Less than a week ago I wrote that the solution to the latest Eurozone crisis might well last no more than 2 or 3 weeks, but I didn't reckon on the Greek Prime Minister throwing all the balls into the air with his announcement that the deal reached last week would be put to a referendum of the Greek people.
The Greek people are not a happy bunch, despite the fact that they've been enjoying a lifestyle in recent years that's way beyond their ability to pay for it and that a substantial part of the cost of putting things right was now going to be picked up by other European Union member countries. For some reason, the Greeks think that it's all very unfair for them to have to be 'put upon' in this way and the initial reaction to Mr Papandreou's statement is to expect them to vote the Greek equivalent of 'Up Yours', when it comes to the referendum in December or January.
Why Mr Papandreou has, effectively, reneged on the agreement reached last week is anyone's guess. His announcement certainly seems to have come as a complete surprise to all and sundry and stock markets have nose-dived as a result. Is he playing a game designed to screw a few extra drachmas out of Brussels ? Is he simply trying to save his own political skin ahead of a confidence vote due on Friday ? Whatever the reasoning, the view of most pundits seems to be that he may well lose Friday's vote, thus precipitating a general election. The announcement of a referendum on the proposed solution to the Greek debt crisis, while unsettling to say the least, is probably no more so than would be the collapse of the Greek government and so Papandreou really had very little to lose, but quite a lot to gain, at least in the short term.
What will happen next is in the lap of the Gods, almost literally so in the case of Greece, the home of Mount Olympus. Will Papandreou survive ? If he does, which way will the Greek people vote in the referendum ? If he doesn't, will there be a referendum at all ? Should the people vote against the proposed deal, it seems quite likely that Greece will then have to leave the Eurozone, possibly to be followed by others such as Ireland, Portugal, Spain and Italy. If they vote for the deal, or don't get the chance to vote, the Eurozone will likely hold together for a few more months, until the next crisis, unless the fall-out from the current meleé proves too much for Italy to withstand, as already seems a possibility.
What fun times these are.
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