Greek economy referendum

A referendum to decide whether or not Greece was to accept the conditions under which the European Union (EU), the International Monetary Fund (IMF) and the European Central Bank (ECB) would allow a 50% haircut of Greek debt owed to private creditors.[1] However, Prime Minister George Papandreou decided to cancel the referendum on 3 November[2] if the opposition parties vote in favour of the EU deal.[3] The proposed referendum was later canceled.

Background

On 31 October 2011,[4][5] Prime Minister George Papandreou announced the referendum saying that: "We need wide consensus (for the aid programme). We are part of the eurozone [which means] many rights and many obligations. We will live up to our obligations."[6]

Constitutional issues have arisen with regards to such a referendum, as Article 44 of the constitution of Greece specifies that referenda on critical national matters and social bills are permitted while referenda on fiscal bills are not.[7] This will be Greece's first referendum not having to do with a change in the form of government,[8] and the first referendum since 1974.[8]

Date

Papandreou suggested the referendum would be held on 4 December.[6] However, Finance Minister Evangelos Venizelos specified that the referendum would take place in 2012, after the plans for the haircut have been finalised.[9] Other sources put the date of the referendum to December 2011.[10] According to Nicolas Sarkozy the referendum would have taken place on 4 or 5 December 2011.[11]

Opinion polls

Polls in Greece suggested that up to 60% of Greeks were against the deal reached with the EU over Greek debt on 27 October 2011,[4][5] however a survey in September 2011 showed that 63% of Greeks viewed the euro as something positive.[12] The same survey showed that 66% of Greeks viewed the return to the drachma as something negative.[12]

Response

Domestic

The initial response of the Greek political parties was negative.[13] New Democracy leader Antonis Samaras described it as an "indirect national schism",[13] while most opposition parties demanded elections[13][14][15][16] and condemned the government for what they perceived to be a maneuvre to avoid early elections.[13] Konstantinos Mitsotakis, Prime Minister of Greece between 1990 and 1993, described the move to hold a referendum as utterly irrational and irresponsible.[17] The Greek media also adopted a negative stance, with many calling it a coercive move.[18][19]

Following the announcement of the referendum on 31 October 2011, 1 November saw the resignation of one MP from the ruling party,[20] lowering Papandreou's government majority to 152 seats[20] in the 300-seat Hellenic Parliament. An additional six members of Papandreou's Panhellenic Socialist Movement have demanded early elections.[21]

In the early hours of 2 November 2011, George Papandreou and his cabinet decided to speed up the referendum process,[22] and attacked the Greek media by calling them bankrupt and that they have "gone mad" over the referendum.[22][23] Additionally the cabinet decided that a committee would be set up to decide the time when the referendum would take place and the question that people would be asked to vote on,[22] but only after the basic characteristics of the new memorandum with the Troika have been decided.[22] During that cabinet meeting, a number of ministers expressed concerns over the referendum.[22][24]

Financial markets

The Athex stock market index fell amid concerns for instability,[25] as well as global financial markets on concerns about EU stability and a possible Greek default on its debt.[26]

Cancellation

On 3 November, Papandreou reneged on his promise and announced that the referendum will not take place afterall[27] following the opposition of four ministers, including Finance Minister Evangelos Venizelos, who opposed the referendum amid calls for Papandreou to resign.[28] He said that the Greek presence in the eurozone "cannot depend on a referendum." Several MPs also resigned following the decision, with Nikos Salayannis said that: "The referendum is dead."[29] In response, global financial markets rose.[26] Following an emergency visit to Cannes for the 2011 G-20 Cannes summit, where Papandreou faced pressure to call off the referendum, New Democracy's spokesman Yiannis Michelakis said that "the comments made by Mr Papandreou, as well as those by [French President] Nicolas Sarkozy and [German Chancellor] Angela Merkel, revealed that he suggested to them that in Greece there is a supposed questioning of whether Greece should remain in the eurozone and the European Union. It is clear that no such problem exists and that Mr Papandreou – through sudden and despicable misinformation – is trying to create it himself." Party chairperson Antonis Samaras also said that "the only problem that exists is Mr Papandreou remaining as prime minister,” said Michelakis. “He is dangerous and he has to go."[30]

