Risky: PM Papandreou said a referendum on EU aid package will be held in Greece

Reuters: Nearly 60 percent of Greeks view the EU summit agreement on the new bailout package as negative or probably negative.

Questions:

1. What kind of motivation was behind this move in your opinion? I doesn’t seems very vise and the EU will not celebrate it or…?

2. Any chance the package will pass?

Answers:

Roman Gerodimos, Senior Lecturer in Global Current Affairs, The Media School, Bournemouth University

1. Greek society has been in uncharted territory, especially following last Friday’s protests throughout the country which for the first time in history disturbed the national holiday celebrations. Society is deeply polarised between populists, who are rejecting the political establishment (and along with it the institutions of representative democracy), and the proponents of reform who think that Greece should engage in radical and painful reforms in order to safeguard its future within the Eurozone. PM Papandreou has been under immense pressure to regain the political initiative and win back popular support for his government’s actions. Many think that, even if the new EU aid package were to secure the support of Parliament, it would still be impossible to actually implement it given the paralysing influence of opposition forces throughout the public sector and generally due to the broader social malaise.

Hence, what the PM is trying to do through this referendum is (a) de-pressurise society by giving voters – who have been feeling trapped and frustrated – a way to express their opinion and, perhaps more importantly, to (b) shift some responsibility for the acceptance and implementation of the reforms / aid package onto the opposition and the public at large – if the Greek people accept the package then this will obviously give the government some of its lost legitimacy and support and it will silence the populists and the critics; if the people reject the aid package then it’s quite clear that there’ll be a general election.

Many government MPs have made it clear that they will not vote again in favour of unpopular measures as they feel that the governing PASOK party has, unfairly, carried the political cost of all major decisions so far – so they are keen to share that responsibility with either other parties or the electorate at large. In fact many within the government would prefer to lose a referendum and an election than having to go on making decisions against the current (or indeed torrent) of public opinion.

2. Knowing how polarised the Greek society and in particular the public sphere and the media can get during times like these, this is an extremely high risk move. A lot will depend on how the debate is framed (in fact the details of the aid package haven’t even been finalised yet) and who manages to “sell” their frame more effectively. Quite obviously most opposition parties will encourage people to reject the package because they are looking forward to a general election. Having said that, this referendum may mobilise and re-awaken the dynamic and reform-oriented sections of Greek society, which are not negligible. It’s far too early for a prediction but at this moment in time – but being aware of Mr Papandreou’s and his government’s weakness in communicating their message effectively and building up a broad coalition of supporters – I think it will be hard to get a “yes”. A negative result would almost certainly lead to a default and, ultimately, maybe even withdrawal from the Euro, so a lot is at stake. Even a narrow positive outcome would not be terribly helpful as it would only highlight the division in society and would probably encourage those who oppose all and any reforms. Therefore, only a resounding victory for the “yes” camp would produce a way out of the crisis.

Alexander Kazamias, Senior Lecturer in Politics, Coventry University

1. Although I consider Mr Papandreou’s decision to be opportunistic, I think that in his present desperate position, what he has done might actually be the only option left for him short of resigning as prime minister. According to the most reliable opinion polls, his party is trailing behind the opposition New Democracy by 9 points, down to 22 percent from 44 percent it received in the last general election in 2009 and his majority in Parliament is reduced from 10 to 4 seats due to defections. As a result, the other options available to him, that is a) to invite other parties to form a coalition with his own PASOK – which he tried unsuccessfully last June, b) to go to the polls to receive a fresh mandate, and c) to carry on as usual, are more costly for him than the referendum. His position in the polls is so weak that if he were to call an election he would lose badly and if he were to invite other parties to join his government they will now reject the offer for fear of seeing their own popularity also plumet like his. Carrying on as usual, is also not an option because the level of popular anger against his government is so wide, that he could simply not muster the political authority to implement the new measures required under the latest deal agreed with the EU on 26 October.

