The Greek referendum brings democracy into the Euro crisis

 

               The decision to let the Greek people vote on the latest deal to try to save the Euro is a wise one. One of the biggest dangers of the deal was the lack of consent by the Greek people for the austerity measures that were a crucial part of it. The Greek government was unlikely to get away with the tax rises, spending cuts and requirement for lower wages if it had just blundered on without asking the voters. Inside the currency Greece needs big wage cuts. Outside, these matters can be disguised by devaluation.

               Many proponents of the Euro will be worried. They will say Greece has no choice. They will be alarmed that Greeece might vote No. They will dislike the uncertainty and delay which the referendum causes.

            In reality, there was no ability to deliver their preferred policy without some means like a referendum of getting people to accept the chosen course of action.  The Greek government and the Euro elite now have their chance to persuade the Greek people that staying in the Euro and accepting the cuts is their best way forward. They might be able to do that.

              If they cannot win a referendum, there are still two courses of action open to them. They can improve the deal for Greece by finding more money to help them from elsewhere in the zone, or they can sort out their exit from the single currency.

               Let us hope the Greek people are more sensible than their government. Early opinion polls say they will vote down this scheme. Getting themselves out of the Euro would be the least damaging of the various unpleasant choices before them. It will be interesting to see if the Euro elite have the power of persuasion to save their currency  in Greece.

               Meanwhile, of lesser importanace, we will watch yet another Euro area government face major defeat. This currency scheme is a great way of  getting rid of elected governments. It makes its popularity with those governments all the more suprising, as politicians usually want to survive in power.

               The Labour and Lib Dem  parties and Conservative Coalition Ministers argued last Monday that if the Uk held an EU referendum now it would distract from the crucial Euro area process of sorting out their troubles, which should take priority. Now the Greeks themselves from within the Euro zone think a referendum is necessary this UK argument looks less well based. 

               I made enquiries of the Backbench Business Committee concerning the timing of the Petition debate on the EU, as one blogger said it would have been better to have it this week. A representative of the Committee explained that last Thursday was the only date the government gave them for any debate, so they thought they had just  better get on with it. Other worthwhile and popular debates remain in the queue.

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102 Comments

  1. NickW
    Posted November 1, 2011 at 7:45 am | Permalink

    Politicians receive huge rewards in failure just like the Bankers they criticise.

    Europe will reward its own, and Senior members of Government can look forward to the riches of Blair once they are no longer in office.

    Provided they do what Europe wants.

    One would hope that our Greek Ambassador is quietly reassuring the Greeks that HMG will do everything in its power to facilitate matters, should Greece decide to leave the Euro. It is in everyone’s interests that the transition is as smooth as possible without vindictiveness by Brussels, should the vote go that way.

  2. Posted November 1, 2011 at 7:49 am | Permalink

    “Inside the currency Greece needs big wage cuts. Outside, these matters can be disguised by devaluation.”

    Whether inside or outside the Euro, Greece needs big wage cuts. I’m not sure it is right to say that they can be “disguised by devaluation”. They won’t be disguised for those whose standard of living falls.

    What an escape from the Euro will give Greece is an assessment of the true value of its economy. It will not be disguised, and nor should it be, it will be exposed for all to see including the Greek people who will have to face reality.

    If only we had a government with the guts to face the reality of our current budget deficit (and the staggering debt to which it adds each year).

  3. Electro-Kevin
    Posted November 1, 2011 at 8:00 am | Permalink

    You asked us what powers from Europe we would like repatriated in an earlier post.

    We would settle for having some repatriated from Messrs Clegg and Cameron first. I should imagine that would be a good start.

    • Tim
      Posted November 1, 2011 at 2:17 pm | Permalink

      Turkeys dont vote for Christmas so I can’t see the Greek people voting for tax rises, wage and pension cuts etc. Therefore, they will default and leave the Euro. Then perhaps the wave of public opinion sweeping across Europe and particularly the UK will demand our say on the monstrous EU.
      All the arguments put forward by europhiles like Messrs Cameron and Clegg are specious. We had a trade deficit of £50 billion last year and £262 billion net over 10 years. Of course they will want a trading relationship with us. We just want all other powers back from the interfereing bureaucrats who do not know best!

      • lifelogic
        Posted November 1, 2011 at 9:15 pm | Permalink

        You say “We just want all other powers back from the interfereing bureaucrats who do not know best!”

        Indeed not – the problem is they know, only too well, what is best for them (UK and EU bureaucrats all know this and work very effectively to this end). The political control through elections and MPs is so minimal they can get away with it, almost completely unhampered by the need to consider the interests of the public at all.

  4. Martyn
    Posted November 1, 2011 at 8:01 am | Permalink

    The history of EY referendums is clear; any referendum not producing the result required by the EU will either be ignored or huge pressure (thinly veiled threats) will be applied to the electorate to vote as they are told to in a second referendum.
    I suppose in the worst case it could result in a military coup in Greece if the voters say ‘nay’ and their government and the EU refuse to accept the outcome. It would be interesting to know whether or not the Greek police and armed forces are being paid well enough to be relied on to keep the peace should the public rebel? If not, what then? EU troops on the streets of Athens, perhaps?

    • John Fitzgerald
      Posted November 1, 2011 at 8:53 am | Permalink

      When did the EU acquire an army?

      • Martyn
        Posted November 1, 2011 at 1:32 pm | Permalink

        Not an army, as such, but troops etc from the EU nations who support its foreign policy. For example what I would call the existing ‘EU Navy’ with its HQ in the UK has several of our RN ships roaming the world in company with other nations vessals on EU business and at EU direction. My understanding is that a similar organisation could be called into being with ground and air forces ot EU nations if push comes to shove….

      • Sean O'Hare
        Posted November 2, 2011 at 8:19 pm | Permalink

        Not quite an army yet, but an armed police force:

        http://www.eurogendfor.eu/

        watch this space as they say.

    • scottspeig
      Posted November 1, 2011 at 11:14 am | Permalink

      I would hope given the past, that if troops are sent in that we would support the civilians and allow the current leader of Greece to be forced from power and a “peoples’ party” installed.

      • davidb
        Posted November 1, 2011 at 5:55 pm | Permalink

        Ha Ha. All the parties with the exception of small minority parties, in most member states support the EU. Their high officials all get cosy secondments in Brussels when their terms in office end. Turkeys? Christmas? Nah!

    • andy
      Posted November 2, 2011 at 6:27 pm | Permalink

      i agree with what your saying , i see some sort of coup or such serious civil disorder that the all beneficent EU send in troops as military assistance.
      i cant imagine the Greek PM will be allowed to get away with something so outrageous and unheard of as giving the electorate a real choice.
      I say real choice as i think all the acceptable parties in Europe are bought and paid for EU quislings . Look at the differences in the UK parties , they pretend to differ but when it comes to the EU they all agree . Up until last week the lib dems still had it on their website that they supported a referendum .
      there are of course dissenting voices within those parties , but these can be ignored or if they get within a sniff of real power they are systematically discredited

  5. lifelogic
    Posted November 1, 2011 at 8:07 am | Permalink

    I agree fully – let us hope democracy wins, and they get out of the euro and start the slow rebuilding their economy after its destruction by the combination of the Greek state sector, corruption and the EURO insanity combined.

