Greece needs prime minister able to revive economy

What the hell happened last week? In all honesty, I'm pretty confused. In politics there are unexpected occurrences, such as Rick Perry making what could not have been anything other than the drunkest speech of his life in New Hampshire, or Herman Cain actually threatening to sue Politico for reporting on his sexual harassment settlements. But then there are unexpected occurrences. Greek Prime Minister George Papandreou's sudden bout of democracy fever as he called for a referendum on the European Union (EU) bailout package last Monday is most certainly one of them.

Until last Monday, it seemed as though Greece and the eurozone would be able to at least muddle through the next few months in their desperate efforts to avoid a regional credit crisis and a harrowing Greek default. The EU, International Monetary Fund (IMF) and the European Central Bank had managed to pull together a deal which increased the size of the European Financial Stability Facility to $1 trillion and offered Greece another $100 billion in bailout funds as well as a 50 percent haircut on sovereign debt owed to private banks. The bailout would naturally have forced Greece to shoulder yet more austerity in the coming years; conditions which remain toxically unpopular. On the other hand it promised to save Greece from an agonizing return to the drachma and likely years off the credit market.

The package, the fruit of a long and tense night of negotiations between French President Nicolas Sarkozy, German Chancellor Angela Merkel, IMF head Christine Lagarde and a host of other leaders sought, among other things, to calm the storm sweeping through the financial markets in the previous weeks. The markets rallied on Thursday and then stepped back a bit on Friday, but the consensus seemed to be that the package was not nearly the worst that could have been delivered––and there was much rejoicing.

But then Papandreou dropped the bombshell, declaring that acceptance of the deal—and, realistically, membership in the eurozone—should hinge upon the consent of the Greek populace in a national referendum, pushing the timeline back possibly as late as December or even 2012. Stocks recoiled, Merkel and Sarkozy called Papandreou to the site of the G-20 summit in Cannes, and Papandreou's opposition and deputies alike began seizing the opportunity to end his government.

Much has been made of the undemocratic nature of the response to the European crisis—and of much of the EU's dealings in general—but, in terms of preventing the crisis from spinning out of control, the referendum came many months too late. What could have been an inspiring push for democratic input instead became a cruel choice between the punishment of austerity and the potentially greater harms of a eurozone collapse. One wonders what good Papandreou expected to come from such a referendum. Opinion among Greeks, who naturally recognize the lose-lose nature of the choice, is naturally at odds with itself; according to a recent RBS survey, 60 percent disapprove of the bailout but 70 percent wish to remain in the eurozone.

As if Papandreou's decision-making process didn't already look suspect enough, the prime minister thought it would be a good idea to sack every single one of his chief military officers the next day. Naturally, the move sparked fears that a military coup was in the cards and provoked a great deal of condemnation from his opposition. But Papandreou doubled down and on Wednesday met with members of his cabinet to try and speed up the referendum process.

But, one day later, the referendum was a thing of the past and, on Friday, Papandreou bought himself a little time by winning a crucial vote of confidence within his parliament. One wonders exactly how Papandreou's colleagues in Greek parliament and the European leaders managed to get Papandreou to back down. Perhaps it was the threat that, if Greece failed to accept the new bailout deal, the EU would cut them off from funds keeping Greece from falling into bankruptcy in the meantime. Perhaps they convinced him that he didn't want to be the guy who brought the euro to its knees. Papandreou backpedaled with blinding speed, stating that the referendum was "never an end in itself." He is now working feverishly to pull together a coalition government that can continue the bailout process so he can resign having saved some semblance of face.

Papandreou has been prime minister for over two years now and is no stranger to the complexities of Greek and regional politics. His father and grandfather were both prime ministers of Greece. From 1999 to 2004, he served as Greek foreign minister and was instrumental in Greece's successful bid to host the 2004 Olympic Games. In 2004, he took over as leader of PASOK, Greece's major socialist party, and led PASOK to electoral victory in 2009 in the midst of the global recession. He promised Obama-worthy levels of governmental transformation, none of which he has delivered.

In terms of popular opinion and fiscal reality, Papandreou's government has been mired in crisis for months. Much like President Obama, Papandreou inherited an economic situation much worse than people had realized at the time. Like Obama, Papandreou has had to contend with a strong opposition (in this case the Greek New Democracy party) whose solutions for the crisis at hand conflict with those offered by his own party; and as a result the average Greek has seen only drastic austerity cuts and quarterly economic decline in the contest of government gridlock. This is surely beginning to sound familiar.

So what is it that brought Papandreou to the precipice of referendum, and what made him take the leap? The series of decisions he made this week can only be described as frenetic, as if he simultaneously played and lost track of several games of chess. From the outside it is fascinating to watch and frustrating to know so little of his line of thinking. Has he been trying to save his own skin this whole time or has he been honest in saying that he is "not wedded to the position of prime minister"? Was the referendum the last resort of a coward who wants to wash his hands of this crisis, or has he just lost all rationality? Could Papandreou simply be clinging to the dynastic legacy of his father and grandfather?

This past week in the life of Greece was by and large the same as the life of Georgios Papandreou: fast, chaotic and full of intrigue. It is a bit alarming to realize that the fortunes of entire countries and regions are so close to the baggage of their leaders. This is why it is so desirable to have a steady hand at the wheel, and why one shudders at the thought of a loose cannon like Rick Perry sitting by the nuclear button or a potential sexual harasser like Herman Cain as leader of the free world.

For Greece, and, due to the forces of global economic integration, the entire world, the next couple of months are make-or-break. Hopefully Greece will weather this crisis and find a prime minister who has the ability to steer the country down a less dangerous path and toward prosperity.

—Lane Kisonak '13 is a political science major.