Well, just as we were thinking that last week's EU meeting between the various heads of government was pretty well solved the issues, at least in the short term, guess who throws a hand grenade into the whole process.

The proposed referendum has gone down pretty badly, to put it mildly, in the markets. This was (as far as I'm aware) totally unexpected. Were any of the EU leaders told, even privately, by Papandreou, that this could happen? And what happens if (when?) the referendum is rejected? It's totally uncharted territory and since the referendum isn't supposed to take place until January, that's another two months of confusion and uncertainty that we can all do without?

So, what could happen? Is there any way that the Greek public can be persuaded to accept the proposals, or will it come down to a big bribe at the end of the day, by the EU? Or will it be a case of putting the frighteners on, e.g. "you think it's bad now; wait until you see what happens if you say "no"?

And if this does happen, what does it actually mean? Does the deal reached last week fall by the wayside? Can Greece get any more money from the EU in the meantime (and who will/would give it to them?)

Step forward economists and do your worst ... it may not be Hallowe'en night, but I think you can scare us rigid nonetheless!

Quoting kaitak (Thread starter): This was (as far as I'm aware) totally unexpected.

It appears not, but anyone in the know could have made a fortune shorting!

As you say, what next?

Greece leaving the Euro and defaulting (or the other way round). And then what. Arguably worse after leaving the Euro than before it. Cannot see why it would get much better. If they have a weak currency, they are also going to have inflation through the roof and anyone with savings will see them vanish, if they are not already in Switzerland or Luxembourg.

What a shambles and not just for Greece either.

This is just another one of Papandreou's bluffs. His previous was threatening to call the IMF if the EU did not fully support Greece. The EU's answer was "go ahead" so now we are here.

There is already a lot of opposition in Greece for the proposed referendum, goes to show that the average Greek is not all about running away from their obligations as it is being reported/commented around the world. I believe the referendum will never take place. Holding a referendum for fiscal matters is prohibited by the Greek constitution, although it is not the first time this government has managed to bypass it. Even if it goes ahead, I find it hard to believe that a NO vote will be the result. Who in their right minds would vote for no pay instead of low pay?

Papandreou once again shows how dangerous he is. I am glad that even MPs from his own party are starting to consider him being kicked out of the government. Had he wanted to truly "give the people the chance to decide", he should have done it when this crisis started, before accepting handouts and getting the country involved with the IMF. Now it is too late, especially after EU leaders spent weeks drafting an agreement. He has announced a referendum that will take place in January, while the situation requires immediate actions everyday. Who will wait until January? Why call a referendum on a deal that hasn't even been finalized? He is just asking the people who stand at the end of the cliff whether they want to jump or not.

It's over for Greece. I've seen this before, last week was their last shot and this move by the Greek PM was like working for days to stabilize a patient with traumatic injuries, somehow doing so, and then promptly going in the ER to beat the living daylight out of him.

If you notice, each "measure" has a shorter shelf-life of calming the markets than the last. Mainly because each further step is exponentially more painful. The point has come where there is no more. It's like a huge star that just burned through it's silicon core.

No matter what Greece or Europe say or do now, it's like fixing a broken jar that had miraculously been pieced back together from an earlier break.

Now it should be all hands on to pressure Italy, though I still don't understand why they are in so much hot water given that their budget deficit is on it's way to zero within three years, and their debt is far more internalized than Greece.

[Edited 2011-11-01 11:39:23]

I'm looking through my box of foreign currency and seeing if I have any Drachma's. They might come in handy in the near future.

Quoting Derico (Reply 3): I've seen this before, last week was their last shot and this move by the Greek PM was like working for days to stabilize a patient with traumatic injuries, somehow doing so, and then promptly going in the ER to beat the living daylight out of him.

Very well put; my thinking exactly.

It's just hard to think of the effect of a "no" vote and what it would actually mean. Perhaps we might see someone in the Greek government getting rid of Papandreou and cancelling the referendum. After all, it is hardly going to help anything? It would probably be very hard to put the referendum genie back in the bottle. If anything, this might spell the end of P. because it has all the marks of a desperate measure by a leader who has very few cards left to play.

