Not such a surprise - by Richard... Wednesday, November 02, 2011

Not such a surprise - by Richard... Wednesday, November 02, 2011

UPDATE: On the other hand, the referendum will address the new EU plan to rescue Greece and not whether the country will remain or not in the eurozone, said a Greek government spokesman today - according to ekathimerini. You pays yer money and you takes yer choice.

UPGRADE: The theatre continues: the Financial Times says that Greece has decided on the referendum question. The people will not be asked whether they accept the bailout terms, but whether they want to remain within the EU and the eurozone. It is shaping up very much as expected, with Papandreou heading for a clear win. British referendum enthusiasts take note.

UPDATE: In the war of the constitutions, who is right? Helen has a look at what the Greek constitution actually says. Can Papandreou have his referendum or not?

UPDATE: The Guardian is just beginning to catch up with this blog, conveying a "theory" to explain Papandreou's decision to call a referendum. He is forcing the opposition's hand and hopes to gain from a "yes" vote justification and moral authority in carrying out the reforms.

As regards the procedural details, Article 44 of the Greek constitution stipulates that a referendum can be called for so-called "national issues" with the support of a simple majority of at least 151 MPs out of 300 total, or any proposed law with a supermajority of 180 MPs but with the caveat that the proposed law cannot refer to fiscal matters. Thus, Papandreou will call for a "national issues" referendum – slender though it is, with 152 out of 300, he still has a majority and can carry the day.

Greek people, says the paper, are extremely likely to vote "no". Recent polls by the To Vimanewspaper have shown that 59 percent of respondents do not agree with the deal struck on Thursday the 27th at the same time as a large majority (73 percent) want Greece to remain a part of the Eurozone.

Thus it is possible, the paper concludes, that the ruling party will link the two issues in an attempt to force the outcome. And that is exactly what you read here on Tuesday (written Monday night), and elaborated on below. The Failygraph still hasn't got it. It thinks that this is about Greece extracting itself from the euro, and is flapping around listening to The Boy, as if he had anything intelligent to say.

Although the exact timing of the Greek referendum has been a huge surprise to the international media, it was widely reported in mid-June that Papandreou was signalling an intention to hold a referendum this year. His announcement, made on 19 June at the start of a three-day parliamentary debate, was ostensibly aimed at seeking approval for "changes to the political system," including to the country's constitution.

Even then, opposition leader Antonis Samaras was calling instead for early elections, condemning Papandreou's referendum proposal as "an evasive manoeuvre masking his inability to govern". Analysts were interpreting the move as an alternative to early elections which Papandreou had repeatedly rejected.

The immediate intention then was to set up a committee to collate and work through reform proposals. Papandreou pledged the government would "immediately afterwards to go for a referendum". "In another words", he said, "in the autumn. In the autumn we will go for a referendum about the big changes needed for the country".

In fact though, that was not even the first time he had made that promise. On 25 May, George Papandreou, seeing that a consensus with the head of the main opposition party was not possible along with the very strong objections to new tough measures within (ruling socialist party) PASOK,was reported to have decided to put on the table the possibility of a referendum.

On 6 June, he held a marathon informal Cabinet meeting that ran for more than seven hours. He was reported to have told his ministers that he would "consider holding a referendum on further cutbacks essential for the loan-dependent country to continue drawing on funds from an international bailout, amid persistent anti-austerity protests".

In statements delivered during the meeting and released by his office, Papandreou said he had called on the Interior Minister, Haris Kastanidis, to set up the necessary legislative conditions that would allow such a move "when it is needed." He gave no further details.

Working to his instructions, Kastanidis on 7 October was telling parliament that there was a need "for the Greek people, at this critical moment, to take a position on the fiscal problem". Kastanidis did not specify when such a call would be made, or the exact phrasing of the question.

However, the Greek parliament was very much in the loop as – by way of a preparatory measure - it approved a bill making a referendum result binding on the government if at least 50 percent of registered voters participate on a social issue vote and 40 percent on a national issue.

Thus, by the beginning of last month, the stage had been set for the current drama. It came as a surprise simply because we were not listening. And, despite the huffing and puffing, Papandreoutoday won the backing of his cabinet for the referendum move, as he knew he would.

Furthermore, this veteran politician is confident he will succeed when it comes to the vote. "The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro," he told his ministers. "No one will be able to doubt Greece's course within the euro".

Thus, what we are seeing is a long-calculated ploy to head off opposition calls for a general election. Papandreou is making an appeal direct to the people in the expectation that, despite the intense unpopularity of the bailout conditions, they will hold on to nanny for fear of something worse.

Those who are parading this as an exercise in democracy might need to think again. Reminiscent of the use of plebiscites in the Germany of the 1930s, this is old-fashioned survival politics, with a skilled manipulator using a referendum to avoid certain defeat in the polls. He is circumventing rather than supporting the democratic process.