    • lifelogic
      Posted November 1, 2011 at 8:21 am | Permalink

      It will be interesting to see what happens in Italy and the rest of the PIGIS (lots of referendums to come perhaps) but non in the UK of course (other than for the libdems AV nonsense).

      I see that Clegg was trying to defend the EU yesterday but could not think of anything positive beyond the usual false free trade claims, having our say and something about patents.

      Is that the best he can find? What is Clegg’s solution for Greece one wonders democracy? Is he a Liberal Democrat or not?

    • uanime5
      Posted November 2, 2011 at 12:35 am | Permalink

      Greece won’t be able to rebuilt its economy if the EU kicks them out for destabilising the Euro. If the Greeks oppose the EU they can expect many decades of hardship.

      • lifelogic
        Posted November 2, 2011 at 7:50 pm | Permalink

        They certainly will be able too.

  6. norman
    Posted November 1, 2011 at 8:14 am | Permalink

    Hilarious if it wasn’t so serious but we are where we are. The situation has now descended into low farce, which was always where it was going to end up.

    Has David Cameron phoned the Greek PM yet to tell him that the Lisbon Treaty / EU Constitution has already passed so a referendum on any EU matters is useless, or that now is not the time to be holding a referendum?

    Our governments position is thus exposed as the sham we all knew it was from day one.

    When the whole thing comes apart at the seams you have to wonder how George ‘more unity, more EU’ Osborne and David ‘now is not the time for us to do anything except to send boatloads of your cash over the channel’ Cameron will spin it. With half truths and obfuscation I’d bet.

    • lifelogic
      Posted November 1, 2011 at 9:30 am | Permalink

      You sensibly ask:- “Has David Cameron phoned the Greek PM yet to tell him that the Lisbon Treaty / EU Constitution has already passed so a referendum on any EU matters is useless, or that now is not the time to be holding a referendum?”

      Indeed to Cameron it must be an unfortunate “distraction” at this difficult time (of their own making) for the EU. But who will be Queen in 65+ years is not a distraction and clearly very important – or rather is the sort of good distraction Cameron rather likes. Mainly as is distract from the insanity of his approach to the EU.

    • Javelin
      Posted November 1, 2011 at 5:48 pm | Permalink

      I understand it is impossible for an EU member to leave the Euro. A Euro member can leave the EU and is this free to leave the Euro, but needs to be let back in the EU. Either way requires the EU to support them.

      • norman
        Posted November 2, 2011 at 3:25 am | Permalink

        That’s what I think but if we have learned one thing over the course of this prolonged crisis it’s that rules can be bent. Look at the EFSF fund and how that was used, one contributor here, Denis Cooper I think, seems very knowledgeable on such matters and often posts detailed posts on how they are bending, if not breaking, such rules.

        Leaving that aside there is also the practical question of what to do if this referendum goes ahead and the Greek people vote ‘no’. I suppose it might be possible for Greece to receive no more money but I don’t think that’s practical so the options would be forgive all Greek debt and continue transfers (Italy, Portugal, et al would be thrilled at that, I’m sure) or allow Greece to somehow leave the Euro.

        It still leaves the bigger north / south divide problem unsolved though. If the EU leaders had any gumption they’d use this fresh crisis to really try and come to a lasting solution based on that divide, not the sticking plasters we’ve seen up til now.

      • Denis Cooper
        Posted November 2, 2011 at 8:26 pm | Permalink

        Just on the legalities, rather than the practicalities, I’ve looked but I can’t find a specific “no exit” clause in the present EU treaties to explicitly prohibit a country from ever leaving the euro once it has joined; but certainly while Article 140 TFEU is there to get a country into the euro by an orderly process there’s nothing at all about subsequently getting a country out, on either a voluntary or a compulsory basis.

        There was a protocol brought in with the Maastricht Treaty, the “Protocol on the transition to the third stage of Economic and Monetary Union”, which may still be read here:

        http://eur-lex.europa.eu/en/treaties/dat/11992M/htm/11992M.html#0087000011

        “THE HIGH CONTRACTING PARTIES,

        Declare the irreversible character of the Community’s movement to the third stage of Economic and Monetary Union by signing the new Treaty provisions on Economic and Monetary Union.

        Therefore all Member States shall, whether they fulfil the necessary conditions for the adoption of a single currency or not, respect the will for the Community to enter swiftly into the third stage, and therefore no Member State shall prevent the entering into the third stage.

        If by the end of 1997 the date of the beginning of the third stage has not been set, the Member States concerned, the Community institutions and other bodies involved shall expedite all preparatory work during 1998, in order to enable the Community to enter the third stage irrevocably on 1 January 1999 and to enable the ECB and the ESCB to start their full functioning from this date.

        This Protocol shall be annexed to the Treaty establishing the European Community.”

        I find that Protocol was still attached to the consolidated versions of the treaties in December 2006, as Protocol (No 24) on page 298 here:

        http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2006:321E:0001:0331:EN:pdf

        but rather oddly it was repealed by a Protocol attached to the Treaty of Lisbon, page 5 here:

        http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2007:306:0165:0194:EN:PDF

        (That’s the Treaty of Lisbon which we were told no longer existed as a treaty.)

  7. Richard1
    Posted November 1, 2011 at 8:16 am | Permalink

    All these months we’ve been wondering what the rioters in Greece were thinking of -what did they expect rioting to achieve? Now we know: the more they riot the better deal Greece gets at the expense of other Eurozone taxpayers. The most likely outcome of this latest development is the referendum votes no, a few hundred or thousand Greeks riot again and the Greek Govt comes back and says ‘awfully sorry, you’ll have to give us more money’ – which they will get. Its time for the people of Germany to tell their govt to stop this nonsense and kick Greece out of the Euro, and focus on sorting out the resulting mess instead of pretending the problem will go away.

    • alan jutson
      Posted November 1, 2011 at 9:06 am | Permalink

      Richard

      Yes, and this was the very reason why Cameron was so wrong about refusing a referendum here.

      A no vote will strengthen the Greeks negotiation powers, as indeed it would have done for Cameron here, but he simply could not see it.

      At least Greece is begining to take note of its citizens, shame it has taken nearly 12 months of strikes and riots before it came to its senses.

      I wonder how long before Cameron starts to take notice of us.

      Should the second referendum petition request pass the 100,000 required signatures John, what do you think of the subect being debated again ?.

      Reply: Unlikely – the backbench commitee has other good demands for debates, and there is no reason to suppose Labour and Lib MPs are about to change their vote. I f Labour did change its mind they could always hold an Opposition debate and vote on it.

