Daily Archives: 03/11/2011

His kingdom for a helicopter

Perhaps Papandreou should make sure there is a helicopter on standby, to rescue him from the presidential palace should he be forced to flee from angry protesters — as Argentine President Fernando de la Rue was in December 2001.

Advice from CNN.

When Greece joined the euro

My friend Dame reminded me yesterday of the article at the BBC website the day Greece joined the euro. The date was Monday, 1 January, 2001.

Some investors have said they are worried the decision to allow Greece to join the euro will send out the wrong signal to financial markets – suggesting that in future other, weaker economies may be allowed in without complying fully with membership conditions.

Greece has one of the highest inflation rates in Europe. Public sector borrowing is also much higher than would be permitted normally under the EU rules governing entry to the project.

Greece had hoped to join the euro with the first wave of member countries in January 1999, but failed to meet the economic tests of low inflation and government debt and deficits – the so-called Maastricht criteria.

The full article can be found here.

It has begun

Greece’s position within the euro was a historic conquest” of the country that “cannot be put in doubt” and “cannot depend on a referendum. (AP)

Evangelos Venizelos
Greek Finance Minister

It seems that Evangelos Venizelos’ big moment is … now. He has been waiting for this moment for years, since PASOK’s defeat in 2007. I remember his face on tv, speaking with his passionate manner that makes you think that he is shouting. PASOK had lost the elections, Venizelos didn’t wait at all and made statements about the need for a change of leadership in PASOK. He was speaking like a future PM and, paradoxically, he was merely the No2 of the defeated party in the elections.

The recovery of the word “mutiny” from PASOK’s history chest by George Papandreou touched the necessary sensitivities and instincts of the socialists who elected him as a chairman about a month later. It was funny times. We had a new right-wing government but the mainstream media were only talking about the internal elections of the party that lost. This is one of those small elements that can explain the term “PASOK’s deep state”.

Venizelos never recovered since then. Everybody knows that he has always been waiting for the right moment to strike back. After the resignation of Milena Apostolaki and his decision to break ranks from the Greek PM on the issue of the referendum, minutes after they both returned from Cannes last night, I think he will go for it either today or during the vote of confidence tomorrow midnight. In the second case, one cannot avoid to use the Cinderella metaphor and joke about it.

To set the record straight, the emergency Cabinet meeting that took place last Tuesday had unanimously supported the idea of the referendum. Evangelos Venizelos was there too.

The referendum could be a big fat Greek farce

I just finished watching the developments from the G20 meeting in Cannes. So, the conclusion as it was reported by Greek media is that the now famous referendum will be on whether we wish to continue using the euro or not.

I feel very disappointed and, once more, I get the impression that this whole story about the referendum was nothing more but another political machination of the government. When George Papandreou first announced the idea of a referendum, a couple of days after the Brussels’ deal, we all thought that the referendum was going to ask the citizens whether they want the new bailout package or not. In the case of a Yes, the PASOK government would be able to continue with their policies. In the case of a No, Greece would probably go totally and disorderly bankrupt and would have to return to the drachma. Inevitably analysts were, already since Monday night, talking that we would ultimately vote about our participation in the euro zone. But when they were saying this they were having in mind that the phraseology would involve whether we want the latest deal and not whether we want to stay in euro zone. However, after the meeting with Merkel and Sarkozy, Papandreou said that the referendum will be about the euro!

What’s the difference?

  1. If you ask Greeks whether they want the Brussels’ deal, they will all rush to the polling stations and say No. I’d say for sure (otherwise nobody would panick after Monday’s night announcement by Papandreou).
  2. If you ask about whether we want to keep the euro Greeks will be blackmailed for a whole month that their savings, if any are left, will be devalued again and again until Greece becomes competitive. So the simple citizens will be tempted to vote to stay in the euro zone.
  3. In the case of an outcome that dictates our exit from the euro zone, the PASOK government will need to call for elections. There will be a relative chaotic period and after going back to the drachma we’ll see all those who got rich in the past decades through doubtful methods and have already taken their millions of euros in banks out of Greece, re-importing their euro-capital after the devaluations of the drachma in order to buy out everything for nothing.
  4. Another very possible scenario is that Greeks will realize the vanity of this referendum (if the questions is about the euro and not the Brussels’ deal) and decide to abstain en masse from the polling stations. If less than 40% of the electorate votes, the result will not bind the government to act.

So we are going to have a referendum about the euro and no-one is wondering the simple question… Why now? We were not asked about it at the end of 1990s when we were heading towards the European Monetary Union. Why are we asked now about exiting? Why now?

All these thoughts made me come to the conclusion that this whole referendum story is void. It’s nothing more but a farce.

Before we see what the exact question is, Papandreou must get a vote of confidence at the Parliament this Friday. In the meantime nothing at all is officially changed. As the Merkozi couple have reiterated in Cannes “Greece should follow its obligations” (i.e. what was agreed in Brussels last week). No matter what the referendum question is.

Update: I forgot to mention one more thing. This government has been telling the Greek people before the last round of measures that we have enough cash to keep us going until mid-November. There was a narrativen that we should do everything we can to satisfy the ECB and the IMF in order to cash their cheque for the 6th installment of the previous bailout package. Othewise we were in danger (or facing the certainty) of having no money to pay the salaries & pensions. This “accept all kinds of new measures or we’ll run out of money” blackmail did its job well (as in last June and as in May 2010). The EU/IMF has now announced that they will not disengage the installment until the referendum (planned for the 4th of December) takes place. If we don’t go bankrupt by the end of November, that will mean that the government was caught lying. Again. And this is probably the only good thing that could come out of this referendum story.