the West has been a Greek enemy not because it hates Hellenism; but because Greece has been perennially weak.

I agree, J. When you are weak, you get pushed around

But I would also to add that it's not personal, it's just business :-)

Do you guys recall that the very next day, if not the same day, after the announcement of the death of Gaddafi, one of the British ministers declared that British businessmen should be heading for Libya?

Anonymous said...

How would creating such a bloc not be in our national interests?

You think by keeping Greece as a German fief, weak and in a straitjacket, it would somehow be better than the alternative? The alternative sees the Greeks rise.

Oh it's "sentimentality" now? Last time I checked,it was the Russians who were busy fighting wars against the Turks when we were their slaves – while the West was doing what, exactly? It was the Russians who the Greeks had their hopes pinned on precisely because of their religion; and they came through for us on a number of occasions.When we joined forces with the others, we got results (Balkan wars)etc etc etc. Now please tell me why we shouldn't go down this avenue when it has been proven time and time again that the West, on the other hand, have betrayed/worked against us on numerous occasions– at every chance actually.

So let's not form alliances with those we have a common history with, similar goals with (i.e. stop Turkey getting stronger), similar religion(Orthodox are "other" in Western eyes: they don't care for those ones), but let's fall into the lap of those, as history has proven –and they continually prove – are always Willing to cause some kind of catastrophe for us.

(Apologies: extremely rushed)

John Akritas said...

I'm in favour of any alliance that serves Greek national interests – including ones that are with Jewish, Muslim or Buddhist states. It's just coincidental that we share national interests with Russia, Serbia and so on and have the same religion – which serves as useful ideological camouflage. But this shared religion has not been any good when we were fighting Bulgarians and Orthodoxy meant nothing when the British were backing us as the emerging power in the Eastern Med. in 1919. That, as LG, says, was business. And what proof is there that the Russians are motivated by Pan-Orthodoxy? Total myth. Pan-Slavism, yes; but never Pan-Orthodoxy. Remember in the break up of the Ottoman empire, the Russians were our rivals, particularly when it came to the future of Constantinople – Tsargrad to the Russians – who wanted it for themselves.

John Akritas said...

Hermes once made a very good comment, quoting Kondylis, along the lines of how if there were 70m Serbs on our doorstep and 7m million Turks, it would be the Serbs who would be our enemies and the Turks our allies.

Anonymous said...

But be serious now, how is a "Jewish, Muslim or Buddhist" long-term alliance a) feasible and B) likely to hold more weight than previously stated alliances.

Coincidence? I'm not sure you mean (please explain). Anyway, I wasn't just referring to a religious aspect when I mentioned the "Byzantine Commonwealth".

And think just how much our interests with the Bulgarian converge. In 1919? What, after the revolution? Anyway, regardless of what respective heads of states decided, the people were always on each other's sides – and still are to a certain extent.can the same be said about the West?

Never Pan-Orthodoxy? Good Lord! wait a second, are we talking about right now, or throughout their history?

As for the last thing, it's so ridiculously stupid and makes no sense, that I won't bother to address it.

John Akritas said...

It's a pity that you can't see the point, which is that Turkey poses a threat to us not because it is Muslim and the Serbs are our allies – of sorts – not because they are Orthodox, but because our national interests happen to coincide or not. 70m Serbs pressing for access to the Mediterranean and basing this claim on the empire of Stefan Dusan would be a threat to us, Orthodoxy or no Orthodoxy.

And are you sure about the Bulgarians and Greeks always being on each other's side? Perhaps you should research Greco-Bulgarian relations a little more, going back to Basil II's destruction of the Bulgarian empire and how this event, down the ages, has revealed itself in Greek and Bulgarian national identities. I don't think you'll find many Bulgarians who remember Byzantine domination with much fondness. Though, of course, you don't need to go back to the 10th century to know that Greek and Bulgarian clashes in the nation-building process were as ferocious as anything experienced between Greeks and Turks.

And the Russians have only ever used Pan-Orthodoxy as a means to assert Russian national interests. Besides which, like I said, throughout their history, Pan-Slavism – again a device to assert Russian national interests – has always been more appealing to the Russians than Pan-Orthodoxy. Pan-Orthodoxy, Byzantine Commonwealths – these are fantasies, psychological crutches disguising Greek inadequacy, a form of Greek nationalist childishness. The Russians are our Orthodox brothers – what a load of nonsense!

John Akritas said...

And the point about the British in 1919 is that Greece and the UK were allies in advancing the Greece of the Two Continents and Five Seas because their national interests coincided – religion and so on played no part in it. Building alliances based on religion is for clerical fanatics, not serious strategists. I understand that Greeks feel alone – and want to feel part of something bigger and more powerful than Greece – but we shouldn't let our loneliness turn us into idiots.

Hermes said...

I agree with John and of course, Panagiotis Kondylis. However, there is no reason we should not use Orthodoxy as an instrument, and as an instrument only, to mobilise support to our national interests. Just as the same we should use ancient Greece. Remember, there are millions of Greek Orthodox throughout the Middle East and Africa which look to Greece and Constantinople for some sort of spiritual and cultural direction. If Greece became an overtly secular state it would largely lose the leverage we have.

I do not advocate an alliance with Russia because we are Orthodox, that is romantic nonesense, but there are two strategic advantages that come to mind; 1) Russia requires warm water ports and access. Greece has this and also has a large fleet, 2) Russia will never accept Turkey has a friend because they are rivals in the Black Sea, partially control the Dardenelles and has millions of Turkic citizens in vulnerable but rich regions who sometimes seek inspiritation from Turkey.

Anonymous said...

I'm still looking to reply in detail, John – I just haven't found the time.In the meantime, I thought this would be a good addition to the discussion:

http://www.defencegreece.com/index.php/2011/11/putin-says-mother-of-gods-holy-belt-improves-greek-russian-bilateral-relations/

;)

John Akritas said...

I agree: Greece should base its foreign policy on a miracle working belt.