      • Boudicca
        Posted November 1, 2011 at 6:13 pm | Permalink

        How long before Cameron starts to take notice of us?

        Two possibilities: 1) when UKIP overtakes the LibDims in the polls and the lead is sustained and 2) 2014 when the next EU Parliament elections are held and UKIP comes out the clear winner.

        • Disaffected
          Posted November 2, 2011 at 9:43 am | Permalink

          Spot on.

        • Posted November 15, 2011 at 3:26 pm | Permalink

          Good question and one he is no doubt getting asked every day. Now Italy has bitten the dust surely the time is near to take back OUR powers. Come on Cameron get a wiggle on!

  8. Richard
    Posted November 1, 2011 at 8:17 am | Permalink

    This is wonderful news. The EU mandarins must be absolutely fuming.
    It looks inevitable that the Greek people will initially vote aginst the bail out package they are being offered and so will have to vote again and again until the correct answer is obtained.
    Perhaps the EU if it gets three or four no results, will eventually insist on the referendum vote being overseen by electoral commission staff from Zimbabwe, Iran and North Korea.

    • A different Simon
      Posted November 1, 2011 at 11:22 am | Permalink

      Some credible and respected people in Ireland still insist that the published results of the second referendum on Lisbon did not bear relation to the results of their exit poles .

      If we had held a referendum in the UK on EU membership do you think the results would be honestly collated and reported given the unanimous support for the EU project from those who own all the money ; the political class , finance and big business ?

      The results are whatever BBC reports them to be .

  9. Brian Tomkinson
    Posted November 1, 2011 at 8:40 am | Permalink

    I note that this referendum is to be held in January next year which seem a long time away to me; there is plenty of time for “persuasion” to be applied to Greece.
    Normally if a member state of the EU has a referendum and votes against the wishes of Brussels they are made to vote again to get the correct result. Will that happen this time?
    How long before there is a military coup as happened in 1967 in Greece?

  10. Denis Cooper
    Posted November 1, 2011 at 8:59 am | Permalink

    There’s no certainty that this referendum will actually take place, and even less is there any certainty about which way the Greeks would vote given that a majority oppose the bail-out package but a larger majority still want to remain in the euro.

    It’s much more certain that if the referendum did take place then the Greeks would not be allowed to decide for themselves without outside interference, including the usual illegal interventions by the EU Commission and other EU institutions.

    The Greeks would be told that voting against the bail-out would be tantamount to voting to leave the euro, and by extension to leave the EU.

    I expect somebody could explain the financial reasons why the Greek government could not default on its debts without Greece having to leave the euro.

    At present there are still ten EU member states (temporarily) using their own national currencies, so there would be no obvious practical need for Greece to leave the EU if it left the euro; but as leaving the euro would be illegal under the EU treaties as they stand the Greeks could be threatened with illegal retaliation in the form of expulsion from the EU.

    That would differ from the case of Ireland, where some euromaniac hotheads talked about “booting the ungrateful Irish out of the EU” if they voted against the Lisbon Treaty, because under the existing EU treaties the Irish retained the legal right to vote against any new treaty.

    I have little idea what position the UK government will adopt about this, given that it is committed to preserving the present eurozone intact but would not want Greece to be booted out of the EU; however on past showing it seems most likely that its position will be both dishonourable and against our national interests.

  11. Alan Wheatley
    Posted November 1, 2011 at 9:22 am | Permalink

    During the recent debate on holding an EU referendum an oft repeated augment against the motion was that the timing was wrong. OK, so lets have a little fun speculating on when the timing would be right, as seen from the point of view of the Conservative Party Management.

    At the Euro elections in 2014, the Conservative vote, on current trends, could mean they come second. This would be a very bad platform from which to go into the general election the following year. But the PM has already burnt his bridge for calling an early election. However a general election before the euro election could be triggered should the government loose a vote of confidence in the Commons as a consequence of loosing the support of their coalition partner. If the confidence vote was lost as a consequence of upholding conservative principles then it would not harm Conservative prospects. How could this happen?

    The PM could set a policy that the LibDems would find impossible to follow, and a prime candidate for such a falling out is obviously the EU. The PM could say that in view of the overwhelming public support for a referendum on the UK’s membership of the EU that the government are going to start preparation for renegotiating the UK’s relationship within the EU and, in the event that such negotiations do not produce an acceptable outcome for the UK, preparations for an orderly withdrawal. The options, of staying in under under the renegotiated terms or of leaving in accordance with the withdrawal plan, would be put to the Country in a referendum.

    Such a stance from the PM could be prompted by the result of another ePetition (ends 4/8/2012), that an EU in/out referendum be held. Of course, other things also have to fall into place.

    Firstly we have to assume that there still is an EU. As things look at the moment a future EU is likely to be substantially different to the EU we have at present. Renegotiation could well be aimed at making the UK exempt from, say, 90% of the terms that apply to “euro” members.

    Secondly the PM will have to throw off his malleable EU persona to reveal a cast-iron core. Leaders are worthless if they have no followers. And we should bear in mind that Conservative Party leaders come and go, so the future is not necessarily in the hands of one man.

  12. Steve S
    Posted November 1, 2011 at 9:30 am | Permalink

    “It makes its popularity with those governments all the more suprising, as politicians usually want to survive in power”

    This is not surprising to me at all – it is a perfect illustration as to how the normal democratic situation has been corrupted by supra-national government. The EU afterlife is far more enticing than the hard yards of real democracy.

  13. Tedgo
    Posted November 1, 2011 at 9:40 am | Permalink

    I think its a crafty move on the part of the Greek Government. Over the next couple of months the EU will move to write off all Geek dept, such as 100% haircuts and like.

    The EU will fall over itself to get a yes vote.

    I don’t see why the Greek Government does not literally print, on real paper, 200 billion Euro’s to pay off its debt and pay the wages of its civil servants. This massive QE would start to push the value of the Euro down. If Italy did the same would it not ultimately force Germany out of the Euro.

  14. backofanenvelope
    Posted November 1, 2011 at 9:41 am | Permalink

    Well, here we go! The Greeks do not fancy working longer, working harder, retiring later and paying taxes. Who does? I lived in Germany for some years; I didn’t notice that they were particularly keen on doing any of these things.

    It’s a shame the question to be put to the Greeks can’t be framed in those terms. Would you like to work harder and longer; or take it easy and be poorer. But not that poor…..

  15. Jer
    Posted November 1, 2011 at 9:43 am | Permalink

    Obviously a referendum is the right course for Greece for the reasons you state.

    However if Greece does re-denominate her debts to Drachma, and devalue, does that mean we would suffer losses on our monies already advanced via the IMF?

    • lifelogic
      Posted November 1, 2011 at 11:48 am | Permalink

      Yes I assume.

    • dan
      Posted November 1, 2011 at 5:27 pm | Permalink

      you mean you havent written that money off already?

