First of all I do not believe that Papandreou calling a Greek referendum was a suprise to the people closest to the debt crisis. Below I have detailed some of the main reasons for the apparent surprise announcement.
Why Papandreou Called For Referendum- Reason 1
Popular opnion in Greece is that the Papanderou regime is completely out of touch with the interests of the people it is swron to represent.
By calling a referendum Papandreou is trying to show that his decsions have validity and are legitimate both to Greeks as well as to people throughout the world.
For this reason I can see the question put to the people being something like blackmail. To try and elimiante a no vote in the referendum you can bet that the question will be extreme and will put Greeks in the position of commiting economic suicide if they were to vote no.
I say suicide, as I believe that is how it will be portrayed by the PASOK regime and the international media, I do not believe it would be anywhere near as bad as the PASOK regime and international media claim
A “suicide” no vote would serve two purposes for the international banks and Papandreou. It would let the banking cartel spin it into a situation where the Greeks are so incompetent and/or pig headed they do not deserve to be in charge of their own finances.
It will also lead to a default, which would further damage the Greek economy and further devalue Greek assets for international investors
Why Papandreou Called For Referendum – Reason 2
Merkel has been the biggest advocate and possibly the only voice in the Troika calling for the private banks to take a bigger hit on the Greek bailout
The referendum move could be a way of forcing Merkel to stop making demands for a bigger private sector haircut and to force Germany to hand over the next bail out instalment without anything certain on the table.
It is possible that Sarkozy and the rest of the international banking cartel are fed up with Merkel’s continued resistance; the referendum move is equivalent to a suicide bomber. The banking cartel is saying to Merkel, give Greece the next bail out tranche or we will blow up the Greek economy and possibly the Euro area as a whole.
The referendum will take at least a month to organise and Greece will run out of money in the middle in November. The bailout tranche is due in November. The showdown at the OK Coral.
Who will fold first, will Germany let Greece default or will Germany pay the next tranche when though no conditions are tied to the tranche.
Could this be simply bullying tactics by the international banking cartel and if Merkel does not pay the next tranche she will be vilified by the international media for sending the Greeks into bankruptcy just because they have taken the democratic option. It will also probably be spun into a story of this being Merkel’s way to punish the Greeks which of course she is not
Of course the term “Greek government will run out of money” if the next tranche is paid is not correct.
If Greece does not get the next bail out tranche the Greek government will not run out of money it will simply be 2 billion Euros short to meet it’s obligations, it will still be taking in around 10 billion Euros a month in taxes so the Greek government will not “shut down”, it will simply have to cut back, immediately which is no bad thing.
The question is how spiteful will the PASOK regime be should a default happen. The most spiteful action they could do would be not to put pensions and sickness benefit at the top of the priority list. If Greece does default it will be interesting to see how the PASOK regime deals with it
Why Papandreou Called For Referendum – Reason 3
Greeks feel right or wrongly that the austerity plan is tantamount to Greece giving up its sovereignty to foreigners. By calling an alleged surprise referendum it is an attempt by the PASOK regime to show that the austerity plan is in the hands of the Greek government and the Greek people.
Given that Papandreou and the PASOK regime have spent the best parts of 3 years telling the Greek people that the austerity measures were out of their control this attempted declaration of independence by Papandreou will probably not carry any water with the Greek people.
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