The referendum was later canceled amidst domestic and foreign pressure. U.S. President Barack Obama said that though the G20 summit in Cannes sought to alleviate European sovereign debt concerns the "actions of Papandreou and the referendum issue got a lot of people nervous" and the EU proposal was "still the best recipe." Dutch Prime Minister Mark Rutte said the cancellation was a good decision amidst possible eurozone impatience with Greece. "It was a bizarre proposal. We think it’s of great importance to the eurozone that we prevent Greece from going bankrupt. But in the end, the euro is more important than Greece’s membership of the eurozone." Conversely former German Chancellor Gerhard Schroeder said that: "It’s no surprise Papandreou hardly had a chance to push through what was being demanded from him. The conservatives across Europe did very little to convince the Greek conservative opposition to stop acting irresponsibly."[31]

Vote of confidence

During discussions for a vote of confidence held on 4 November 2011, Evangelos Venizelos, the Greek Minister of Finance, expressed his view that the decision on whether or not Greece should remain in the Eurozone is not something that should not be put to a referendum,[32] and called for a government of national unity.[32] On 3 November, two other members of Papandreou's parliamentary group announced they would not give the government a vote of confidence.[33][34] This lowered the ruling party's parliamentary group votes to 150, which was below the threshold for majority in the parliament (151 seats). Dimitris Lintzeris, a PASOK MP, said that "Papandreou is past"[35] and that "he continues to act carelessly and turns his failure into a coercive [referendum]".[35]

Amid concerns that Greece could leave the eurozone dependent on the referendum result, Papandreou faced a vote of confidence in parliament on 4 November. He said that "I ask for the vote of confidence to avert the instability that would be caused if the country is dragged into elections. Now is the time for cooperation with good intentions and a feeling of national responsibility."[36] Before the vote he pledged to step down saying that re-election was not important to him, thus avoiding infighting within PASOK;[37] he also said that he would seek a coalition government for four months in order to pass the new EU debt agreement,[38] though New Democracy rejected such a motion to join a coalition government.[39] The motion passed with a vote of 153-145 in the 300 seat parliament, after PASOK's 152 MPs and Louka Katseli, formerly a member of PASOK, supported the prime minister. She was then brought back into the party fold.[38]

New government

Following the vote of confidence, Papandreou met President Karolos Papoulias the next day to begin talks on forming a new coalition government. Papandreou also said that he would resign and allow another interim prime minister. Though New Democracy's Samaras demanded a snap election, an interim coalition government could have possibly involved Popular Orthodox Rally, Democratic Alliance and/or the Democratic Left. However, Democratic Alliance chairperson Dora Bakoyannis said that an interim government to pass the EU demanded austerity measures must include New Democracy to make the government viable.[36] Bakoyiannis also added that "there is no point in us supporting Papandreou without Samaras, we don't have enough votes to make a difference anyway. We'll support a coalition and vote with them, without any demands of positions, if Papandreou and Samaras can work it out."[40] Though Samaras continued to demand a new election in saying that was the only option for "stabilisation of the country, to restore its image, and to emerge sooner from this nightmare,"[37] he also added that an interim coalition government was a good idea in order to pass the bailout bill. Papandreou also said that: "My aim is to immediately create a government of co-operation. A lack of consensus would worry our European partners about our country's membership of the eurozone."[37] He added that forming a coalition meant that he would "do whatever I can to help form a coalition government. The Oct. 26 decisions and obligations stemming from this are a condition for the country remaining in the euro." An anonymous member of PASOK suggested that Papandreou believed that Venizelos was the most appropriate person to head am interim coalition government as "Venizelos is the main negotiator in Europe, so there will be continuity, although New Democracy is fiercely against this proposal." Papandreou also hoped that a new government would be formed by 7 November, before eurozone finance ministers meet in Brussels to discuss the next scheduled bailout fund for Greece. However, according to PASOK, Papandreou would not resign until there was clarification on who would lead the coalition government and that he wanted a new government in the following week. LAOS also added that Samaras should reconsider his position as forming a coalition government has been "achieved with the departure of Papandreou from power."[40]

Finance Minister Evangelos Venizelos added that an interim administration would serve until the end of February, after which a new election would be called following the passage of the 8-billion-euro loan tranche.[36] Papandreou added that "elections at this moment not only equal disaster but could not take place in the best interest of the people. There is one solution. To support the [EU bailout] deal with a multiparty approach, without elections, with a strong government" and that he sought to "immediately create a government of co-operation [because] a lack of consensus would worry our European partners about our country's membership of the eurozone."[37] An unnamed senior member of PASOK said that Papandreou would resign as soon as a new government is formed, possibly on the night of 6 November.[41]