  16. Chris
    Posted November 1, 2011 at 9:47 am | Permalink

    I was very interested in a D Tel article not long ago about Chinese influence in Greece, and their plans for a port hub at Athens/Piraeus to rival Rotterdam, and the establishment of the Silk Road into Europe, with a network of bases to support this.
    I think that the Chinese have not been veryresponsive so far to EU pleas for money, and maybe they are just laying the foundations for the time when Greece is out of the Euro, when they will move in on a larger scale than at present and offer help to rebuild the Greek economy?

    http://www.telegraph.co.uk/news/worldnews/europe/greece/7869999/Chinas-new-Silk-Road-into-Europe.html
    “…China’s new Silk Road into Europe
    A bold bid for Greece’s premier port of Piraeus by state-owned Cosco has given Beijing a foothold on the doorstep of the Continent. …
    China’s state-owned shipping giant Cosco last month took control of Pier Two in a £2.8 billion deal to lease the pier for the next 35 years, investing £470 million in upgrading the port facilities, building a new Pier Three and almost tripling the volume of cargo it can handle. …The Chinese envisage creating a network of ports, logistics centres and railways to distribute their products across Europe – in essence a modern Silk Road – hastening the speed of East-West trade and creating a valuable economic foothold on the continent. They aim to make the container port a hub to rival Rotterdam – Europe’s largest port.
    “The Chinese want a gateway into Europe,” said Theodoros Pangalos, deputy prime minister. “They are not like these Wall St ****s, pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece.”

  17. Posted November 1, 2011 at 9:47 am | Permalink

    If the people of Greece get it “wrong” won’t they simply be asked to vote again . . . . and again, if necessary, until they get it “right”?
    Wasn’t this what happened in Ireland where they had a second vote after the EU had spent millions of Euros (of taxpayers’ money) on publicity and implied threats?

    And in calling a referendum, the Greek Prime Minister has shown that he believes in democracy, unlike ours who sees one as a distraction! Presumably the Euro crisis will rumble on in the meanwhile, as the markets will consider last week’s decisions now to be meaningless until the results are known.

  18. Peter van Leeuwen
    Posted November 1, 2011 at 9:55 am | Permalink

    As a strong Europhile and although generally opposed to referendums I would make an exception for this one if it’s to be genuine. With this “hardship package” proposed by the IMF/EU/ECB and a pretty clear choice (in or out of the euro), asking a direct vote of confidence from the citizens instead just from the parliament is probably a good thing.

  19. Ian Wragg
    Posted November 1, 2011 at 10:08 am | Permalink

    I think this is pre planned. Greece is preparing to leave the Euro zone and will be printing Drachmas ready for after the referendum.
    I think it’s excellent, Germany telling us there is no time for grandstanding and Greece anounces a referendum in January.
    Who’s next?

    • Jon Burgess
      Posted November 1, 2011 at 9:55 pm | Permalink

      I for one can’t wait to book a Greek holiday next year…

  20. Acorn
    Posted November 1, 2011 at 10:14 am | Permalink

    Some people lack vision. “You can’t start a new political party, in the UK, on the basis of a book from a think tank”. Why not I say. “It will be impossible to disconnect from the EU by 2016, they say”. It’s worth a go I say. http://www.civitas.org.uk/press/prtimetosayno.htm .

    We Euro-sceptics inside and outside of Westminster, need an agenda for change. Mr Milne has written a mission statement that works for me. It needs some Euro-sceptic MPs to put their names in an “action” column on each page.

  21. lola
    Posted November 1, 2011 at 10:14 am | Permalink

    The Labour and Lib Dem parties and Conservative Coalition Ministers argued last Monday that if the Uk held an EU referendum now it would distract from the crucial Euro area process of sorting out their troubles, which should take priority.” Classic. It’s the other way about.

  22. javelin
    Posted November 1, 2011 at 10:25 am | Permalink

    Good point about the UK Government saying it was not the right time for a referendum when Greece is having one. I do think the crisis will intensify so the right time for a referendum is when the EZ project is more broken.

    With delicious Irony “Reykjavik University October 7-8 2011” held a conference on the Debt Crisis in the Eurozone. An excellent paper was presented of a model of poor (in both senses of the word) Governments that borrowed too much to seek electoral popularity. From this point of view the Spin Doctors, Over Borrowing, Mass Immigration of Labour Voters, Appeasing Donors etc that became common practice under Labour are all symptoms of the same underlying mind set.

    “Sovereign Debt, Government Myopia, and the Financial Sector” by Viral V. Acharya, Raghuram G. Rajan.

    “What determines the sustainability of sovereign debt? In this paper, we develop a model where myopic governments seek electoral popularity but can nevertheless commit credibly to service external debt. They do not default when they are poor because they would lose access to debt markets and be forced to reduce spending; they do not default when they become rich because of the adverse consequences to the domestic financial sector. Interestingly, the more myopic a government, the greater the advantage it sees in borrowing, and therefore the less likely it will be to default (in contrast to models where sovereigns repay because they are concerned about their long term reputation). More myopic governments are also likely to tax in a more distortionary way, and create more dependencies between the domestic financial sector and government debt that raise the costs of default. We use the model to explain recent experiences in sovereign debt markets. “

  23. lifelogic
    Posted November 1, 2011 at 10:26 am | Permalink

    No real growth again 0.5% after adjusting for the Japanese Tsunami supply chain problems and the royal wedding day off that employers had to pay for (hardly surprising – given the Cameron/Clegg anti-growth policies in place).

    I also see an add for loans on daytime TV this morning with a typical APR of 276% should this really be allowed is it ever in any one’s interests to borrow at these rates? Other daytime TV adds are for very over priced life cover, the personal injury no win no fee (and get a free Ipad into the bargain) and bring a claim against your bank (something far better done yourself).

    Is anything advertised on TV ever worth buying? Should any of these even be legally allowed?

    • Adam5x5
      Posted November 1, 2011 at 4:00 pm | Permalink

      Those absurdly high interest rates are for short term loans.

      The problem is the APR figures that you have to quote in include arrangement fees as well. with a short term, low value loan, these figures become a large percentage very quickly. especially if you actually want to make a profit.

      APR is not suitable for this product.
      a not-for-profit version was set up in the states a while back, just to cover costs they had to charge over 200% APR equivalent.

      • lifelogic
        Posted November 1, 2011 at 9:19 pm | Permalink

        The APR is the real rate they are paying they would always surely be better off without the loan unless of course they do not intend to repay it.

    • Bazman
      Posted November 1, 2011 at 7:25 pm | Permalink

      £276%? What a bargain! 1734% APR representative in one. some nearly 3000% APR. Good to see the market giving choice. They’re transparently and heroically fighting the evil system created by banks lending you a few quid until pay day, like you would buy a best same a few extra pints if he did the same for you. Who understands APR and banking anyway?

  24. Damien
    Posted November 1, 2011 at 10:45 am | Permalink

    Having difficulty posting here, just testing!

