Open Europe On The Greek Referendum: Is Democracy Finally Coming Home?

Tyler Durden's picture

Euroskeptic think thank Open Europe once again appears on the scene with one of the first more extended reactions to what the possibility of a Greek referendum, which according to the Guardian will take place in January, means for Greece, the Eurozone, and the latest bailout (which according to Williem Buiter, who reiterates to the FT something we said 2 months ago, needs to be €3 trillion). One thing we would like to point out is that if indeed the popular vote on the future of Europe will take place in January, then kiss the year end rally goodbye as the uncertainty around the market will be insurmountable by anything the bureaucrats can throw at the concern that Europe is on fast-track to political suicide.

From Open Europe

Democracy Is Coming Home...

Interesting developments coming out of Greece this evening, as Greek Prime Minister George Papandreou has called a referendum on the latest Greek bailout and austerity package. Speaking to the Greek parliament he said:

“The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted…We trust citizens, we believe in their judgment, we believe in their decision."

It’s not yet clear exactly what will be voted on, but we imagine it will have to include the entire second bailout package, including the 50% write down for Greek bondholders, as well as the austerity and fiscal conditions attached to the latest package. So a lot of important factors for the future of Greece in there. As if that wasn’t enough, it will be tied to a vote of confidence on the current Greek government.

So which way will it go?

Well, it’s tough to say off the bat. A recent poll showed that 59% of Greeks think the new package is “negative” or “probably negative” for Greece, and there’s been no hiding their displeasure with the austerity measure and economic collapse. As such, there wouldn’t be too many Greeks who would be sad to see the back of Papandreou.

On the other hand, they may be keen to see Greek bondholders take some losses finally and endure some pain (although given the Greek bank and pension fund exposure to Greek sovereign debt this could end up costing Greek taxpayers again in the end). The same poll also found that 72.5% of Greeks want to stay in the eurozone.

Clearly, there are some conflicting feelings. Have no doubt that if Greece votes down the latest package it could be bad for Greece and the eurozone. It would leave Greece with almost no funding and no government – pushing the country very quickly towards a disorderly default and disorderly exit of the eurozone. That would be painful for both the eurozone and, especially Greece, have no doubt, the financial market turmoil and unknown knock-on effects would send the whole of Europe (including the UK) into a spiral of uncertainty.

This could be big turning point in this crisis. The EU should move quickly to come up with plans to mitigate the fallout of a no vote, specifically how to handle a rudderless and broke Greece, which would probably include plans for allowing it to exit the euro. A yes vote would be far from a solution, at best it would buy some time for the Greek government and the EU to enforce some necessary reforms thanks to a fresh mandate.

As with any referendum it may come down to the phrasing of the question. Let’s hope the Greek government and the EU do a better job of communicating the issues at hand than they have done so far in this crisis.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
doomandbloom's picture

G- Pap wont survive the confidence vote....

Nothing to see here...pls move along

EL INDIO's picture

If he is serious about this referendum and if it leads to Greece openly defaulting and leaving the Euro I would have to say bravo to G-P.

He extracted as much money as he could before saying good buy.

Is he that good ?

DeadFred's picture

I scratch my head trying to figure out his motivation. He didn't have to do this, the deal could have gone through on the votes of bribed politicians. Is he high on something or is there some Byzantine deal being struck? It's not likely he's trying to actually do right by his countrymen. Go figure.

Edit: My best guess is this shows that Goldman and JPM now have enough coverage to profit from a market rout. There, figured it out!

i-dog's picture

"My best guess is this shows that Goldman and JPM now have enough coverage to profit from a market rout. There, figured it out!"

You're probably right.

Open Europe is a 'controlled opposition' front for the NWO. The chairman is "a director of Rothschild Continuation AG and various listed Jardine Matheson Group companies". One of its main supporters bought a life peerage from David Cameron by supporting him for leadership of the Conservative Party. Another of its main supporters is "the chief executive of ICAP plc, the world's largest interdealer broker, and is also currently the owner of spread betting firm City Index".

Ghordius's picture

i-dog, two questions:


my dear friend since 30 years came for dinner and I *tried* to expose his dastard organisation according to your words - no avail. do you have additional material about the Order of St John? How they use their hospitals and first aid volunteer groups to take over the world? ;-)

where is the referendum in the UK going? we had some rumors that Mr. Cameron's backbenchers were clamoring for a ref to get out of the EU. Any progress? ;-) ;-)


IMO a referendum in Greece would be a good thing - if getting out of the EZ is what they want nobody should complain. Alternatively, if they do want to stay any decent restructuring of their budget would have a popular support.

Rynak's picture

You've run through a lot of possibilities. None of them involved the current mood of the population.

If that referendum is actually put through in a way, in which the population can actually say "No"..... then what will have happened will simply be, that he extracted as much as he could, and then defected just short before he'd be politically and socially overwhelmned.