Quoting kaitak (Reply 5): It's just hard to think of the effect of a "no" vote and what it would actually mean. Perhaps we might see someone in the Greek government getting rid of Papandreou and cancelling the referendum. After all, it is hardly going to help anything? It would probably be very hard to put the referendum genie back in the bottle. If anything, this might spell the end of P. because it has all the marks of a desperate measure by a leader who has very few cards left to play

I just found out about this so I was reading up on it, as Lewis said, the broad majority of the Greek political establishement is dismayed. Some are saying the PM may be sacked as early as tonight.

I'm just afraid it won't be enough for two reasons:

a) Even hinting a referendum shows (fairly or not) that there is no stomach in Greece for this, and how are they going to convince investors otherwise now...

b) The only possible (new) miracle would be a Unity Government, but that would mean elections and further uncertainty, and that was the issue to begin with, it wasn't even about Greece's economy anymore. So even if the rest of Greek politics has good intentions, I think they simply have run out of time.

Quoting kaitak (Reply 5): It would probably be very hard to put the referendum genie back in the bottle.

Not really. Article 44 of the Greek Constitution prohibits referenda on fiscal matters so it is just as simple as following the country's laws. It also needs 3/5ths of the Parliament to vote for a referendum which is not happening anytime soon. Papandreou can talk about it all he wants. We are used to him talk and talk but do nothing of substance, old news indeed.

Quoting lewis (Reply 7): Papandreou can talk about it all he wants. We are used to him talk and talk but do nothing of substance, old news indeed.

Then is he mentally unstable? Given what you are saying about law, add to that simple common sense, and that he didn't even tell his finance minister, that's the only other alternative.

[Edited 2011-11-01 12:13:12]

Quoting Derico (Reply 8): Then is he mentally unstable? Given what you are saying about law, add to that simple common sense, and that he didn't even tell his finance minister, that's the only other alternative.

I wouldn't take 'mental instability' off the table. Not only did he not tell his FM, he didn't even talk about it with his EU counterparts. After a call with Merkel today, he was summoned to the G20 meeting to explain to all of them the motives behind his decision. Sarkozy announced that he will hold talks with the "Greek authorities" in Cannes, so not necessarily soon-to-be-ex (from all indications) PM Papandreou.

What I am guessing is that he wants this referendum in order to be able to say:

-The result was 'YES' so stop demonstrating and accept everything that is coming.
or
-The result was 'NO', people have decided, we are defaulting and I am no longer the PM.

In the end, I don't see a real choice for the people, just a choice on whether "you want to live in poverty for the next 20 years under foreign control" or "default and have total uncertainty for the future, with poverty and chaos as the most possible outcome".

Either way, it looks like a win-win situation for him. Kind of like a modern Pontius Pilatus, trying to take the blame and responsibility off himself. He has taken catastrophic decisions for two years now and looking at a dead end decided to try and pass the responsibility for all those decisions to the people.

[Edited 2011-11-01 12:27:33]

Well for starters, we need to know exactly what the wording of the question will be. Second of all, the reason this referendum is happening is so the governing party does not look tarnished. Already many austerity measures are in place with more sure to come. With this referendum, the Socialists leave it all to the Greeks. If they support this, the Socialist have munitions: the Greeks supported further austerity measures. The government has a will to follow through with that mandate.

Of course, odds are that the referendum will likely end in a no if it's not withdrawn. If it is withdrawn or delayed, you can bet that the Socialist party will be finished.

And what will become of the euro? Is it finished? Is it irreparable? Is it still worth using? Will the currency union have to eject other members who are deemed risky (Italy, Portugal, Ireland, and Spain, with Slovenia and Cyprus on the list) while toughening up criteria for new members (those in the ERM2)?

My guess is that in order to avoid dropping the euro further down, the currency union will have to reform. These countries are set to take a huge hit. Let's just hope they don't bring the world economy down as well.

Quoting dxing (Reply 4): I'm looking through my box of foreign currency and seeing if I have any Drachma's. They might come in handy in the near future.

Odds are that those drachmas will be worthless anyway. Greece will have to devalue its currency so much that I can see a 25,000 drachma banknote going around. That 2004 Olympics commemorative 2 euro coin on the other hand...  

Quoting einsteinboricua (Reply 10): Of course, odds are that the referendum will likely end in a no if it's not withdrawn.

I would like to believe that, despite the current state of many Greeks, they will think rationally before going down the bankruptcy road. It may have been an option when it all started, now it is too late to do that.

