Saturday 5 November 2011

Eurozone: Playing with Greek fire in Athens

Where are we now? The FT Eurozone crisis live blog continued to offer excellent coverage 4 November 2011, including the G20 summit in Cannes. There you have a recap of the whole day until late afternoon, if you stand reading the updates upwards from the end.

For later developments in Greece we can go to Financial Times Deutschland, which presents the three protagonists of the power struggle in Athens: prime minister Giorgos (or George) Papandreu (Pasok), finance minister and rival Evangelos Venizelos (Pasok) and the main opposition leader Antonis Samaras (New Democracy)(in German).

Again a word with Greek origins comes in handy: paradox. Papandreou won the confidence vote (153-145) at midnight local time, after promising to step down, writes Financial Times Deutschland (in German). He wants to negotiate a new, broadly based government from a position of strength. Samaras calls for early elections, where Pasok could expect a thrashing, and a caretaker government to implement the €130bn eurozone rescue package in between.

In short, something has to give before Greece goes bankrupt mid-December. Not very reassuring for the eurozone governments and markets.

BBC News Europe clearly report Papandreou's stand before winning the vote of confidence. He promised power-sharing talks between parties, but ruled out snap elections as catastrophic (note Greek word origins), and he said that the bailout deal had to be accepted. Papandreou is going to inform the president of his intentions today, Saturday. Mark Lowen adds that Greeks - and all of Europe - are watching anxiously for Papandreou's next move.

The Financial Times looks toward the beginning government talks. Papandreou wants the president Carolos Papoulias to hand him a mandate to form a new government under another socialist politician, but without a rush to new elections. New Democracy rejects the plan and demands new elections within six weeks.

The Wall Street Journal Europe describes the situation, polarised between a Papandreou intent on the socialists leading a more broadly based (interim) government and the conservative leader Samaras finding his proposals rejected by the Pasok leader. The eurozone leaders are deeply worried about the fallout from a possible Greek default.


Is it possible to form a new and government during the weekend (without New Democracy?), before the markets open and EU finance ministers meet Monday? What would be the usefulness of a minor adjustment, except offering Papandreou an 'honourable' exit?

They seem to be playing with Greek fire in Athens.

Ralf Grahn


  1. Dear Ralf,
    As Doris Day used to sing: "the future's not ours to see, que sera sera". May not be a Greek term (paardox, Greek fire, etc) but part of American and global pop culture.

    Our Western culture does have a tad of an obsession with certainty and "rational investors" do seem to exhibit behaviour more characteristic of housewives in Wysteria Lane (again US global pop culture reference, lol). And the global media an appetite not very dis-analogous (Greek word) to the audiences in the Roman Colosseum!


    If Greece has IP rights to the "Greek crisis", it would have paid off a large % of its debt! That is part of the oxymoronic (oxymoron is a Greek word) nature of our times.

  2. @npthinking

    I think the time for excuses is over. Papandreou has blown his international trust capital and the vote of the Pasok MPs to hold on to their own seats is not a convincing argument for outside help.

    On past record New Democracy is atrocious, but in the present situation their demands sound more reasonable.


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