The Greek referendum call is, while it lasts, effectively a plebiscite on euro membership.
I say “while it lasts” because the opposition is mobilising a parliamentary manoeuvre to bring down the government, which may succeed – returning Europe to its status quo of containable trauma.
If Greeks reject the 50% controlled default on debts they owe to the banking sector, then the arithmetic I revealed on Newsnight on the eve of the Euro summit comes into play – without a 50% haircut, and a further 130bn euro bailout, on top of 110bn, Greek debt spirals out of control and the country goes bust.
By Paul Mason, Economics Editor, Newsnight, BBC.
The rest of his article can be found here.
Greek Prime Minister George Papandreou announced minutes ago that he will proceed to a referendum on the new bailout plan that was agreed in the recent EU Summit Meeting. He will before ask for a vote of confidence, probably tomorrow, from the Greek Parliament. His decision aims to stop the internal PASOK resentment.
To understand the seriousness of the move, one needs only to reckon what will happen if the outcome of the referendum is negative.
A negative vote (i.e. a rejection of the current bail out plan) will certainly mean that we will have General elections to chose a new government with a new plan.
It is the second referendum taking place in Greece since 1974 when Greeks were called to approve or disapprove the Greek Monarchy.
George Papandreou also suggested a reform of the Greek Constitution and asked that, in the next General election, the political parties should commit to a common program of reforms. This will probably look like the Portuguese elections in June 2011 where the socialists and the righ-wing parties competed on who is the best to implement the same package of EU dictated measures.