2011-11-02: Why I think the Greek referendum is a good idea
I think the decision of the Greek government to hold a referendum on the austerity packages is a very wise one. The reaction of the markets was foreseeable, but I still find it very disappointing. Popular unrest is running high, and the government can’t ignore it (or violently oppose it) forever.
So the government is putting the matter to the people: Do you want to continue the good life with Blackberries and the Internet, or do you want to go back to the Stone Age and live solely on what the land will yield? If it’s the former, you have to play by the rules of capitalism, and accept the mess you have gotten yourself into. If you are happy with the latter, just default on your debt, cease importing anything (except what you can barter for feta cheese, olive oil and wine – forget tourism, nobody’s gonna come) and live off what you can produce yourself. Maybe that means a few less people.
I am not saying the austerity measures the outside world is trying to impose on Greece are fair. I am also not saying the austerity measures the Greek government is proposing are socially just. To be fair, I’m pretty positive that they are not.
But no matter what, the times of spending by lending are over. I think that forgiving a substantial part of the debt is essential, and then Greece can join the circus again, at a lower level for everyone than today.
There is an alternative. But I don’t think the protesters on the streets of Athens are really prepared to take it. By putting it to the people, Papandreou can then point to his renewed mandate (if he does get it) and carry on trying to salvage some of the good life with Blackberries and the Internet for his people. Or he’s voted down, and then it’s going to be the Stone Age.
But either way, he will have a mandate.
