Whatever the calculations behind it, regardless of whether it would have ever happened, the call for a Greek referendum on the EU agreement of 26th October put important issues on the public agenda that should not be overlooked. Whilst it remains to be seen how, if at all, these issues will be addressed by leaders in the future, George Papandreou leaves the Prime Ministerial office of Greece to make way for the agreement’s implementation under a new government of national unity. He leaves behind an important set of questions to answer at the start of a new global economic and political era.
Political consensus is a vital prerequisite for any country, or indeed union of countries, if there is to be a successful exit from crisis. This is especially clear when the exit strategy employed is characterised by painful austerity measures and deep structural changes that rapidly transform the landscape of social and economic prosperity within a country. Unexpectedly, the call for a referendum achieved just such a consensus within Greece.
Up to last week, there was significant public discontent in Greece against the measures taken under the “Troika” (IMF, EC, ECB) loan agreement of March 2010. These terms were very different to the agenda on which Papandreou and his party, PASOK, had originally been elected. Although bringing Greece to the IMF worked favourably towards achieving consensus in Europe, back in Greece, reflecting a widespread lack of understanding of the seriousness of the situation, a populist denial of the urgency of painful measures was cultivated. The primary stoker of this fire that has now engulfed Papandreou has been the main opposition party in Greece, New Democracy, and its leader, Antonis Samaras. By embracing a hollow and sterile oppositional rhetoric, condemning the Troika reforms without offering a serious alternative, Greece was pointed precariously towards the path of Argentina in the early 2000s. The call for a referendum presented an opportunity for Samaras to perform a ‘volte-face’ and, with an elegant political pirouette, Samaras seized the chance to both switch arguments, and twist the knife. By again stymieing Papandreou’s attempts to fashion a solution, this time on the issue of the referendum, whilst simultaneously endorsing Europe’s policy prescription, Samaras adopted the previous government’s position whilst disposing of the previous government itself.
The call for a referendum has again exposed the informational asymmetries that exist between people, opinion makers and the political establishment, both in Greece and internationally. The mainstream media narrative has seized upon the, undeniable, unrest and social breakdown within Greece as evidence of a majority rejection of the requirement to reform. As a nation of individuals facing the greatest crisis in their country’s modern history, the referendum call presented Greeks with an opportunity to take responsibility for their actions and for the path they choose to follow for their future. This is an important message not just for Greece but for all democracies across the world. If the Eurozone solution, and indeed the kind of Europe that subsequently emerges, is to represent more than simply ‘kicking the can down the road’ in order to maintain the status quo, there is a requirement to reinvigorate the debate on a grassroots level. Similar to issues that relate to the financial crisis in its entirety, there is a public disconnection that stems from a feeling that the dominant issues are not the business of the electorate and are to be resolved by those specialists that know the area and should be entrusted to resolve the issue for all of us accordingly. Greeks have been placed in the stocks at the centre of the European village for all to condemn, whilst a group of Platonic guardians – markets, experts, technocrats – determine how to save them from themselves. Confronted with this spectacle, the call for a referendum has served to further highlight the democratic disconnect within European affairs that has become all too evident during the crisis. By attempting to open the discussion, and lay bare the stark realities of the Greek position, Papandreou pointed the way towards a process that, although unclear at this stage, is nonetheless vital for wider Europe: public discussion of what being a part of the Eurozone/European Union in a globalized world means and why participation makes sense.
What is at stake here is not merely the implementation of a tough love programme of economic and structural reforms for small countries like Greece. Neither is it only about the containment of a nation’s bankruptcy and the restriction or avoidance of the attendant contagion unleashed in the economic aftershocks throughout the international community. What has become clear from the ‘Merkozy’ statements and the positions of other G-20 leaders last week is that the Greek dilemma is representative of a looming challenge to many democratic societies across the world: what is the cost of remaining within an unreconstructed geopolitical and geo-economic system that is rising from the crisis’s ashes and who should bear this cost? Can countries be dealt with like private firms, and to what extent can the sub-par market logic – with bond yields and credit rating agencies as its arbiters – be imposed onto the nature of global affairs and the dealings of nations with other nations?
The machinations of the past few months should be understood as the institutionalisation of a new balance of power within a reformed European integration project, and the naked emergence of new global power realities through coordinated action, or lack thereof, in the G-20. For all that this makes sense, and it does make sense, there is some validity to the current pariah on the EU periphery, yet apparent fulcrum around which economic policy reform turns, throwing down the gauntlet to political leadership. By calling for a referendum Papandreou made a politically fatal step for himself, but a giant leap forward for Greece and the rest of the world. His “salto mortale” resisted a market pressure that has sought to sideline approaches that privilege the choices and welfare of democratic societies, grounded in a deep sense of shared history and a common vision for the future. However desperate the political logic or diplomatically inconsiderate the action taken, Papandreou’s call for a referendum teaches us that leaders, and indeed political and economic establishments, ought to make important decisions that are democratically legitimate by seeking to foster a genuine dialogue with the societies they represent.
Undeniably, as much as it may seem a paradox, the call for a referendum was a major catalyst for change. It forced political consensus, and it encouraged people within and outside Greece to firstly recognise and secondly commit through their elected party representatives to their own fair share of responsibility stemming from the recent EU agreements. It clarified misconceptions and raised important questions about what costs nation states and citizens should bear in order to be part of a larger geopolitical and geo-economic system that must enforce and legitimise economic policies that do not lead to greater division, enmity and conflict. As it stands we have saved global firms to sacrifice nation-states. Today, more than ever, is the time for political leaders to put people back at the centre of their understanding of the global financial crisis, and at the forefront of the new system that is emerging from the wreckage.