On 6 November, Papandreou and Samaras agreed to the formation of a new coalition government that would not be led by Papandreou[42][43] following a meeting with Papoulias. Papoulias' office issues a statement that read the leader of the government would be decide by the leaders of the largest parties the following day, but it did no mention the tenure of the government. However, Papandreou said that "it is clear that this government will pass the baton but it will not pass it to a void - it will pass it to a new government, if we agree on it, and I hope this will happen soon. I'm not interested in being prime minister in the new government;" he also added that a new election should not be held before February or March until the bailout legislation is approved by parliament The announcement also followed a European Union deadline before a finance minister meeting on 7 November about the formation of a government and the enactment of a bailout agreement. Papoulias said that "an agreement was reached to form a new government to immediately lead the country to elections after ratifying the decisions taken by the European Council."[44]

Lucas Papademos was suggested as the possible leader of a new government.[45] He later agreed to be the interim prime minister until a future election.[46] At the last minute there was controversy over Papademos amongst both PASOK and New Democracy and a joint announcement for the new PM was put off till 10 November. Samaras blamed PASOK for the delay saying that the constitution demanded that the ruling party had the prerogative to name a candidate for prime minister.

In what Al Jazeera called an "apparent farewell address" Papandreou said on television that: "We have agreed on someone who will unite us. I would like to wish every success to the new prime minister and of course the new government. I will stand by them and I will support them with all my strength."[46]