  25. Martyn
    Posted November 1, 2011 at 10:55 am | Permalink

    Just spotted this in ‘Der Spiegel’. SPIEGEL: But the summit resolutions neither ensure that Athens will bring its budgetary problems under control nor will they stimulate the labor market.
    Germany’s Finance Minister Schäuble: Wait and see! You are forgetting the sweeping measures …… with Greece, which range from support for the implementation of the programs by the European Commission’s Greece task force and the troika (IMF, ECB and EU) — which will now be continually on location — to EU funds that are available for Greece.
    It wouldn’t take much to add the EU armed forces to the ‘continually on location task force’ if necessary I guess…

  26. Sophie
    Posted November 1, 2011 at 10:57 am | Permalink

    It comes to something when a recycled Greek crypto socialist Prime Minister has more democratic credentials than the current leader of the British Conservative Party & “almost” Prime Minister.

    One way or another, the people of Great Britain will also be heard.

    I think the “heir to Blair” will have to surrender his dream of becoming EU President, an achievement his hero & mentor Blair could not crowbar himself into.

    • dan
      Posted November 1, 2011 at 5:28 pm | Permalink

      what about the rest of the United Kingdom?

  27. The Meissen Bison
    Posted November 1, 2011 at 11:30 am | Permalink

    Would it be fair to assume that the bail-out and its attendant austerity package dwarfs all other issues for Greece?

    If so, a general election would be quicker and consequently better than a referendum.

  28. Bernard Otway
    Posted November 1, 2011 at 11:33 am | Permalink

    Looks like Dominic Sandbrook’s pre history or prequel or whatever it might be called from the Mail on saturday 29th oct ,is actually a correct PROPHESY.But there have been correct PROPHESIES
    about the whole Euro project since before it,s inception,and HOW do the idiots who labelled
    those who warned about it such horrible names look now.They are lucky that I am not coming into contact with them on a daily basis ,I would HARANGUE them at EVERY opportunity and I mean every opportunity,if they saw me they would RUN.

  29. forthurst
    Posted November 1, 2011 at 11:35 am | Permalink

    Our politicians have become accustomed to telling lies in order to get elected and then pursuing their own odious agenda behind our backs, certain in the knowlege that their treachery would largely be covered up by the state broadcaster and the rest of the MSM. Thus when it was revealed that the Labour Party had been deliberately (increasing immigration-ed) this country from the third world in order to make us more ‘vibrant’, it went largely unreported or commented on by their fellow conspirators masquerading under different colours.

    The EUSSR programme of abolishing the independent states of Europe has been ongoing for decades and the more the people of Europe understand about its effects, the less they like it.

    It remains to be seen whether the at some point the people of Europe decide to use other means than the ballot box to remove politicians who have grown fat on the treason they espouse, funded by a malevolent elite hovering behind the curtain.

  30. A David H
    Posted November 1, 2011 at 11:54 am | Permalink

    Sounds as though those 400 second-hand USA tanks, recently bought by Greece, may come in useful after all. “Over the top you go corporal Van Rompuy!”

  31. Posted November 1, 2011 at 12:16 pm | Permalink

    Can Mr redwood remind us what the benefits of UK EU membership actually are?I must have missed him re this matter.Perhaps he can outline them for us.

    Reply: Why do I have to do that. I voted No, remember.

  32. lifelogic
    Posted November 1, 2011 at 12:33 pm | Permalink

    I see that Huhne, having “kick started” the pointless UK ‘s Photo Voltaic industry, is now halving the feed in tariffs. So I assume he expects us to believe it was a good idea to kick start the industry but it is now a good idea to kill it stone dead.

    Fortunately I do not have any shares in this doomed politically driven “PV house bling” industry. Hopefully everyone will look at the numbers and tell suppliers where to get off.

    The figures did not even make sense at the old (double) feed in tariffs. I am still waiting to hear how much energy Huhne’s toy windmill has produced so far.

    Enough yet for a hot bath for Mr Huhne I wonder?

  33. Robert Christopher
    Posted November 1, 2011 at 12:33 pm | Permalink

    John, in your thread “‘We have a deal’ versus ‘There is no money left’ – the future of the Euro'”, from Oct 27, you say:

    “Meanwhile the two tier EU is taking shape. Euroland is becoming a club within the club. The UK needs to get on with negotiating a new relationship with it. The Uk has to accept that as Euroland presses on to fuller political and economic union, more and more will be decided by the 17. In return for this, the UK needs to make more of her own decisions about things that matter most to us, whilst keeping single market matters as the decisions of the 27 EU members, not just the 17 Euro members.”

    Here is article from a German newspaper, Spiegel Online echoing your initial views (if not the actions Britain should take!):

    “But the price of her [Merkel’s] success in Brussels is the division of Europe. Those countries that are not part of the euro zone are now no longer part of a core Europe, and are now being asked to leave the room when the truly important issues are being debated. While the 17 euro-zone members walk at the front of the pack, the 10 non-euro-members are forced to walk behind, like stragglers and second-tier nations.

    And now they have it in writing. In the closing document of last week’s summit, euro-zone member states grant themselves the right to work together more closely without having to wait for the non-euro countries. The EFSF also deepens the divide. It is a facility set up by the 17 countries in the monetary union for the 17 countries in the monetary union.
    Indeed, the European flag, the symbol of the European Union, doesn’t fly in front the EFSF headquarters on John F. Kennedy Avenue 43 in Luxembourg. Only the blue-and-yellow colors of the logo indicate the relationship between the EFSF and Europe.

    The 17 euro-zone leaders decided to make the bailout fund and its director, Klaus Regling, even more important in the future. Regling will receive more power and influence, as well as more money. He will become the nucleus of a new Europe driven by fiscal policy.”
    http://www.spiegel.de/international/europe/0,1518,795059,00.html

    So how can the government keep our relationship with the EU unchanged when there are “Events, my dear boy, events” occurring, not to mention the new Greek referendum.

    Do you want to be part of a new Europe driven by fiscal policy?

    I can guess the reply 🙂 but does Cameron want it?

    Can you make inquiries?

    • Robert Christopher
      Posted November 1, 2011 at 12:43 pm | Permalink

      It is worth reading the whole article, including the second page! It has:

      “The British will have to think about whether they want to remain in the EU at all. There is a strong movement among the Conservatives to withdraw from the union. And most other non-euro EU members will keep their noses to the grindstone so that they can soon be part of the core club.”

      And this from a German paper!

      Can they come and take over the BBC?

  34. stred
    Posted November 1, 2011 at 1:08 pm | Permalink

    Would it not be less expensive to compensate banks which have been persuaded to lend excessively to Greece directly, and arrange a well organised exit from the Euro?

  35. Posted November 1, 2011 at 1:27 pm | Permalink

    This development makes the option I laid out in my comments to your blog here:
    http://johnredwoodsdiary.com/2011/11/01/the-greek-referendum-brings-democracy-into-the-euro-crisis/
    much more relevant now John.