Consequently, the motives behind his surprise decision to call for a referendum are several. First, this process will enable him to stay in government for a few more months and check or marginally reverse the slide of PASOK’s popularity to more manageable levels, depending on the result of the referendum. I personally doubt if this will work, but it is probably his best bet in a politically hopeless situation. Second, as it appears from the first statements of some of his ministers, their assessment is that this could turn out to be a win-win tactic. If the referendum produces a ‘yes’ vote, then Papandreou will claim victory at home and gather a new legitimacy to continue his austerity and privatisations programme until the end of his term in 2013; if the result is ‘no’, then he could go back to the EU and ask to renegotiate the deal of 26 October, asking to trim the Greek debt further than 50 percent. This will increase his popularity in Greece and force the banks and the EU to take a greater share of the burden. Again, I am not sure this scenario will succeed, because one can anticipate an outcome whereby the referendum produces a ‘no’ vote and the EU refusing to revise the 26 October agreement thus leading to a double embarrassment for Papandreou. There is also a third motive behind the Greek prime minister’s surprise announcement yesterday. Deep down, Papandreou probably thinks that what he has been doing since 2009 is broadly in the interest of most Greeks, but because the opposition parties and the press are not taking a responsible attitude, his popularity has suffered. As a result, the referendum is also for him a means of forcing the electorate to think more responsibly about whether it prefers to stay in the EU and the Euro and bear the necessary cost in terms of high unemployment, low wages and heavy taxes or leave the EU, go back to the drachma and suffer all the consequences of this choice – an unmanaged default, to start with. In this way, the referendum is also a mechanism of politically blackmailing Greek society into accepting PASOK’s unjust economic policies as the only alternative to an even greater national disaster.

Of course the EU would be extremely nervous about these developments, since the referendum will not take place, it seems, before early January. During that time, a period of great uncertainty and market volatility will certainly prevail. At the same time, however, it is time the EU understood that the Greek Debt Crisis cannot be treated always as an economic matter when it concerns the Greeks and as a political matter when it concerns the Germans, the French and certain Eurosceptical governments. There has been strong opposition in Greece against the terrible mismanagement of the debt crisis by both Papandreou and the EU over the last two years and this has created a serious political deadlock which now has to be dealt with. This is the root cause of Papandreou’s desperate move to call this referendum and, whether it likes it or not, the EU must try at least to understand this.

2. If we are to believe the opinion polls, the package will most probably get a ‘no’ vote. However, considering that the consequences are going to be very serious, many Greeks, especially former PASOK and some New Democracy supporters, will certainly find it difficult to vote in a way that could risk damaging Greece’s future in the EU and, with it, the prospects of the Euro as a whole. There is, of course, a sea of difference between expressing an opinion freely in a popular survey and being forced to make a binding decision about the future of your country in a historic referendum. This is exactly what Papandreou is banking on and my assessment is that the outcome will be too close to call at this early stage. Unfortunately, however, nothing positive will ultimately determine the result. In the end, it will be settled around a conflict between the anger of the Greeks on the one hand and their deepest fears on the other. Both feelings are so strong and widely shared, that it is hard to predict which of the two will finally prevail.

Update:

In the last few hours reports came out suggesting that former PASOK deputy ministers, Milena Apostolaki and Nicos Bistis have left the government benches, thus reducing Papandreou’s majority to 2 (152 of 300).  Meanwhile, six members of PASOK’s National Council, all close to the former PASOK prime minister Costas Simitis (1996-2004) have called on Papandreou ‘to resign’ in a letter to the press.  Another veteran politician, Vasso Papandreou (no relation of the prime minister) has also called for an immediate election and a national salvation government (pressumably she means a grand coalition).  If this continues – and it most probably will – then what I wrote to you early this morning will have lost much of its relevance as it now seems most likely that Papandreou will be out of power by Friday.  In his surprise announcement yesterday he also asked for a new vote of confidence in parliament, a procedure requiring a 3-day debate in parliament, scheduled between Wednesday and Friday.  With these dramatic reactions inside PASOK, it is doubtful that he will survive that Friday vote.  This means that the referendum will now probably never take place and instead we shall see a Greek election before Christmas.

Dionyssis Dimitrakopoulos, Department of Politics, Birkbeck College, University of London

1. As a populist, Mr Papandreou is simply trying to attach himself and his divided and unpopular government to a cause (Greece membership of the Eurozone) which he knows that the vast majority of Greeks treasure. By doing so, he is trying to survive in power despite the widely-acknowledged inability of both himself and his government to (a) introduce meaningful reforms that the country needs and (b) credibly show to the Troika that the ‘medicine’ is not working and then offer a credible alternative.

2. It cleared the first hurdle (cabinet) last night in a way which makes me think that the ruling party’s mps who rebelled on monday might end up towing the party line after all. (largely because they are linked to some of the party’s ‘barons’ who sit in the cabinet and last night acquiesced to Papandreou’s decision). We will only be sure on Friday evening.

 

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