Quoting einsteinboricua (Reply 10): Well for starters, we need to know exactly what the wording of the question will be

It will include exit from the Eurozone, maybe even the EU. But the wording cannot be simple enough for a referendum that will either accept or reject a loan contract that is over 100 pages long. This is why I think no referendum can and should take place in such a case.

Quoting einsteinboricua (Reply 10): 25,000 drachma banknote going around

Before the introduction of the EURO, the largest banknote was 10,000 Drachmas, so a 25,000 Drachma banknote is not that hard to imagine.

Quoting einsteinboricua (Reply 10): That 2004 Olympics commemorative 2 euro coin on the other hand...

You should save that along with the Greek Euros, if we get out of the EZ these will be nice historical pieces!

Quoting lewis (Reply 9): What I am guessing is that he wants this referendum in order to be able to say: -The result was 'YES' so stop demonstrating and accept everything that is coming. or -The result was 'NO', people have decided, we are defaulting and I am no longer the PM. In the end, I don't see a real choice for the people, just a choice on whether "you want to live in poverty for the next 20 years under foreign control" or "default and have total uncertainty for the future, with poverty and chaos as the most possible outcome".

That's pretty much the case. All the protesting in the streets, the strikes, will not put off the fact that Greece overspent, and it's time to pay the piper. It's gonna hurt, either way. 'Yes' means that it will hurt for a long time, but there will be order. A 'No' vote - God knows what's going to happen, but it will be ugly.

The presence of the Euro instead of the Drachma is an interesting factor. It will keep Greece from having a worthless currency like in other economic collapses (Russia, Argentina etc), but will the Euro drag the rest of Europe down more than it shores up Greece? Interesting dynamic.

And of course the big question is which countries will learn their lesson from greece?

Quoting Dreadnought (Reply 12): The presence of the Euro instead of the Drachma is an interesting factor.

From what I understand so far, if the referendum actually takes place and a "no" vote is the end result, it will be followed by a voluntary exit from the Eurozone.

Quoting lewis (Reply 11): Before the introduction of the EURO, the largest banknote was 10,000 Drachmas,

Oh the memories. I loved the 10K notes you really felt like you had money back then    

As for Greek Euro coins I have a mint condition and the special Olympic one also .  

Quoting lewis (Reply 9): -The result was 'YES' so stop demonstrating and accept everything that is coming.

I think thats what he is hoping but he is playing with fire. Who knows maybe we will all be proved wrong . It is funny though because people I speak to complain about the current issues but they are scared to vote leaving the Euro as they think it will be alot worse.

Quoting lewis (Reply 13): From what I understand so far, if the referendum actually takes place and a "no" vote is the end result, it will be followed by a voluntary exit from the Eurozone.

And more protests etc as the people who voted no realize that their pensions and benefits that they were fighting for are going to be inflated out of existence.

I was working in the Former Soviet Union from 1991 onwards, and saw that happen up close. It won't be pretty.

Quoting OA260 (Reply 14): I think thats what he is hoping but he is playing with fire. Who knows maybe we will all be proved wrong . It is funny though because people I speak to complain about the current issues but they are scared to vote leaving the Euro as they think it will be alot worse.

I don't think it will be a no vote if it ever comes to that. I heard stats being quoted like "60% of Greeks oppose new austerity measures". Well, duh, that is to be expected, nobody enjoys austerity but given a choice between some pay and no pay, I don't think many will choose the latter.

Quoting lewis (Reply 16): I don't think it will be a no vote if it ever comes to that. I heard stats being quoted like "60% of Greeks oppose new austerity measures". Well, duh, that is to be expected, nobody enjoys austerity but given a choice between some pay and no pay, I don't think many will choose the latter.

Indeed 60% dont want the measures but a recent report stated that the majority of Greeks wanted to keep the Euro so I guess it will be a YES vote depending on the question asked.

Despite debt troubles, Greeks want to keep the euro

ATHENS — To many Greeks, the euro means sky-high unemployment, ruinous debt and shuttered storefronts. Dwindling euro coins in Greek pockets now feel like a curse rather than a blessing. And being welded to the same currency as the rest of Europe is forcing the country to face painful cuts and austerity measures to stave off financial crisis.

