On 31 October Greek Prime Minister George Papandreou announced plans for a referendum on the deal decided by eurozone leaders on 26 October which further “bails out” Greece (in fact, bails out the international banks which have lent to Greece, and demands destructive cuts in Greece).
His decision followed a wave of strikes and mass protests which disrupted Greece’s official celebrations of a national anniversary on 28 October.
Papandreou’s gamble succeeded in one thing: embarrassing the opposition parties. Although they had voted against the deal in Greece’s parliament, the opposition parties expressed outrage at the referendum.
If Papandreou wins the referendum, then his government regains some political grip. If he loses, then the opposition parties (in the first place, New Democracy, Greece’s Tory party) will be faced with taking over, after an election or as part of a new coalition based on the current parliament.
Unlike Ireland’s opposition parties, who insisted that the EU deal for Ireland be finalised before the country’s general election, so that they could subsequently say they had no choice but to implement it, the Greek opposition parties will have to try to renegotiate the deal — with an annoyed and reluctant eurozone leadership.
The deal should be voted down, or — if the referendum is blocked, which it may be by Papandreou losing his parliamentary authority — defeated by action in the workplaces and on the streets.
The deal is not working in its own terms anyway. Even before Papandreou’s announcement, the interest rate which the global markets are demanding on 10-year IOUs (bonds) from the Italian government had risen to 6.18%. The similar rate for German bonds is 2.19%. The Italian rate is unsustainable.
Labour movements across Europe should unite to demand, as an emergency measure, the expropriation of European high finance, and its conversion into a Europe-wide banking, mortgage and pension service, under social and democratic control.
Greece’s debt should be cancelled, and a new beginning made. Social minima and workers’ rights should be levelled up across the continent.