Merkel may not entirely approve, but she will understand the strategy ... and go along with the theatre. We will see highly publicised but meaningless "concessions" made in Cannes today. Papandreou will bring forward the referendum to December and, responding to a rigged question, the Greeks will vote to stay in the euro.

Armageddon will have been delayed until after Christmas. It will come ... but not just yet.

COMMENT THREAD

Share

Print ready

Descent into the abyss - by Richard...

"It is simply impossible to overstate the seriousness of the crisis unfolding in Greece", says the Mailleader. "Only days after Europe’s leaders were triumphantly (and, as this paper pointed out, naively) proclaiming they'd solved all their problems, their rescue package for the euro lies in shambles".

It then goes on to warn us that an EU financial meltdown – made more likely by the Greek action - would have unthinkable repercussions for Britain's recovery. Indeed, we are told, it may be no exaggeration to say we could witness unemployment and civil unrest throughout Europe on a scale not seen since the 1930s.

Now, like euroscepticism, warning about civil unrest has become fashionable. A similar message comes from the International Labour Organisation, via The Guardian and, all of a sudden, it is not just lil 'ol EU Referendum warning about the descent into the abyss. Yet, way back, not a few were prepared to deride us for our persistent warnings.

We were never first, nor the only ones to offer warnings. But we have been in the vanguard, with this particularly explicit warning in September last year. And in April 2009, I was writing, Caedite eos! Novit enim Dominus qui sunt eius. We are closer than ever to that happening, and now – too late – this is being recognised.

If people then had listened to the many voices, it could have been stopped. But that was not to be. Now we pay the price.

COMMENT: "JOKER" THREAD

Share

Print ready

Grrrr – eeeeek - by Richard... Tuesday, November 01, 2011

UPDATE: In a surprise move, the defence minister has proposed the complete replacement of the country's military chiefs of staff - the chief of the Greek National Defence General Staff and all the service chiefs (pictured below). It is understood that the personnel changes took many members of the government and of the armed forces by surprise. What did we say at the end of this piece? Was this to pre-empt a military coup?

UPDATE: "This was completely unanticipated ... It is not needed and it is just sort of an internal political thing," said John Canally investment strategist and economist for LPL Financial in Boston. "This vote in Greece is going to hang over the market for next week or so, unfortunately".

UPDATE: Stocks are falling even harder now on talk that the Greek government may be on the verge of collapse, says the WSJ Clog.

All 10 groups in the S&P 500 fell as financial and commodity shares had the biggest declines, saysBloomberg Morgan Stanley and Citigroup Inc. retreated more than 7.2 percent as a gauge of European lenders tumbled 6.7 percent. Alcoa Inc., Boeing Co. and Cisco Systems Inc. decreased at least 3.4 percent, pacing losses among companies most-dependent on economic growth. Baker Hughes Inc. sank 8.6 percent as earnings missed analysts’ estimates.

The S&P 500 fell 2.6 percent to 1,221.35 as of 12:15 p.m. New York time. The benchmark gauge for U.S. equities slumped 2.5 percent yesterday. The Dow Jones Industrial Average declined 277.68 points, or 2.3 percent, to 11,677.33 today.

"I just don’t get it", says Michael Mullaney, who helps manage $9.5 billion at Fiduciary Trust in Boston. "A Greek referendum is a very risky proposition. Everybody thought last week that this crisis was behind us on a near-term basis, but Europe is going to be front and center".

UPDATE: Caught unawares by his high-risk gamble, says The Irish Times, Merkel and Sarkozy have summoned Papandreou to crisis talks in Cannes tomorrow. They will push for a quick implementation of the bailout deal ahead of the G20 summit. And the Athens Stock Exchange has suffered its biggest daily drop since October 2008, with the general index shedding 7.7 percent.

The lines are 'umming, the Progressive Contrarian is being, er … contrarian, Helen warns that you should never play poker with Greeks, Ambrose is being Armageddon-ish and Bruno is saying that there has to be a three-fifths majority for a referendum, so it ain't going to happen. Mary Ellen Synon ruminates about Greece being chucked out of the euro, and says that can't happen either.

The Daily Wail has taken tits and bums off its lead long enough to tell us that the markets are in freefall, and that MF Global has gone bankrupt. Merkel is said to be stunned and Sarkozy "dismayed". From over the Atlantic, the New York Times is talking of the Greek government being plunged into chaos, with the prospect of a collapse that would not only render the referendum plan moot but likely scuttle — or at least delay — the bailout.

Everything is on hold now, waiting for the great Merkel to speak. But I've already written her speech. It's the title of this piece.

COMMENT: "JOKER" THREAD

12Share

Print ready

Happiness, happiness - by Richard...

It struck me the other day that, with great events afoot, how irrelevant our own political establishment has become. Then, as if to confirm this, up pops the moronic Boy. His particular piece of fatuity this time is having the ONS spend £2 million over the course of a year working out what questions to ask for his happiness survey.

What Dave clearly does not seem to appreciate, though, is that the happiness of a growing number of people would be best secured by an announcement of his own departure from politics.