International

Supranational
International

References

  1. ↑ "Ρίσκα και αβεβαιότητες από την πολιτική "βόμβα" για δημοψήφισμα" [Risks and uncertainties by the political "bomb" for a referendum]. Skai TV. Retrieved 31 October 2011.
  2. ↑ "Hoping Greece Scraps Referendum, Dow Leaps 208". Fox News. Retrieved 3 November 2011.
  3. ↑ Smith, Helena; Gow, David (3 November 2011). "Papandreou scraps Greek referendum as open warfare erupts in his party". London: Guardian. Retrieved 4 November 2011.
  4. ↑ 4.0 4.1 "Papandreou calls referendum on EU deal". Euronews. Retrieved 31 October 2011.
  5. ↑ 5.0 5.1 "Greece debt crisis: Referendum promised on EU deal". BBC. 1 November 2011. Retrieved 31 October 2011.
  6. ↑ 6.0 6.1 "Greek referendum possibly held on Dec. 4: Greek PM". Xinhuanet. 3 November 2011. Retrieved 3 November 2011.
  7. ↑ "Τι προβλέπει το Σύνταγμα στο άρθρο 44 για το δημοψήφισμα" [What the Article 44 of the Constitution provides for referenda]. Skai TV. Retrieved 31 October 2011.
  8. ↑ 8.0 8.1 "Τα 7 δημοψήφισμα του νεοελληνικού κράτους" [The 7 referenda of the modern Greek state]. Agelioforos. Retrieved 31 October 2011.
  9. ↑ "Ευ. Βενιζέλος: Από το νέο έτος το δημοψήφισμα" [Evangelos Venizelos: Referendum to take place after the new year]. Skai TV. Retrieved 31 October 2011.
  10. ↑ "Greek referendum likely to sidestep bail-out issue". Financial Times. 2 November 2011. Retrieved 2 November 2011.
  11. ↑ Fouquet, Helene (2 November 2011). "Sarkozy: Referendum Will Decide Greece’s Future". Bloomberg. Retrieved 2 November 2011.
  12. ↑ 12.0 12.1 "Οι Έλληνες, το Ευρώ και η Δραχμή Νο. 2" [The Greeks, the Euro and the Drachma No. 2]. Public Issue (Kathimerini). Retrieved 2 November 2011.
  13. ↑ 13.0 13.1 13.2 13.3 "Ομοβροντία από την αντιπολίτευση που ζητάει εκλογές" [Opposition bursts, demanding elections]. Eleftherotypia. Retrieved 31 October 2011.
  14. ↑ "ΚΚΕ: Εκλογές τώρα" [Communist Party of Greece: Elections now]. Ethnos. Retrieved 31 October 2011.
  15. ↑ "ΝΔ: Ο Παπανδρέου πατάει γκάζι για το γκρεμό" [New Democracy: Papandreou is heading full speed ahead for the cliff]. Ethnos. Retrieved 31 October 2011.
  16. ↑ "Δημοκρατική Αριστερά: Ας προχωρήσει η χώρα σε πρόωρες εκλογές" [Democratic Left: Let the country head for elections]. Ethnos. Retrieved 31 October 2011.
  17. ↑ "Νέοι Φάκελοι 31/10/2011" [New Folders 31/10/2011]. New Folders (Skai TV). Retrieved 1 November 2011.
  18. ↑ "Η Ελλάδα στο μπαρμπούτι" [Greece on "gunpowder"]. Skai TV. Retrieved 1 November 2011. Με το εκβιαστικό, και εξ ορισμού σχηματικό δίλημμα, που θέτει η κυβέρνηση, όπως και αν αυτό διατυπωθεί, επιχειρεί να πετάξει το μπαλάκι στον λαό• “υπερήφανε ελληνικέ λαέ είτε ψηφίζεις 'ναι' και αποδέχεσαι έτσι αδιαμαρτύρητα το μείγμα των όποιων πολιτικών μας, είτε ψηφίζεις 'όχι', απορρίπτεις τη συμφωνία με τα πλεονεκτήματά της ("κούρεμα" του χρέους, χαμηλότερα επιτόκια, δανειακή στήριξη ύψους 100 δισ. ευρώ) και τότε φταις εσύ και όχι το πολιτικό προσωπικό για τα επιγενόμενα. ["With the coercive, by definition, delemma that the government sets, however this may be worded, it is attempting to throw the ball on the side of the people; 'proud Greek people you either vote 'yes' and thus accept this government and its politicians without further protests, or you vote 'no' and you turn down the agreement (of 27 October) with the benefits it brings ("haircut" on the debt, lower interest rates, a loan of 100 billion euro) and then its your fault, and not the fault of the country's ruling politicians."]
  19. ↑ "Φοβάται τις κάλπες και πετάει το μπαλάκι με δημοψήφισμα" [He's afraid of elections and he's "throwing the ball" with the referendum]. Eleftherotypia. Retrieved 1 November 2011. Επί της ουσίας, ο κ. Παπανδρέου ρίχνει το μπαλάκι στο λαό για μια μεγάλη και κρίσιμη απόφαση για το μέλλον της χώρας και βάζει με το δημοψήφισμα εκβιαστικά το δίλημμα «ή ψηφίζετε ναι, ή η χώρα πτωχεύει». ["Basically, Mr. Papandreou is throwing the ball to the people for a very big and crucial decision for the future of the country and through the referendum puts forth the coercive delemma of 'you either vote yes, or the country is going bust'."]
  20. ↑ 20.0 20.1 "Φυλλορροεί το ΠΑΣΟΚ, ανεξαρτητοποιήθηκε και η Μιλένα" [Defoliation of PASOK, Milena becomes independent]. Eleftherotypia. Retrieved 1 November 2011.
  21. ↑ "Το ΠΑΣΟΚ είναι πλέον άδειο σακί" [PASOK is now an empty sack]. Eleftherotypia. Retrieved 1 November 2011.
  22. ↑ 22.0 22.1 22.2 22.3 22.4 "Επίσπευση του δημοψηφίσματος αποφάσισε το υπουργικό" [Cabinet meetings decided to speed up referendum]. Skai TV. Retrieved 2 November 2011.
