The question is: did he really have any other option? In need of wide national support and with Greece diving on social convulsions this is an obvious call. The markets don’t like, the European leaders don’t like (and feel betrayed; Merkel just needs a motive to kick Greece out of the eurozone so extra caution is needed), the opposition don’t like and want elections (?). Despite the obvious danger of reproval and its implications, here are 3 reasons why I believe Mr Papandreou’s call for referendum on next aid package can turn to be a smart move:
1. Effectiveness: increasingly centralized decisions with increased delegation of power from national populations to their central governments and European entities make such plans hard to implement, to relate with, to adopt and ultimately to produce the expected results. People feel the austerity to be exogenously imposed, to come from outside without regard for their real problems and challenges and for their daily reality. It smells like imperialism. Remember the 99%? People want to have the power to decide, people want to have the final voice. A more participative model is essencial in order to regain people’s confidence and ,far more importantly, people’s faith. An underrated feature of more inclusive models is responsability: once you’re part of the decision, you’re responsible for the results. If Greek politicians and the international community work together to convince the population about the necessity and the beneficial effects of the new aid plan they gain more than markets’ confidence: they win people over;
2. Fairness: moreover, centralized decisions tend to forget and do not take into account certain segments of population and the interests of all the involved parts (all the population affected by the austerity measures); in this sense, democracy turns out to be a matter of political justice instead of political (and economic) desirability. Central governments are not able to defend (or even to understand or collect information about) everyone’s interests. Since just part of the society is (directly or indirectly) represented in the negotiations, democracy stands out as the more effective way to achieve social justice;
3. Security: this is consequence of the two above; prevalent and still increasing social convulsions (they began in 2008, do you remember?) make Greece an awful place to make politics. Security is the greatest responsability of the State as well as the greatest necessity; you need to provide your citizens (and their belongings) with security and you need security to provide you with power and autonomy. Even investors, although apparently not really concerned about the two other reasons above (erroneously), understand this; if anarchy takes power they can lose both their money and their property (assuming they have some). Therefore, since security is the most essential good you can provide to your citizens, to your creditors and to yourself, calling a referendum is an obvious move before calling extra austerity measures. The reasons why I believe it should help are above.
And I’m personal about it.