Reflections on a dead referendum

Referenda are a terrible way to take political decisions, particularly complex ones. A simplified “yes” or “no” rarely qualify as valid answer. Real politics is all about the gray areas in between. Furthermore in matters of importance for a society it is imperative to reach consensus, a requirement that cannot be met in a referendum. If anything, referenda introduce the dictatorship of the majority and are therefore the cause of divisions within a society. In the ancient democratic cities of Greece such divisions caused defeated minorities to leave the cities altogether and establish other cities elsewhere – the colonies. The right to abandon your city if you disagree with it goes hand-in-hand with direct democracy, otherwise direct democracy may cause civil war or strife. However, in our modern world of nation-states there is no room left on this earth for dissenters to colonize and start anew. Finally, referenda catch the “moods” rather than the “thought” of a people; they thus offer fertile ground for demagogues. Direct democracy, although noble and aspiring as a concept, bears within it the seeds of its own self-destruction.

Nevertheless, ideological orthodoxy must not blind us to the exceptions that history throws upon us. And Greece, today, is precisely such an exception. A disunity of wants runs deeply within Greek society. Voiced in the streets and reflected on polls are two apparently opposing and mutually exclusive things: (a) to remain in the eurozone and (b) not to submit to the terms of their bail-out. This disunity is tearing Greek society apart. There is no magic formula to resolve this. But a referendum could have make citizens reflect upon their positions on the matter. More importantly, it would have made Greek citizens realize that decision-making is all about choosing what to sacrifice. This, in itself, would have been important for a people to gain a much-needed degree of political maturity.

The Greek referendum is not going to happen. The political elites have won the day. The Greek people will only be allowed to elect a new government in a few days. Much of this development owes to the potential disaster that such a referendum (on Greece staying or leaving the eurozone, as it was going to be framed) would cause on markets, as well as the Greek economy – whatever little is left of it. Nevertheless I find the angry reaction to the Greek referendum from the Franco-German axis and the bureaucrats of the EU and the IMF far more telling. Their vision of Europe is unmistakably one of bureaucratic elites running government and the people following. It is also a vision where some countries command and others obey. It is the wrong vision. It inspires little fidelity to a common European dream. It creates deep divisions within the Union, of the eurozone and the rest, and now within the eurozone as well. How long is this going to hold before the European project unravels?

And to be clear on something that is often flying around in the German press, or the German voters’ minds. German insistence to punish Greece for its so-called profligacy is hypocritical. Greece did not steal money from anyone, it received it from lenders in a market who at the time were happy to lend her, obviously because they were making profit out of the transaction. They obviously calculated the risk of lending to Greece wrongly. They should pay for that. That’s how free markets ought to work. End of story.

Besides, there were supposed to be mechanisms and agreements to control debt in the eurozone, monitored by the European Commission and the European Central Bank. What happened with that part of the story? How comes it is only Greece and Greeks that have been deemed responsible for “bending the rules” – and therefore justly liable to years of austerity and poverty?

Without condoning what the Greek governments did with the money they borrowed on the back of the euro, I argue that blaming the Greeks for spending it is idiotic, and immoral. It is like accusing the drug addict for his addiction, punishing him, and letting his pusher scot free with an extra bonus. So, Ms Merkel, there is no “moral hazard” in bailing  Greece  out without having to reduce Greek society to ruble.

Greeks were reigned in today and told to step back in line. They will. But how much of this is a solution to the real problems on the ground, in the streets and the economy? How much of Greek adherence to terms and conditions will save the future of Europe and of the Eurozone?  The real issue is not Greece, or the stillborn Greek referendum, but whether the agreement of October 27th is right or wrong. I would argue it is completely wrong, for it does nothing to safeguard a sustainable economic future for Europe. Analysts more adept and knowledgable than me agree too. Worse than that, the idiotic persistence of Ms Merkel and Mr Sarkozy to blackmail Greeks into accepting it is despicable, immoral and undemocratic – and must stop.


  1. CL

    Thanks for raising the salient points with regard to the shared responsibility that should be bourne by the speculators. What is happening in Greece, speaks volumes for the dissolution of the democratic dream. Many may welcome the transition as in a globalised, increasingly complex and resource constrained world, there are deep questions to be asked about how we can best administer in an agile manner. However, what we have seen take the place of representative democracy is a work of pure puppetry.
    This was Papandreou’s crime, he threatened to bring the audience to the after-party. But have no fear, the markets will be tamed, the populace further austerified and the bottom lines of the interconnected further padded with doublespeak.
    None of it will make much difference for the fate of the current economic sham, however. There is no way to deny that as the increasing amount of energy required to extract ever poorer quality fuel sources bites growth down to size, the debt based economic fundamentals cannot cope.
    A resurgence of public debate, opinion and power would have us ask the core questions; why has wealth become increasingly centralised, why have nations been divested of their commonwealth and why do the puppetmasters seem so relatively unphased?
    It is essential that the populace find their voices by realising that many governments have forfeited their right to rule. A government, to be legitimate, must have the safety, health and betterment of the majority of its populace for perpetuity at heart. If you cannot say this of your government then it is important to ask whether they deserve to be your rulers, and do not dream for a moment that “the opposition” is any different, they oppose and beat the flames, creating a smoke screen away from the greater issues. Hence the play continues.

  2. Jay Schmidt

    Iceland Referendum a Winner

    “Take a good look at Iceland. In repeated attempts, political hacks (with banker’s interests in mind) attempted to sell Icelandic citizens into debt slavery. A referendum saved the day. Sadly, voters were forced to repeat the referendum, and once again voters made the correct decision.

    Iceland is now in full recovery simply because it told the EU and IMF to go to hell.”

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