    (please could you publish my reply to Alan? 🙂 )

  36. Chris
    Posted November 1, 2011 at 1:30 pm | Permalink

    I was very interested in a D Tel article not long ago about Chinese influence in Greece, and their plans for a port hub at Athens/Piraeus to rival Rotterdam, and the establishment of the Silk Road into Europe, with a network of bases to support this.
    I think that the Chinese have not been veryresponsive so far to EU pleas for money, and maybe they are just laying the foundations for the time when Greece is out of the Euro, when they will move in on a larger scale than at present and offer help to rebuild the Greek economy?

    http://www.telegraph.co.uk/news/worldnews/europe/greece/7869999/Chinas-new-Silk-Road-into-Europe.html
    “…China’s new Silk Road into Europe
    A bold bid for Greece’s premier port of Piraeus by state-owned Cosco has given Beijing a foothold on the doorstep of the Continent. …
    China’s state-owned shipping giant Cosco last month took control of Pier Two in a £2.8 billion deal to lease the pier for the next 35 years, investing £470 million in upgrading the port facilities, building a new Pier Three and almost tripling the volume of cargo it can handle. …The Chinese envisage creating a network of ports, logistics centres and railways to distribute their products across Europe – in essence a modern Silk Road – hastening the speed of East-West trade and creating a valuable economic foothold on the continent. They aim to make the container port a hub to rival Rotterdam – Europe’s largest port.
    “The Chinese want a gateway into Europe,” said Theodoros Pangalos, deputy prime minister. “They are not like these Wall St ****s, pushing financial investments on paper. The Chinese deal in real things, in merchandise. And they will help the real economy in Greece.”

  37. Norman Dee
    Posted November 1, 2011 at 1:35 pm | Permalink

    If only the peoples of the Eurozone were allowed to holiday in the other Eurozone countries it would provide valuable income to those countries. These holidays would of course be compulsory, and if you didn’t go the price of the holiday including an estimate for spending during the holiday, would be taken from your bank account. Those countries outside the Eurozone would be punished by not being allowed holidays at all, no fly restrictions in place for these wicked countries who dare to go against the “UNION”.
    Stupid, but no less futile than everything else that’s going on.

    • norman
      Posted November 2, 2011 at 3:33 am | Permalink

      Maybe they could build a fleet of special cruise ships for the task. What to call it though, what we need is a short, catchy phrase, something that affirms the joyous nature of the holidays while at the same time pointing out that that joy comes through the strength of the EU.

      Suggestions?

  38. Posted November 1, 2011 at 1:37 pm | Permalink

    You are absolutely right here John. Naturaly all broadcast reporting of this has been about how dreadful a referendum is. In fact in a democracy (& even to a far larger extent than normally recognised, in a dictatorship) you have to ultimately have the people’s approval. The people can be led but not driven. Remember that and few leaders of either sort will not end up respected.

  39. Ewiak Ryszard
    Posted November 1, 2011 at 1:51 pm | Permalink

    The fate of the European Union is sealed. This is confirmed by analysis of the Bible. “And [the king of the north = Russia] will go back (to) his land with great wealth [1945]; and his heart (will be) against the holy covenant [state atheism]; and will act [this means activity in the international arena]; and turned back to his own land [1991-1993. The collapse of the Soviet Union and the Warsaw Pact. Russian troops returned to their country]. At the appointed time [he] will return back.” (Daniel 11:28, 29a) Now Russia will return. It also means the economic and political earthquake; the disintegration of the European Union and NATO. Many countries of the former Eastern Bloc will return to the Russian sphere of influence.

  40. oldtimer
    Posted November 1, 2011 at 2:16 pm | Permalink

    The referendum is an unexpected but welcome development. The propaganda lines that emanate from the EU ahead of this vote will be revealing, plus the amount of money they spend on it. I believe they spent a small fortune to get Ireland to keep on voting until they got the result they wanted.

    The other aspect is timing and how Greece will keep itself afloat. Presumably the recent measures remain in limbo until the outcome is clear. In the meantime Greece needs cash and it will be hard to find on the bond markets. So the question is this. Will the money run out before the referendum result is known?

  41. Posted November 1, 2011 at 2:19 pm | Permalink

    John’s point that governments are prone to falling while they have limited room to manoeuvre within the Euro straight jacket may well result in other governments using referendums to bolster their negotiating position or even to exit the Eurozone.

    Perhaps democracy will come back into fashion.

    Meanwhile the BBC talked of tents and cathedrals on the Today programme. The next programme was an interview with a campaigner about social injustice followed by a programme featuring a campaigner for women’s rights.

    With the vote in Parliament last week and last night’s decision for a Greek referendum we now have a real prospect of improving women’s rights and restoring social justice as democracy fights its way back in Europe.

  42. zorro
    Posted November 1, 2011 at 2:45 pm | Permalink

    John, for some reason the Eurocrats do not share your enthusiasm for referendums……A communique from our Brussels masters has just come out….Imagine the clenched teeth here and the sheer contempt….

    ‘We take note of the intention of the Greek authorities to hold a referendum. We are convinced that this agreement is best for Greece.’

    ‘The Presidents of the European Council and Commission have had a telephone conversation with Prime Minister Papandreou.’

    Translation – Dear Greece, do as you’re ******g told or else.

    How pleasant it is to live in our democratically accountable EU……

    zorro

  43. BobE
    Posted November 1, 2011 at 3:42 pm | Permalink

    John, Can you explain what you think will happen if the Greek people vote this austerity package down? Is there some alternative action that could be taken instead?

    Reply: They could leave the Euro and devalue, or the Euro area could give them a better deal.

  44. lifelogic
    Posted November 1, 2011 at 3:43 pm | Permalink

    Jon Moulton, on Newsnight last night, sensibly pointed out that there will be very little growth (at we see again today 0.1% FOR THE YEAR) when the state is at 50%. The private sector clearly cannot compete with other countries where the state is perhaps just 25%.

    I see today however that they are all doing vital things like Cameron’s “Happiness index” (see details below). Is “Cast Iron” Dave Cameron going totally mad already?

    As reported:

    People are to be asked how satisfied they are with their husband, wife or partner, under government plans to measure the country’s happiness.
    The Office for National Statistics has published a list of 10 indicators of well being, including health, education, income, work and trust in politicians.
    A three-month consultation will now begin before a final list is published.
    David Cameron’s “happiness index” is intended to complement other measures of the state of the UK such as GDP.
    The list of national wellbeing indicators was drawn up following a five-month debate involving 34,000 people on the question “What matters to you?”
    Statisticians narrowed that down to 10 areas, including seven relating to personal wellbeing and three wider indicators – governance, the economy and the environment. Top of the list of measures in the ONS consultation document is individual happiness. Among the questions likely to be asked are: “Do you feel your life is worthwhile? How satisfied are you with your husband, wife or partner?” People would also be asked about job satisfaction and whether they feel they achieve a balance of work and leisure activities.