But for all the trouble, a wide swath of Greeks wants to keep the euro, fearing that a return to the drachma would be far worse than anything they’ll endure as a member of the broader European club.

http://www.washingtonpost.com/world/...o/2011/09/28/gIQAWWE67K_story.html

Papandreou has tonight stated that a referendum would re inforce Greeces comittment to the Euro .

This referendum seems like a blinking contest between the Greek government and the Greek people as well as the Greek government and the so called Troika, EU, IMF etc.

Maybe the goal of Papandreou is to renegotiate the rescue package terms to include less or no foreign control on how Greece governs itself in the future.
Maybe it is to stop the demonstrations and strikes.

The problem is, in a country where people grow up hearing mottos such as "Freedom or death" or "Better to be free for 1 hour than a slave for 40 years" it is rather risky.

But at the moment the Greek people are between a rock and a hard place. I personally don't believe Greece can sustain the Euro. Greece has no manufacturing sector and tourism is the main income source. But with the Euro, the current taxation and the world economy down the drain, those who can afford to visit Greece are much fewer, while those who prefer to visit the much cheaper neighboring counties keep increasing. A return to the drachma could help fix this.

On the other hand, a return to the drachma and everything associated with such a change could mean that a few years down the line, Greece may not exist as we know it.

Quoting lewis (Reply 11): Quoting einsteinboricua (Reply 10): That 2004 Olympics commemorative 2 euro coin on the other hand... You should save that along with the Greek Euros, if we get out of the EZ these will be nice historical pieces!

You know, it's quite funny (I think I've mentioned this a couple of times already) but I remember back in 2005, I took a trip to Europe and collected all the euros I got my hands on. I was told I was crazy, but I knew back then that the EU would not be forever and that sooner or later the currency union could collapse. I never imagined that 5-6 years later, I'd be witnessing not the collapse (which is yet to be seen if Greece decides to exit the euro) but a crisis never seen before.

I'm looking to getting my hands on the Greek 1 and 2 euro coins (I'd like the smaller denominations, but it's the bigger ones that I like best).

I think this latest "effort" is just a vigorous reminder about the fat lady singing. When it's done, signed sealed and delivered and the pain has started then I'll believe that it is going to happen. I'm certainly not going to put any faith in a Greek Solution until it's completed.

What I'm looking at now is how the Euro is going to be hit - and if that is going to make things easier for their economy in general. The Euro is high (for the US Dollar exchange rate) and taking a bit of a hit may, long term, be a benefit.

There are a few things which puzzles me:

1. How can a PM make such a decision? If he was a Danish king 500 years ago, sure yes, but EU countries of 2011 are not supposed to have dictators.

2. If a referendum is scheduled, probably some time in January, what sort of money are going to be paid for civil servants salaries during the next two months? Zimbabwe dollars?

3. Are somebody (the PM?) so mentally screwed that they think that one cent more loan to Greece will be available before there is a settlement?

4. Greece has a major income from tourism. What sort of tourists do they expect in a period when even police isn't paid a salary?

5. How can a referendum be decided without giving one hint about what the government will do in case of a "no"?

To me it all seems so unprofessional, even childish.

Quoting lewis (Reply 9): In the end, I don't see a real choice for the people, just a choice on whether "you want to live in poverty for the next 20 years under foreign control" or "default and have total uncertainty for the future, with poverty and chaos as the most possible outcome".

I would hope not. Though in another thread a German member made a good point on the effect of Greece devaluing vs Argentina: Argentina had industries (steel, car manufacturing, hydro, nuclear know-how), and can produce food for almost 500 million people, over 10 times it's population. So when the currency was floated, it's not like we depended on foreign food or cars imports. After the fist three months of 2002 (February, March, April), of chaos in prices, things began resettling in may of that year.

Greece doesn't have that luxury, apparently. So a sudden devaluation would be more painful in it's immediate wake because the country cannot readily substitute imports of food or manufacturing with local production within a month or two. Tourism would have to come in a hurry to bring hard currency to the system.

Quoting kaitak (Thread starter): The proposed referendum has gone down pretty badly, to put it mildly, in the markets.

Pretty badly? It's been a freaking bloodbath out there!

