This is confusing. You mean to say that the prime minister of Greece gambled with global markets and the euro in order to score domestic political points?

Yes. Although he won’t admit it of course, Papandreou apparently felt that a sudden “democracy” injection could reverse his collapsing personal political fortunes and re-confirm him as the master of the Greek political game. His unsuccessful efforts, and the chaos they engendered worldwide, triggered reports like this one in the European press.

What was the impact of the referendum gambit on Greece’s relations with Europe?

It was catastrophic, to say the least. Overnight, Greece’s “partners,” led by Germany and France, re-discovered that Athens had cooked the figures repeatedly and that Greece’s participation in the Eurozone was the result of poorly staged “diplomacy” on the part of those who wanted to see this southern European corner join the club for “political reasons.” Thus, the question of Greece leaving the common currency, and even the European “union” itself, immediately came to the fore, with both Chancellor Merkel and President Sarkozy declaring in public that Greece is now faced with the decision of whether it wishes to stay in the euro or not. Greece is no foreigner to existential crises buffeting its presence as an “equal partner” in Brussels, but never before did she experience such an open challenge to her membership in the “union” signed and sealed in 1979. In the days after the plebiscite brouhaha, talk of Greece’s ejection intensified beyond anything we’ve seen in the past -- and there are even reports claiming that banks across Europe are preparing contingency planning for “…what until now seemed only remotely possible: the withdrawal of Greece from the euro currency.”

Giving up on the referendum idea has not apparently resolved anything while causing much damage; so, what is to be done with domestic political confusion that continues to reign supreme?

The referendum was just the latest blackmail shot by Papandreou, who has utilized similar methods ever since he came to power in 2009 (local pundits have taken to calling him ‘the blackmail prime minister’). In the short term, the gambit forced ND to announce it is going to support the new 130 billion euro bailout agreement with the EU, which entails more, extremely harsh, austerity measures whose acceptance is a pre-condition set by Greece’s “partners” for releasing a pending bailout installment from a previous package, already overdue, and thus forestall a Greek “disorderly” default. Papandreou then indicated he was willing to abdicate in the face of upheaval inside his own Pasok party and rapidly growing popular discontent so that a “national salvation government” could be formed with the participation of the main opposition. At the same time though he forced a vote of confidence to his unraveling regime and did win the parliamentary ballot on November 5 with just the 153 votes of his own party. The main opposition reacted with a refusal to participate in any negotiations toward a coalition government as long as Papandreou remains at the helm. Right now, the “blackmail prime minister” continues maneuvering in an apparent effort to retain a defining degree of control over the evolving political play.

But why all this commotion with “salvation” administrations etc when elections appear the only proper democratic way of resolving the political impasse?

Papandreou and his entourage know that a general election right now will finish Pasok as a political force and sent all of its primary actors into the wilderness, perhaps forever. Hence, his desperate effort to hold on to power and increase the chances of remaining in charge for a few months more, even at the expense of exposing the country to the threat of expulsion from the European “union” as Greece’s “partners” become convinced Athens is a dangerous burden out of control that must be thrown off at all costs. Also, Greece’s “partners” would rather avoid an electoral contest right now fearing that an already destabilized Greece will become even more unmanageable after Pasok’s certain defeat, but without the main opposition gaining enough votes to form a single-party majority government.

Then, how do we resolve this impasse?

We don’t, really, not, at least, under the present circumstances of paralyzing uncertainty and the existing rigidities built into Greek society since the restoration of parliamentary rule in 1974. The current crisis is unprecedented even by Greece’s shambolic political standards and thus beyond the capacities of any of the old “methods,” including pitting one social class against another in the classic game of divide and rule. The Greek political system, as it developed after 1974, is rapidly unraveling in a catastrophic sequence under the unbearable pressure of the economic collapse and the cross-eyed, straightjacketed German insistence on genocidal austerity that guarantees permanent pauperization of the less frugal and technically adept members of the Eurozone. Greece has thus become the literal testing ground of how far a society may tolerate austerity policies that viciously restrict even the very basic means of survival without exploding into an apocalyptic rebellion. It is doubtful that any of the current Greek political forces has the political wherewithal of harnessing the extreme rage of the Greek people that could overflow at any minute after the announcement of yet another random tax hike or the imposition of more cuts on salaries and pensions, already hovering very near levels that haven’t been seen in Greece since the 1960s (when the cost of living is calculated in 2011 euros).

And what of the wider impact of a complete Greek unraveling?

Economically, Italy and Spain will be immediately harpooned by the “markets.” Collapse of those two would spell the collapse of the European “union” as enough monies to save both simply do not exist. At the same time, social unrest across European cities should not be underestimated. Europe’s debt crisis is essentially a political crisis triggered by woefully substandard leadership and a complete surrender of politics to “financial institutions.” This is an enormous knot that can’t be untied with “consensus” and the cheap political tricks European “leaders” have become accustomed to in recent years. European politicians need to do a lot better than what they “achieved” so far in the case of Greece -- because chaos in Europe can trigger chaos in the world with the result of the whole house coming down in one big bang.

 

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