    Simply Mad: – A balance of work and leisure activities might be rather easier to achieved if tax payers did not have all these pointless parasites to carry!

  45. Mike Stallard
    Posted November 1, 2011 at 3:45 pm | Permalink

    If I were in the Greek Army, I should be watching the referendum very carefully.
    If it went the way of independence, and the EU forbade it, I would be on the streets with my men immediately.

  46. matthu
    Posted November 1, 2011 at 4:04 pm | Permalink

    tweet reported in The Telegraph and worth repeating here:

    @reutersJeremyG: Fabulous typo from RBS note on Greek referendum – “We thus view this as a major negative for Greece and the rest of the momentary union”.

  47. waramess
    Posted November 1, 2011 at 4:16 pm | Permalink

    Fascinating that the real solution to all these problems seems to have been sidelined by the politicians. Austerity imposed on the people is not quite the same as shrinking a bloated government; and they are all bloated

  48. Bernard Otway
    Posted November 1, 2011 at 4:38 pm | Permalink

    I have just rejoined the party and intend to make myself an absolute nightmare for my local conservative MP,who voted with the WHIPS last monday week, as it is, in the past I astonished him BUT NOW apropos the saying “he ain,t seen NOTHING YET”. And as a 66 yrs old I have AT LEAST the 48 hours a week I used to work to devote to the task

  49. frank salmon
    Posted November 1, 2011 at 4:51 pm | Permalink

    The EU should let any country leave the Eurozone and make joining optional.
    And it should let any country within the EU have sovereignty above that of the EU.

  50. Caterpillar
    Posted November 1, 2011 at 4:53 pm | Permalink

    Assuming the Greek Govt doesn’t collapse in the coming days/weeks, alongside the democratic advantage of a referendum, there is a practical advantage that preparation for both results has to be made. A large amount of effort has been spent on the save the EZ plan, but with a referendum a plan for (orderly) default and Euro withdrawal has to be made.

  51. Mactheknife
    Posted November 1, 2011 at 5:48 pm | Permalink

    Now this development will really upset the politico’s in Europe. Asking the people what they want – whatever next !! But it does put a spotlight on our own governments attempts to put off any kind of referendum and shows the utter contempt in which we are held by those in power. If its good enough for the Greeks who are in desperate trouble, then why is not good enough for us?

    If the Greeks vote “no” where does this leave the “Euro Project” ? I’m not an economist but surely is would spell the end or at least the begining of the end.

  52. Richard
    Posted November 1, 2011 at 6:10 pm | Permalink

    This was an article I read in the comments blog of todays Daily Telegraph which I thought those on this site might find interesting. Its one I wish I had written.
    The original newspaper article concerned Greece deciding to have a referendum.

    “Poor old Europe, blundering around in the hands of rogues and fools. Some of the greatest nations the world has ever seen, with centuries of culture, achievement and invention behind them, being led to the brink of extinction by a shower of charlatans. The heart bleeds, it really does. Not one single citizen of Europe, past or present, deserves this fiasco. The sacrifices people have made, the wars fought, totalitarian systems defeated – all for this: so that bankers and their pawn politicians can loot the whole of Europe with impunity.

    And the nerve of these people – criticising the call for a referendum! Democracy has been so far dismantled that they recoil in horror at the very idea of the free citizens of Greece having any say in the decisions that affect them, and that they have to pay for.

    Under the twin grips of personal greed with its unwillingness to see their gravy train derailed and their possession by an ideology that Europe must be one big Superstate (with them in charge, naturally) – they are manically, frantically rushing to the edge of the cliffs like the lemmings they so resemble, thrashing around wildly at anything in their way.

    It must work! It must! We cannot be seen to fail! Quick – throw more money at the problem, stoke up more debt, impoverish everyone, take all their money, trash their sovereignty – anything! just as long as we end up with our Superstate.

    The dream of the European federal State is crumbling before our eyes, and not before time. If it carries on any longer, if these people are allowed to get away with this chicanery – we would inevitably see the dark shadow of fascism stalking Europe once again. The seeds are already there.”

  53. Boudicca
    Posted November 1, 2011 at 6:15 pm | Permalink

    The EU is already going into overdrive to prevent a Referendum taking place, as Papandreou knew it would. This is a tactical ploy to improve the terms.

    The EU will move heaven and earth – and print billions of Euros to prevent the Greek people (or any other nation come to that) from having a Referendum that would almost certainly destroy the single-currency and quite possibly the EU shortly afterwards.

    Still – here’s hoping the Greeks tough it out and demand their democratic rights.

  54. Martin
    Posted November 1, 2011 at 6:20 pm | Permalink

    Re the Greek referendum – the real devil will be in the detail. Presumably YES will mean support for last week’s measures and NO is anything else.

    The trouble with NO is that it covers a multitude of opinions and doesn’t take the thing forward.

    Those who think a Greek default wonderful should remember that it would mean that Greece could not borrow a penny again for decades. Every time it runs out of cash there would be no money for oil and the pumps will go dry.

    The supporters of devaluation should note that China will use every trick in the book to ensure that not one factory relocates to Greece to take advantage of a cheaper currency.

  55. Chris
    Posted November 1, 2011 at 7:17 pm | Permalink

    Two interesting comments on the Debt Crisis Live in the Daily Telegraph:
    http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html
    1. Prediction from Bruno Waterfield, Brussels correspondent, that Papandreou will have stepped down by tomorrow and his referendum will be gone with him. (I understand from what Merkel and Sarkozy seem to be saying that EU bailout plans agree last week must go ahead as planned but rather quicker).
    2. D Tel reports that Sarkozy says ‘that “the sole possible way” to resolve the eurozone crisis is to press ahead with the deal struck on October 27, and not delay matters with a referendum’. It also quotes Sarkozy as saying:
    ” Giving people a voice is always legitimate, but the solidarity of all the eurozone countries is not possible unless each one agrees to measures deemed necessary”.

    I think this sums up all one needs to know about the operation of the EU.

  56. Bazman
    Posted November 1, 2011 at 7:31 pm | Permalink

    The Greeks should all just threaten the government that if they have to pay more taxes that they will all go and live abroad and take their business with them.

  57. lifelogic
    Posted November 1, 2011 at 9:31 pm | Permalink

    Benefits of EU membership – well there is a clear benefit to failed politicians – the Kinnock family, Mandelson and similar. Also on occasions, such as with Peter Oborne on Newsnight recently, the officials can be very absurd and highly amusing.

    All the rest could be far better arranged by good government in the UK and international agreements as needed – not that this is very likely to happen either.

  58. Chris
    Posted November 1, 2011 at 9:59 pm | Permalink

    It is reported in the Athens News tonight that Greek defence minister, Panos Beglitis, has replaced all defence chiefs of staff and some other military personnel with men “of his own”. This supposedly has nothing to do with current crisis although it took many members of the government and armed forces by surprise.