Quoting kaitak (Thread starter): This was (as far as I'm aware) totally unexpected. Were any of the EU leaders told, even privately, by Papandreou, that this could happen? And what happens if (when?) the referendum is rejected? It's totally uncharted territory and since the referendum isn't supposed to take place until January, that's another two months of confusion and uncertainty that we can all do without?

This is either a brilliant political bluff or the most stupid decision since Groupon decided not to sell to Google for $6 billion. As Prime Minister Papandreou will no doubt soon find out, the difference between bravery and stupidity is only the outcome.

Quoting Derico (Reply 22): After the fist three months of 2002 (February, March, April), of chaos in prices, things began resettling in may of that year.

Yes, but Argentina has suffered from persistent high inflation ever since (which has almost completely eroded the value of the savings of those wise enough to make them) and is still, to this day, barred from international credit markets (some Argentinean municipalities can finance themselves, though, at 14+%). Defaulting is not something without consequences (nor should it be), despite what many people in Europe seem to believe.

Quoting Derico (Reply 22): and can produce food for almost 500 million people, over 10 times it's population.

Yes, but never underestimate the destructive power of Argentinean populist politicians to mess up with even that.

http://en.mercopress.com/2009/05/13/...e-to-import-beef-and-wheat-in-2010

The euro has become so predictable these days, it's a wonder I haven't invested in it. Yesterday it took a drop of over 1 cent (nearly 2?) against the US dollar. Today, it's up nearly one cent again. Every week a drop only to slowly climb back up.

Quoting einsteinboricua (Reply 24): The euro has become so predictable these days

The euro is still a rock-solid reserve currency, easily holding its extremely high value against the dollar and it shoudn't come as a big surprise really: for all the media attention that goes to the almost daily soap on the fiscal dramas in Greek politics, it should be well understood that Greece represents only about 2% of the GDP of the Eurozone: the whole of Greece is basically as important to the Eurozone as the town of Munich or Milan, hence the euro always recovering in the swiftest possible time.

Too many people confuse a sovereign debt crisis in an economically very weak European country like Greece, with a crisis of the euro as a single currency itself: the euro in not in a crisis at all, it's standing just as strong as ever and the ECB is taking care of that very well indeed, because the ECB stands firm (maybe too firm even) and does not provide any addtitonal liquidities to the markets (i.e. they don't print more money) like the FED or the BoE constantly do to ease financial crises...
.

So did I get this right, the Greek constitution does not allow a referendum on fiscal matters and the Greek parliament must decide a referendum with a 3/5 th majority vote?

If that is the case it is safe to say that there will be no referendum? If that is so, the PM can say - OK, I have tried to get a popular vote on this but now we have to accept the rescue plan. IMHO the easier way would have been to clarify that and go the short cut, take the 100 Billion € in debt reduction and whatever else was drafted during that Brussels night session where Sarko mixed up $$$ and €€€.. I also wish that the Greelk people stop striking and look forward and see how they pull their a.. out of this mess.

Quoting slz396 (Reply 25): Too many people confuse a sovereign debt crisis in an economically very weak European country like Greece, with a crisis of the euro as a single currency itself: the euro in not in a crisis at all

you are right and not. Markets are volatile and money is as shy as a deer. What could happen here is that we get a "north" € and a "south" € . The mistakes have been made a long time ago, it was a mistake in first place to take greece into the € with faked balance sheets and it was a mistake to let them stay in the € last year.

Quoting Pyrex (Reply 23): Yes, but Argentina has suffered from persistent high inflation ever since (which has almost completely eroded the value of the savings of those wise enough to make them)

You are not correct actually. After the first inflation burst of 70% in early 2002 based on the devaluation itself, inflation dropped dramatically to single digits and stayed low for about 3 years, as the economy grew based on the huge slackin all industries, which as they started to recover production could keep prices down because they were simply reactivating idle capacity.
It was only starting in 2006 that inflation crept and became an issue in 2007 and 2008.

But those three years after 2002 are important in this discussion, as the slack capacity existing in the country allowed to reactivate the economy to some extent from within.

Quoting Pyrex (Reply 23): Yes, but never underestimate the destructive power of Argentinean populist politicians to mess up with even that.

