Euro saved for now - to collapse another day

Greek PM scraps plan for referendum

RT

3 November, 2011

Greek Prime Minister George Papandreou has scrapped his plan for a referendum on the EU bailout package. Earlier he denied rumors of his possible resignation.

During his speech in parliament on Thursday he warned that early elections would be “catastrophic”, entailing a high risk of bankruptcy and even lead to an exit from the euro.

The confidence vote for the government is expected on Friday.

He also invited the opposition join the debt-deal negotiations.

“If the opposition is willing to negotiate, we could ratify the eurozone bailout deal”, he is quoted as saying by AP.

The Greek finance minister, Evangelos Venizelos, also confirmed that the country will not be holding a referendum.

Papandreou came under growing pressure to resign after calling a referendum. His finance minister, Evangelos Venizelos, declared on Thursday he was against that move. At first he supported Papandreou’s decision, but changed his mind after his and the PM’s meeting with French President Nicolas Sarkozy and German Chancellor Angela Merkel. On the eve of the G20 emergency talks on Wednesday, the top Greek officials were summoned by the eurozone’s two most-powerful politicians as well as the IMF and ECB. The message they wanted to deliver was that his country needs to play by EU rules or leave the eurozone.

Earlier, some parties who dislike the idea of a referendum demanded that a coalition government be formed. That idea came from several deputies of the country’s ruling PASOK socialist party. Similar claims came from conservative Opposition Leader Antonis Samaras. He insists on the formation of a transition government and the immediate ratification by parliament of the new eurozone debt agreement.

The referendum in Greece over the 130-billion-euro bailout program to relieve the country’s finances sparked concern across the eurozone that banks will not restructure the Greek debt until the results of the ballot emerge. This has sent the eurozone into weeks of financial uncertainty, with markets deflating.

Welcome to the New World Order.

A show of brute force in the new Europe

The move towards full fiscal union is now considered the euro's only way forward.

the Telegraph,

3 November, 2011

It should surprise no one that George Papandreou’s proposal for a national referendum on the latest European bail-out deal should have lasted just 72 hours before being bulldozed into oblivion by the Germans and French. Angela Merkel and Nicolas Sarkozy made not the slightest attempt to observe any diplomatic niceties as they turned their fire on this troublesome outbreak of democracy. The Greek referendum must not be allowed to happen, they insisted – and lo, it will not. It was brutal to watch.

Welcome to the new Europe. It is now generally accepted that the move towards fiscal as well as monetary union is the only feasible way in which the single currency can be made to work. Yet it will mean such bullying becomes the norm, since national sovereignty will routinely have to play second fiddle to the diktats not only of the European Central Bank, but also of a central European Treasury, whose creation can now only be a matter of time. Both will, of course, be dominated by the monetary union’s pre-eminent economy, Germany.

While Greece may be a victim of force majeure, it is not blameless in this affair – quite the opposite. An economic basket case in which political corruption is rife, it has failed to meet its obligations as a member of the monetary union by living laughably beyond its means. But what of Germany? Has it met its own obligations? It continues to insist on the single currency, and the European Central Bank that services it, being run to suit its own economic agenda, not that of the wider eurozone. This is where all the high-flown verbiage about the great European project collides with the hard reality of power. Germany is able to assert its sovereign rights because it has the economic clout to do so. Peripheral nations such as Greece and Ireland are swatted aside. Transfixed as they are by their obsession with shoring up the euro, it does not seem to occur to Europe’s political elites that the seeds are being sown not of an ever-closer union of equals, but of an unhappy alliance with one dominant partner. This could bode ill for the entire European Union.

Meanwhile, the immediate crisis has now reached such a pitch that the International Monetary Fund will have to play a significant role in any recovery plan. David Cameron is right to argue that, while this country will not back any direct IMF investment in a eurozone bail-out, it stands ready – as a founder member of the fund – to make more money available if required. This unholy mess is of the eurozone’s own making, and it ought to be up to its members to sort it out. But in the face of this disaster, every nation could find itself dragged into the abyss.