  59. Bernard Otway
    Posted November 2, 2011 at 12:30 am | Permalink

    Tried to comment BUT capture code would not take even though I typed it correctly and quintuple checked with my wife verifying

  60. uanime5
    Posted November 2, 2011 at 12:31 am | Permalink

    The Greeks are playing a dangerous game. EU leaders may not be willing to write off 50% of Greek debt and continue to bail them out if Greece continues to act a like a spoiled child.

  61. Bernard Otway
    Posted November 2, 2011 at 12:35 am | Permalink

    Having watched Ed balls interviewed by Jon Snow on channel 4 news at 7 he sounded euro sceptic about this greek issue in fact VERY sceptic,I think he senses that electorally it is a winning attribute,then watch Ed Milli change and both pull the rug out from under Cameron,s feet.

  62. Diogenes
    Posted November 2, 2011 at 4:47 am | Permalink

    The EU has broken its own rules on the criteria for membership in the Euro. this was set at a maximum of 60% national debt. It let in countries that flouted this rule. Then it allowed them to borrow at the very low interest rates that good creditor nations had earned. But this is all to be expected from an organisation that has itself not had its accounts signed off for the last 16 years, I hear!

    The EU is like an unrepentant alcoholic. It has a long way to go yet before it reaches the gutter. It is still in the denial stage, full of swag and arrogance. Little Slovakia stood up to the drunkard briefly but was then browbeaten into submission. This EU is a monster!

  63. Quietzaple
    Posted November 2, 2011 at 8:14 am | Permalink

    I’m slightly surprised that the nobs who boss the EU are miffed over Papa’s Referendum. He has to make this bailout work and needs those … Greek people .. to up their games (as the Americans put it) and to have an accepted way ahead, probably involving garrotting bankers and smashing their Porsches on prime time tv (no daytime tv anymore)

    I suppose Papa might have mentioned the need for a Refrendum ( the EU in zgreece is not no 16 on their list of priorities as it is on ours) but then Merk and Sark might have told him where to go …

    I think the Greeks may go for it as John Redwood suggests they may. Or not, likewise.

    How Hospitable is the EU? That may swing it.

  64. Disaffected
    Posted November 2, 2011 at 9:41 am | Permalink

    Greek generals were sacked yesterday. Perhaps the Greeks are not so daft.

    Look at what the Europhiles did to Ireland when they dared to vote against the Lisbon Treaty. They fought inside (threats of corrupt smears against political leaders) and outside Ireland and effectively got rid of the political party that was the most popular in Ireland since 1932- where was the support from the UK Government to help Ireland choose its own destiny? Later we were given bsht to say why the UK should bail them out when the real reason was to help the EU machine keep rolling on.
    The Europhiles will threaten and threaten to do everything in their power to wreck any chance of Greece surviving if they leave the EU. The UK and the other 9 outside the single currency should offer support to Greece to ameliorate the threats. However, Osborne is already publicly siding with fanatical Germany and France and spinning why the deal agreed last week should be upheld. Hardly the position of a Eurosceptic.

  65. Chris
    Posted November 2, 2011 at 12:57 pm | Permalink

    I agree with you, Bernard. Labour are obviously looking closely at what could deliver for them a killer blow with regard to the next election, and I believe that Ed Balls has recognised current EU membership and immigration as the issues that are pivotal. Labour have made many about turns in the past, so I believe that this is not inconceivable.

  66. javelin
    Posted November 2, 2011 at 1:24 pm | Permalink

    Interesting to see EFSF pulled the £3bn latest bond auction today.

    The EFSF say they will try again over a couple of weeks.

    The Irish need E4bn by the 11th of November.

  67. javelin
    Posted November 2, 2011 at 2:00 pm | Permalink

    The point being if the EFSF can’t issue E3bn today ( because lack of investor confidence in the counter party risk ) how are they EVER going to issue E1-2tr ?

    It appears nobody want to invest in the EU – was this the last straw?

    • Denis Cooper
      Posted November 2, 2011 at 5:44 pm | Permalink

      I heard that they’d decided to cut back the size of the issue, but now they’ve postponed it?

      I expect the Irish will get the E4 billion one way or another.

      The EFSF should have about E3.5 billion to hand, and although that’s supposed to be the buffer for previous issues I expect they could dip into it and put it back later.

      Mind you, people have gone to prison for doing that kind of thing …

  68. Chris
    Posted November 2, 2011 at 4:11 pm | Permalink

    The Athens News seems to be a good source of news on the current crisis and referendum call, with some extra detail. I rather admire Papandreous’s spirited response that the time and manner of announcing a referendum was the Greek’s own business – he claims that the EU knew in advance that he was going to call one, but not the exact date. I think that after his meetings later today, with the powers that be, his attitude will have “softened”. He is up against a formidable power base and I do not believe that he will be in power much longer. Quote from: http://www.athensnews.gr/portal/8/49924

    “However, government spokesman Elias Mossialos denied on November 2 that EU leaders were unaware of Papandreou’s plans to call a referendum.
    “Prime Minister George Papandreou had informed our European partners of his intentions, but he had not informed them on the exact date of their announcement,” he told private radio station Vima. “It lies with the Greek prime minister when and in what way a political initiative is announced. It’s a part of our national sovereignty and our political initiatives.”

  69. Bernard Otway
    Posted November 2, 2011 at 7:09 pm | Permalink

    Disaffected
    Sacking generals by politicians to try and affect an outcome is extremely STUPID especially in greece,the soldiers in the event of a coup will still follow the Generals especially when the politicians are all fools.F W de Klerk tried to do the same with General Constandt Viljoen
    in South Africa in 1992 , he withdrew his attempt as the men showed he would command them NO MATTER WHAT ,the ONLY President to do that to a General in the USA was Truman to Macarthur over Korea BUT look who is revered in History and look at the names from WW2 Patton,Macarthur,and yes Rommel,Monty,Bradley etc etc etc my family is all military in the past and my father was on Monty’s staff,that is why I have my christian name ,he would have died for him and his country ,nearly did in Palestine after becoming a Palestine policeman and winning the Kings police medal and bar and the colonial police medal and bar losing the use of his left arm for the rest of his life. DO NOT
    UNDERESTIMATE soldiers.

  70. Lindsay McDougall
    Posted November 3, 2011 at 3:38 am | Permalink

    Given the Franco German response to the referendum announcement, the choice before the Greek electorate is now clear:
    (1) Stay in the eurozone / 50% default / accept bailout + austerity package 2
    (2) Leave the eurozone / magnitue of default and austerity to be determined

    Let us hope that both sides of the argument campaign honestly. We should resurrect Perfidious Albion by offering to finance part of Greece’s costs in returning to the Drachma. Fat chance with his coalition government !!

  71. Robbo
    Posted November 3, 2011 at 10:30 am | Permalink

    Wow, Greeks allowing democracy on the EU issue !
    Let’s see, we can expect our referendum then in 508 plus 1832 years time that is 4351 AD
    I’ll mark my calendar

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