Umm... the same article (from a source which is an advocate of the Falkland Islands, nothing wrong with that itself, but hardly an unbiased source), states inside than in 2009 there was a severe drought in central eastern Argentina, which perhaps people here didn't hear about but it was widely reported. So such predictions were based on that situation and for 2011 the wheat crop (or the corn crop, not sure) will be a record. Let's keep things fair here and not try to blame the weather on the populists, as much as we may dislike them.

http://www.bloomberg.com/news/2010-0...u-s-canada-from-brazil-market.html

Beef production will be able to cover internal demand since it's dropped by 30% with higher prices finally hitting shelves (though at huge levels of consumption for world standards). The internal inflation has paradoxically nullified the disadvantage of selling internally vs externally, which was the source of the tensions because farmers wanted to sell at higher prices overseas. But now the price differences are much lower since local prices have risen to approach international prices as the Argentine Peso has stayed at around 4.20 but inflation still goes on.

It seems that nobody in Europe is willing to face the fact that Greece will NEVER NEVER NEVER be able to pay off its debts. It just can't be done. The banks that have lent to Greece just can't seem to accept this fact. Their loans are worthless. Sooner or later the collapse has to come. It's useless to postpone this inevitable default. The sooner we take the hit, the sooner we can start to rebuild the world economy. I wish there was a viable alternative, but I just don't see it.

Quoting PanHAM (Reply 26): you are right and not. Markets are volatile and money is as shy as a deer. What could happen here is that we get a "north" € and a "south" € .

Yeah, well, we're a long way from that scenario, for the simple reason it is about 100 times more difficult to implement than a simple bailout or exit plan and it will only hold losers, north and south.

Quoting PanHAM (Reply 26): The mistakes have been made a long time ago, it was a mistake in first place to take Greece into the € with faked balance sheets and it was a mistake to let them stay in the € last year.

Well, I am not going to start a blame game here, but do you know that ironically it were the French and German governments who were the first to let go of the very strict convergence criteria set in the Maastricht Treaty aimed at preventing "Greek tragedies" to happen (pun intended).

I prefer not to look back, as that isn't going to solve any of the problems at hands, but if you want to do it, then reality is very few countries met all of the 4 main criteria of economic and fiscal convergence at the start of the euro. In fact even Germany failed them, but it was decided to start with the euro nevertheless while strictly implementing a path of fiscal and economical convergence so that in due time all countries would meet all criteria and we'd then all be 100% safe and secure...

Of course, as so often with politicians, an economic crisis popped up on the radar and so they wanted to ease it with more public spending, so already within the first few years after launching the euro, nobody mentioned the convergence criteria any longer and believe it or not, but nobody seemed to care either, to the point even many economists started asking if the convergence criteria itself hadn't been made too strict at the start of it all, because 'post-modern countries just have big debts and deficits'.

Now all of a sudden, in the wake of the banking crisis which spurred a sovereign debt crisis, the bond markets have re-discovered these euro convergence criteria once again and have singled out those often small and poor countries that are way off on them, but mind you, Germany for instance is still not meeting the criteria either, so in fact by your own logic, it thus shouldn't be in the euro either!

See how absurd it can become if you start looking back to point the blame at somebody?

What needs to be done here is not rewrite the past, but look ahead at the future to solve the issues and it's actually quite simple really, surprisingly enough.
1/ the convergence criteria finally need to be implemented in full, something which all countries have started doing, hence the austerity packages which are put in place allover Europe, but in parallel to this,
2/ the markets need to be calmed as you can not expect austerity measures to have effect in a split second: they will take a few years, hence the ECB must provide the needed liquidities to the markets in the mean time as a guarantee investors in bonds will always get their money back.

It's why the whole EFSF is a weird concept really, regardless the amount of money put into it.
What needs to be done is let the ECB buy soveign debt as buyer of last resort (and to offset it with newly printed money), just as the FED is the buyer of last resort for the US treasury, or the BoE is for UK bonds.
The fact the euro does not have such an official buyer of last resort other than the EFSF (with a limited amount of money) means there is always an inherent a risk of default with eurobonds and thus a premium needs to be paid on governement bonds issued in euro, which is of course making it ever harder to put an austerity package in place that works.

I know the Germans are extremely opposed to a change in policy for the ECB, but seriously, it is the only solution possible and it needn't be such a big deal really as some inflation isn't going to kill you, you know, especially not as it is coupled with real growth! Now we have inflation in a staganting economy, something which is much worse as recession is looming around the corner.

