Nov 8, 2011

Prime Minister Papandreou Is a Good Political Leader, Isn't He?

Prime Minister Papandreou looks very confused about the debt-relief deal with EU.

He suddenly announced that he would hold a referendum for the acceptance of the terms for the debt-relief deal. Because most people predicted that Geek people would deny the referendum, they thought that Papandreou made the deal and the Euro Zone itself danger. His real intent couldn't be understood well, so Euro market was shocked, and Merkel and Sarkozy called Papandreou to Cannes.

At the end he got the agreement of implementation of the terms of the debt-relief deal with the opponent party, New Democracy, by his resignation of the prime minister. I think that this is just as his plan. (see New York Times)

First of all the prior Prime Minister, Kostas Karamanlis, is responsible for this problem. His government made accounting fraud in order to hide huge national debt and pretend to keep Euro Zone limit. And then Papandreou revealed it.

He confronted quite sever political situations. He had to agree with EU about the debt-relief deal. But it meant that his government should do the policies that were quite unpopular among Greece people. And more his government doesn't hold a stable majority in the house and his political position is unstable.

He struggled to a narrow pass. The reason why he proposed the referendum was bluffing. The members of New Democracy also knew that Greek should agree with EU about the debt-deal, but they wanted to impress the responsibility of unpopular policies to Papandreou. I guess that Papandreou knew that he had to resign from the prime minister in order to get cooperation with New Democracy but at the same time the resignation from the prime minister was the last card.

I think that Papandreou did what he could do as a prime minister in such a sever condition. Now the responsibility is handed over Greece people.


  1. Dear Yagian,
    I have a quite different interpretation of the facts. But let me start from a key standpoint that is at the center of this crisis: in Europe we have a monetary federation but we do not have a federation in nothing else, that is, we do not have a European economic, social welfare, and political federation". The political indecision and long time to act by European leaders is related to the need to confront the euro crisis on the one hand, while on the other hand having to please or placate their national citizens who elected them. This creates a lot of entrophy into decision making. Think about the Germans: On the one hand Merkel knows that she needs to save the other countries from the Eurozone because if these countries bust (economically speaking) and leave the Euro the damage to the German economy will be tremendous (these countries will stop buying German products) but at the same time she knows that the Germans do not like at all that Germany sends more money to these countries. In the eyes of the Germans - and not entirely without reason - these countries just live above their pockets and the German public opinion believe that the more money they send, the more is spent without any results or changing of the situation. So there is a duality between what needs to be done at European level and the constrains that the national political struggle brings. This creates two levels of responsability that are not compatible - most of the times being responsible at one level makes you irresponsable at the other level. This was exactly what Papandreou did! He got the agreement at European level, and then released it to a second stage by announcing a referendum at national level. He immediatly replaced European priorities by national priorities related to internal politics...his problem was that he was in no position to do this. Actually he suffered a huge embarassment as the representative of the Greek people because he was called to Cannes and Merkel and Sarkozy only told him this: "you want to do the referendum? fine, Greece will get the funding after its results" - the problem for him was that he needed a couple of months to do the referedum and get the results, but he needed the money now because he needed those 8 billion Euros to pay the wages of the public administration in Greece. I can't blame him for this strategy since it is a typical strategy of politics in Southern Europe but in this case he just committed political suicide. On the other hand, it may as well be as you say. I think no one would like to be the prime minister in Greece now, and he got out of it. The situation there is very difficult as it is becoming dire in my country, in Spain and in Italy. Hopefully, this crisis won't be so felt in Japan.

  2. Thank you for your comment and I can understand the situation of EU more.

    The European monetary union might go so quickly that the institution can't catch up. At the end the U.K. is proved to be wise, does it?

  3. Well, the position of the UK was always one of precaution which is typical. De Gaule, the French president after the second world war was always against the entry of the UK into the European Union because he said that they did not truly have an European mindset. The UK was always very cautious of its European role and this is strongly related to the UK story within Europe (always part of Europe but always weary of the European continental powers - Germany, France and in the old times Austria and Russia). Still, the decision from the UK to stay out of the Euro proved a double blade sort of thing: on the one hand, its currency is not under attack and the economy is growing at a faster rate than most other European countries, but at the same time the pound is increasingly losing its relevance in the world, it is devaluating while the UK slowly losing its role as a major economic and industrial power.

  4. I think that the main purpose of EU is preventing the war between Germany and France. So the UK don't take the main part of EU.

  5. Indeed that was the first and foremost important goal of the EU when it was created. It continues to be a major goal. The problem is that this goal evolved and became more complex, and now politicians - and even the population - do not know what to make of it or know what the EU should become...

    It is like a summer love - major goal to have fun for a time - that evolved into something deeper and the couple does not know if to advance to a marriage or what to do about the feelings :)