Unfortunatelly, the story won't be over for greece after that.... it may be all nice being out of the rigged EMU-game, but left will still be a country adapted to the junkie-role.... and a country that will NOT get affordable credit in the nearterm future. Greece will have to be rapidly restructured and reformed on all fronts. And even though that at least has a chance of having a future - as opposed to the EMU - it still will be hard.

fajensen's picture

The majority of business in Greece is done off the books; they will just go 100% off-balance-sheet - like the banksters - and carry right on without a bailout - unlike the banksters. Credit makes you visible. Not good while running a cash-business. 

SPADOC4's picture

I scratch my head trying to figure out his motivation.

The word, "blackmail" come to my mind. He upped the ante big time. I'm sure a few on the EU council need to change their underwear after this hit the wire.

He's going to either a)cut a deal for a really nice golden parachute or b) rape the EU stability fund for gazillions. Either way, he's going to separate the men from the boys on how bad they want the EU to stay together/nonrevolutionary.

But then again, this could all be part of the momo crowd getting a few coins for the holidays/end of year bonus.

It's all ponzi

CrashisOptimistic's picture

No, this is not personal.  This is party politics.

His party can't hold the line for another vote.  They fear for their lives. 

He wants a referendum because the party needs something to hide behind.

malikai's picture

At some point the riots, general strikes, etc, turns to pitchforks in your front yard.

earleflorida's picture

this shit's getting serious folks,... let us hope and pray, there's no, "Ferdinand Event" (6/28/1914) ?

Blank Reg's picture

Exactly! If he gets a 'yes' vote, then when his people complain, he can say "Hey don't bitch at me, YOU voted for it." I think he's banking on people finally looking at the numbers for a change and deciding this is in their best interest. The problem with that: Never over estimate the intellegence of the common man. You'll get burnt every time.

Coke and Hookers's picture

If the Brussels moguls, Merkel and the French midget don't totally freak out, it's some sort of a deal. If they freak out and threaten G-Pap, it may be real.

Newsboy's picture

Maybe he wants to die of old age, and sees the way all this is going.

A referendum makes him blameless. Blameless is important when the social fabric is rent asunder.

philipat's picture

That would be the perfect ending. The Greeks tell the Germans to fuck off for their generosity. Maybe we can even start to get rid of crony capitalism and return to free markets. Let the PIIGS take responsibility for their own self-created problems and let the French Banks fail, together with their Shareholders, Bondholders, Boards and Managements. Then we can get back to some semblance of reality.

Pap-smear and his family created most of the problems and institutionalised profligacy so I do hope he doesn't resign before Greeks vote against the bailout. Then, welcome to reality Greeks, there's no such thing as a free lunch.

Sudden Debt's picture

I give it 99% he'll get out of it and the austerity is there to stay.
Forget democracy.
Forget normal.
They'll just fix the outcome and brainwash them through TV.

theXman's picture

>> "Clearly, there are some conflicting feelings."

I'd say there are no conflicting feelings here because hating austerity and wanting to stay in the Euro zone are the same thing -- having a good life beyond their means. 

fonestar's picture

I've been paid to do my thing, so now that it's done I'll pretend I am some sort of democrat so my people won't lynch me.

0cz's picture

"Greek Referendum" is just newspeak for "Opps we ran out of ink, BRB".

mynhair's picture

Let the morons' vote for their own demise!


Look, I got one!

FinalCollapse's picture

59% doesn't like the bailout/austerity package, but 72% wants to stay in EZ. Something has to give here. I wonder what Greeks will decide. They are cut off from the open credit markets for long time.

edotabin's picture

This is classic Greek mentality.  They always look for intermediate "fixes" for problems. The rest of Europe has to be careful about this one. They usually wind up dragging things downward with this mentality.

Kinda like the brother who never holds a steady job, complains about his bosses and how they make him quit and then hits you up for money while rekindling fond childhood memories.

M.B. Drapier's picture

Greece is perfectly entitled to default while remaining a member in good standing of the EZ. The fact that so many wish to suggest otherwise tells you what's really going on.

Ghordius's picture


sadly this referendum will probably put the question in a different way

Ecoman11's picture

This is when they post violent films and commercials on local TV to provoke a YES bailout vote.

stopcpdotcom's picture

Have they got enough ink with which to print the voting forms?

knukles's picture

They'll just use the runny mascara of the mothers watching their children starve.

Belarus's picture

Just to play contrarian ZH, the market loved all the uncertainty leading up to the Summit non-event, and the market bought every single FT rumor.

So I don't think this vote looming will have much affect; however the Italian and Spanish bond creep, their sagging economies, the myriad of lawsuits and distrust over CDS now along with no faith in buying said debt now, and banks starting to feel the hurt again, now that might just have an effect on the markets....