Article 44
* 2. The President of the Republic shall by decree proclaim a referendum on crucial national matters following a resolution voted by an absolute majority of the total number of Members of Parliament, taken upon proposal of the Cabinet.
A referendum on Bills passed by Parliament regulating important social matters, with the exception of the fiscal ones shall be proclaimed by decree by the President of the Republic, if this is decided by three-fifths of the total number of its members, following a proposal of two-fifths of the total number of its members, and as the Standing Orders and the law for the application of the present paragraph provide.

If I understand well, the first sentence applies: the cabinet has to propose, 151 MPs have to approve and the President signs and off we go.

From an ethical point of view, sociologically speaking, PM George's reason(s) is perfectly justifiable, short of being able to build a Unity government, he wishes the lambda citizens to take their responsibilities (and relieve his crumbling party of some of the burden).

Quoting slz396 (Reply 29): Well, I am not going to start a blame game here, but do you know that ironically it were the French and German governments who were the first to let go of the very strict convergence criteria set in the Maastricht Treaty aimed at preventing "Greek tragedies" to happen (pun intended).

Yes, I know that and the guys who jumped over the rope were exactly the same that let Greece in on political, not economical reasons.

Has anybody ever been able to rationally explain why germany is so utterly opposed to letting the ECB do what any other central bank in the world is doing, that is to be the lender of last resort to its treasuries? The idea this somehow opens the door to hyperinflation simply is not real anymore in the context of the eurozone.

First of all because the current crisis has made it perfectly clear all eurozone countries MUST adhere as close as possible to the convergence criteria by all possible means and they will so in future for sure (making excesses as good as impossible), but secondly and just as importantly because we're not talking about a relatively insignificant 'local currency' like the DM or the FF, but about a worldwide currency which is legal tender from the North Circle down to the tip of Italy, and from Cyprus all the way to French Guyana in South America, so the risk of importing inflation through weakening the currency in a process of quantitive easing by the ECB is relatively small to nonexisitent, given people in the eurozone buy and sell the overwhelming part of their goods 'domestically' so to speek...

[Edited 2011-11-02 08:41:56]

Quoting kaitak (Reply 5): Perhaps we might see someone in the Greek government getting rid of Papandreou and cancelling the referendum. After all, it is hardly going to help anything?

Quoting Dreadnought (Reply 15): And more protests etc as the people who voted no realize that their pensions and benefits that they were fighting for are going to be inflated out of existence.

Well, I look at it this way, if the people do not give their voice to the measures and they are implemented regardless what type of economic activity will exist while folks are on strike and others are marching and demonstrating in the streets? Ho wmany are expected to be put in jail or heaven forbid killed in the chaos.

If they vote no, knowing full well that they presently cannot sustain their economy one would expect that since they are educated persons they will step up to the plate, no one can say what other alternatives may exist, every plan being touted at present is in the best interest of persons out-side of Greece.

Quoting par13del (Reply 33): If they vote no, knowing full well that they presently cannot sustain their economy one would expect that since they are educated persons they will step up to the plate, no one can say what other alternatives may exist, every plan being touted at present is in the best interest of persons out-side of Greece.

I am not so confident. In America we have the same problem - millions of people who get wild whenever anyone says that their government benefits will have to be cut. It really is selfishness at its worst - everyone knows that the government overspends by close to 40%. Everyone knows that there is no possible way in hell to make up that shortfall with extra taxes, not even halfway. Logical conclusion is that spending has to be cut massively, and the bulk of our spending is in entitlements. There simply is no other way. But as soon as you say that, you have the retirement associations and all the other groups that get money from the government in the streets saying, don't touch MY entitlements!"

It's really sad, and it will get ugly when the day comes that either their checks are downsized by 20-30%, or inflation sets in, and they realize that their "entitlement" only pays for a third of what it used to. One or the other will happen - it's too late for anything else.

Quoting Dreadnought (Reply 12): And of course the big question is which countries will learn their lesson from greece?

BINGO. We in the USA don't seem to have gotten the point, at least not the American leftists and Democrats.

Greece is screwed.

Not only do they not have the means through organic economic growth to extricate themselves from this (whereas many in EU and US can), but Greece is a ticking demographic time bomb: their birth rate is below replacement sustainability, the population is aging, and there are no means to protect those already past or near working age. With fewer younger productive workers to pay for the social largesse, they're living on borrowed time.