  23. ↑ "Λύσσαξε με τα "χρεωμένα ΜΜΕ", δίνει εξηγήσεις σε Ευρωπαίους και ΔΝΤ" [He went mad over the "bankrupt media", he is to give explanations to Europe and the IMF]. Eleftherotypia. Retrieved 2 November 2011.
  24. ↑ "Επιμένει ο Πρωθυπουργός στο δημοψήφισμα - επιφυλάξεις υπουργών" [Prime Minister set on referendum - ministers express concerns]. To Vima. Retrieved 2 November 2011.
  25. ↑ http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_04/11/2011_413373
  26. ↑ 26.0 26.1 "Greece Crisis: Asian shares rally over 3% on hopes Greece will drop referendum - The Economic Times". The Times Of India. 4 November 2011.
  27. ↑ "Greek PM Tells Sky News He Has Scrapped Referendum: Watch Sky Coverage Of Euro Crisis Live" [Greek PM Tells Sky News He Has Scrapped Referendum: Watch Sky Coverage Of Euro Crisis Live]. Sky News. Retrieved 3 November 2011.
  28. ↑ "Greek PM Papandreou 'ready to drop' bailout referendum". BBC News. 3 November 2011.
  29. ↑ http://english.aljazeera.net/news/europe/2011/11/201111310743878884.html
  30. ↑ http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_4080_03/11/2011_412992
  31. ↑ http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_05/11/2011_413386
  32. ↑ 32.0 32.1 "Όχι» Ευάγγελου Βενιζέλου στο δημοψήφισμα" ["No" by Evangelos Venizelos on the referendum]. Skai TV. Retrieved 3 November 2011.
  33. ↑ "Εύα Καϊλή: Δεν θα παράσχω ψήφο εμπιστοσύνης" [Eva Kaili: I will not give a vote of confidence]. Skai TV. Retrieved 3 November 2011.
  34. ↑ "Υπό κατάρρευση η Κυβέρνηση - Ραγδαίες εξελίξεις" [Government collapsing - Rapid developments]. Skai TV. Retrieved 3 November 2011.
  35. ↑ 35.0 35.1 "Δ. Λιντζέρης: Ο κ. Παπανδρέου συνιστά παρελθόν" [Dimitris Lintzeris: Mr. Papandreou is now past]. Skai TV. Retrieved 3 November 2011.
  36. ↑ 36.0 36.1 36.2 http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_05/11/2011_413394
  37. ↑ 37.0 37.1 37.2 37.3 http://english.aljazeera.net/news/europe/2011/11/201111591628572478.html
  38. ↑ 38.0 38.1 http://english.aljazeera.net/news/europe/2011/11/2011114212835975841.html
  39. ↑ "Greek PM Papandreou faces unity challenge over bailout". BBC News. 5 November 2011.
  40. ↑ 40.0 40.1 "3rd UPDATE: Greek PM Begins Efforts To Form Coalition Government". The Wall Street Journal. 5 November 2011.
  41. ↑ http://english.aljazeera.net/news/europe/2011/11/201111613435173466.html
  42. ↑ "Greek PM to step down for new government". CBS News.
  43. ↑ "Greeks in deal on new government in bid to save bailout, euro". Los Angeles Times.
  44. ↑ http://english.aljazeera.net/news/europe/2011/11/2011116203756981236.html
  45. ↑ Smith, Helena (7 November 2011). "Lucas Papademos emerges as frontrunner to be new Greek PM". The Guardian (London).
  46. ↑ 46.0 46.1 http://english.aljazeera.net/news/europe/2011/11/201111895652345832.html
  47. ↑ "Τηλεφωνική συνομιλία Παπανδρέου με Μπαρόζο - Ρομπέι - Μέρκελ" [Papandreou telephone conversation with Barroso - Rompuy - Merkel]. Skai TV. Retrieved 1 November 2011.
  48. ↑ "Ζ. Ντόλ: Στα όρια της παραβίασης της συνθήκης της ΕΕ η Ελλάδα" [J. Daul: Greece on the verge of violating the EU Treaty]. Skai TV. Retrieved 2 November 2011.
  49. ↑ "Greek euro threat looms over Cannes G20 summit". Reuters. 3 November 2011. Retrieved 3 November 2011.
  50. ↑ "G20 Cannes Summit heats up early on Greek debt issue". Xinhuanet. 3 November 2011. Retrieved 3 November 2011.
  51. ↑ Elliott, Larry (1 November 2011). "G20 meeting: eurozone debt crisis takes centre stage". London: The Guardian. Retrieved 3 November 2011.
  52. ↑ "Κ. Λαγκάρντ: Μετά το δημοψήφισμα θα συζητηθεί η 6η δόση" [C. Lagarde: Discussions on the 6th installment will take place after the referendudm]. Skai TV. Retrieved 3 November 2011.
  53. ↑ "Carney commends Greek referendum, touts stability in Canada". Global News. Retrieved 1 November 2011.
  54. ↑ "Sarkozy consterné par l'annonce de référendum en Grèce" [Sarkozy appalled by the announcement of a referendum in Greece]. Le Monde. Retrieved 31 October 2011.
  55. ↑ "Handelsblatt: "Η χρεοκοπία πλησιάζει"" [Handelsblatt: "Bankruptcy is nearing"]. Skai TV. Retrieved 31 October 2011.
  56. ↑ Emsden, Christopher (1 November 2011). "Berlusconi: Referendum Call Hurting Markets". Wall Street Journal. Retrieved 1 November 2011.
  57. ↑ Thomas Penny (1 November 2011). "Osborne Says Greek Referendum Decision Has Added to Instability". Bloomberg. Retrieved 2 November 2011.
  58. ↑ "Press Briefing by Press Secretary Jay Carney". White House. 1 November 2011. Retrieved 2 November 2011.