And what happens when it is announced there's not going to be an LSAP on Wed? 


0cz's picture

This is a different type of uncertainty though.  The previous uncertainty was over whether or not a move will be made today or tomorrow.  This uncertainty is the uncertainty of what will happen now that a move is confirmed not to happen until Jan.

Belarus's picture

Not a lot was happening until the end of January anyway, the time a which the 50% haircut and exchange was going to take place. The banks have until summer to get their captial up to regulations. It was supposed to be just some of the granular stuff until then....

Of course, if Greece is voting on this in January....time itself becomes a ticking time bomb as Europe is slowly drifting off into the Atantic.


GiantVampireSquid vs OWS UFC 2012's picture

The uncertainty over CDS only applies to small enough to fails.  Rest assured the squid and co. carry no risk on the ISDA contracts, they have written their own.  The squid sells ISDA insurance, and buys insurance with special contracts from the small enough to fails.  

Segestan's picture

When all the other gigs fail.....Involk democracy in order to ensure compliance. Hey, how can Greeks complain after they themselves cut the cord.. right?

DeadFred's picture

I wonder if they use electronic voting it Greece...

Thucydides's picture

“When will there be justice in Athens? There will be justice in Athens when those who are not injured are as outraged as those who are.”
? Thucydides

taraxias's picture

G. Papa is a POS banker owned mole that's just buying time for his gov't, the eurocrats and his owner bankers. The situation within PASOK right now is so explosive (members and ministers can no longer safely walk the streets) that G. Papa came up with this scheme to prevent his gov't from collapsing and the EZ and its banks going down with it.

Nothing to see here, just more theater by a traitor to the Greek people.

Peter Pan's picture

Papandreou is only washing his one hand of the situation by proposing a referendum. The other hand he is using to hod on to power for as long as it takes to suck Greece and Greeks dry. His first wife was probably right when she said that he was an avowed atheist who was a psychopathic egocentrist. Then again so many leaders fit that bill today.

earleflorida's picture

who me? that was just a misquote,... what i meant to say was - 

oh, the hell with it, i'll let the guardian or financial times spin it tommorrow -

they know what i meant 

Rainman's picture

The average Greek will survive this just fine....not a good time to be a made guy in High Command, though

Long-John-Silver's picture

The coming haircut will be shaved heads as the bond holders and everyone else lose everything.



DutchR's picture

We held a referendum once or twice....


We said NO and look what happened.


This is just for show, scapegoating, kabuki.

tempo's picture

The biggest risk is that Greece votes as an independent State not to pay any EU bond debt held both by Greece and international banks and pension funds. Then all Greek pension/investors/banks holding EU bonds would be paid in local currency. This is the biggest threat to globalization.   Short of invading Greece, the international community would be screwed.  Greece can pass any law they wish and it can not be overturned.

Coke and Hookers's picture

Exactly right. The Brussels globalists are in a major bind. The Euro must be saved to maintain the momentum of globalization but doing so might cause a bigger problem; a total breakup of the EU. The solution of course is 'more Europe' - a superstate, but that seems to be a hard sell at the moment. It's not a good time to be a Euro globalist. Any outcome except the total abolishment of the nation state is an end to the globalist Euro dream. Even small fish like Greece leaving the Euro is a potential death sentence. This was the reason everybody in Brussels freaked out when Iceland refused to pay bank debt with taxpayer money. Even a small fish can serve as a dangerous example.

It's funny to see how many 'experts' think a superstate with centralized financial authority (taxing and spending) will solve the problem. If you remove the flexibility local currencies provide, you will simply move it to the job market. If Europe is merged financially, giant swaths of Europe will turn into semi-deserted slums (like parts of America are turning into) as people move to better pastures. It will cause the biggest movement of people on the continent since the migration period. It will wreck entire nations.


malikai's picture

Control the options.


He who counts the votes..

SwingForce's picture

Are you fucking kidding me? Turn this show off. They are playing us as assholes.

Missiondweller's picture

And how the hell do they print ballots when they cannot even print tax forms???

Peter Pan's picture

There is little doubt that the marketing machine will go into overdrive to scare the people into voting in favour of the package etc to date. Visions of chaos following exit from the Euro will be tied to the fate of the government. Clever plan but the result will not change Greece's destiny.

Use of Weapons's picture

It might be coming home, in the Iron Cross type of way:



i.e. It might return to find a burned out carcass of a country where democracy was started, but resetting this bitch into something functional isn't as simple as you'd think.

XRAYD's picture

It's simple. The world has been playing monopoly, and the Chinese own everything now ... including the banks!

Next roll of the dice please ...


All bankers and politicians who shelter them: Go directly to Jail. Do NOT collect $200.



blueRidgeBoy's picture

2 more months to buy cheap gold