The West in general has birth rates that are too low. But compounding Greece's problem is their economy. The rest of the EU is treading on thin ice.

Quoting iakobos (Reply 30): If I understand well, the first sentence applies: the cabinet has to propose, 151 MPs have to approve and the President signs and off we go.

That is only if the President asks for a referendum. So far he has not. Since the new agreement will in fact be a bill passed through parliament, I am pretty sure it falls under the second paragraph you quoted.

Quoting lewis (Reply 36): That is only if the President asks for a referendum.

I am not so sure, the wording is such that the President is never the initiator but the final signatory.

Why did all of these banks lend to the Greeks? What ever happened to banks balancing their loan portfolios and hedging their risks? If I remember correctly we did discuss this in my finance courses when I did my MBA. It seems that your average banker today is like some compulsive gambler in Las Vegas.

Quoting victrola (Reply 38): Why did all of these banks lend to the Greeks?

Indeed .

Looks like the referendum will be held on 4th December.

Quoting OA260 (Reply 39): Looks like the referendum will be held on 4th December.

Wow, they started by announcing it for January but I guess it has to be sooner if Greece wants to receive the next tranche of money.

Waiting for the vote of confidence on Friday. If the referendum goes ahead it will be a very scary November. Hope I can vote through a Greek consulate.

Quoting lewis (Reply 40): Waiting for the vote of confidence on Friday. If the referendum goes ahead it will be a very scary November. Hope I can vote through a Greek consulate.

Im arriving into ATH 24 hours after the vote   I hope there are no more ATC strikes lol... I know people slate Papandreou but he gave a good speech just now as he left the meeting in Cannes. He does seem to have faith in the electorate and I think I do too. When the crunch comes to it I feel people will be scared not to vote YES.

Quoting OA260 (Reply 41): he gave a good speech just now as he left the meeting in Cannes

Haven't heard the speech yet but I heard his reception was not warm at all, which is good!

Quoting OA260 (Reply 41): Im arriving into ATH 24 hours after the vote

Depending on the outcome, it could range from total calm to civil war I am afraid.

Quoting lewis (Reply 42): Depending on the outcome, it could range from total calm to civil war I am afraid.

At least the threat of a coup has been watered down with the sacking of the Generals LOL... I presume you read that piece in the Greek media ? Who knows what the truth was about that one.  

The Generals did get replaced but I read it was more of a planned rotation that takes place every couple of years.

Quoting OA260 (Reply 43): Who knows what the truth was about that one.

Since changing general chief of staff and chiefs of staff of the three forces on the same day, the answer is obviously a quick and radical clean up "just in case".

So Lewis, what is your conclusion on article 44 of the Constitution ? (I am asking because I am not truly fluent with the original Greek text and I have to depend on a translation)

Quoting OA260 (Reply 41): When the crunch comes to it I feel people will be scared not to vote YES.

What if many decide to abstain or not show up to vote because they don't want further austerity measures but also want to be in the eurozone and know that these measures are necessary? You have to look at both scenarios here: either they vote (yes or no) or they will abstain.

Is there an absolute minimum turnout for a referendum to be considered? I highly doubt that a 20% turnout with 51% for yes is representative, but laws vary by country.

Quoting lewis (Reply 44): The Generals did get replaced but I read it was more of a planned rotation that takes place every couple of years.

   When are the public hangings scheduled? Sad really... Drachma anyone?

OTH... I can't wait for the German Mark to come back! I failed to convert a bunch, back in the day!  

Quoting iakobos (Reply 45): So Lewis, what is your conclusion on article 44 of the Constitution ? (I am asking because I am not truly fluent with the original Greek text and I have to depend on a translation)

I read it in Greek as well, it is not clear whether the President has to initiate it or just sign it. But, I would guess that "signing it" would always be part of the process so they wouldn't have to differentiate between the two as they do. I also remember reading that Papandreou was trying to push a law that would make referendums easier to go through, don't know whether that bill passed or not.

Quoting mffoda (Reply 47): When are the public hangings scheduled? Sad really

Although I am not an expert on military issues in Greece, I have seen it happening a lot of times before, it even happened while I was serving - having to memorize the new names etc.