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Greek PM Rocks the Bailout Boat

Posted on Nov 1, 2011
Flickr / Vasilis Filis (CC-BY-SA)

Greek PM George Papandreou’s call for a bailout referendum may backfire economically and politically, as the BBC also reported Tuesday.

Last week’s summit of European Union leaders to find an emergency solution, or at least a stopgap measure, for the region’s compounding economic crisis initially led to a brief bounce in the markets and a flash of hope. That was squelched by Tuesday with the news that Greek Prime Minister George Papandreou was taking matters into his hands in a way that could jeopardize the EU’s plan—as well as his position. Ironically, much of this latest round of trouble for Papandreou comes as a result of his bid to get Greeks in on the process by casting their vote.  —KA


Greece Prime Minister George Papandreou made a surprise call for a nationwide referendum on the new debt deal announced last week that calls for private sector bondholders to take a 50% haircut on Greek debt in return for promises from the government to cut spending and get the country’s debt-to-GDP ratio back to more reasonable levels.

The curveball Tuesday hammered stocks in for much of the day; at one point the slide knocked more than 300 points off the Dow Jones industrial average. Skepticism over whether Papandreou has the clout to get the referendum off the ground helped the market cut those losses though, while lawmakers in Greece were also pushing forward a no-confidence vote for the current government later in the week that could cost the prime minister his job.

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By Cliff Carson, November 2, 2011 at 11:57 am Link to this comment

To hear the mainstream media howl, that Greek Prime Minister must be some kind of obstructionist:


Because he wants the people Of Greece to have a say in their future.

And the DEMOCRATIC Governments are raising hell!

Now why would a Democratic Government be against the people having a say in their own fate?  You think it might be that those Democratic Governments are really not Democracies?  That those Governments don’t give a damn about the people? 

Now you know why the Occupy Wall Street people are really standing up for you and me.  They are occupying to put an end to this Government NOT for the people.

And the United States Government is one of the most criminal.

The OWS people are truly the best among us.

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By diamond, November 1, 2011 at 8:35 pm Link to this comment

As long as these people (the elite of bankers, stockbrokers and politicians) are allowed to treat the economy like a roulette wheel and the share market like their own personal casino they will go on with their crimes and unethical behaviour. Why should they stop? When the crap hits the fan the politicians panic and use taxpayers’ money to pay the debt and bailout the crooks. If that fails the IMF moves in and begins dismantling the entire structure and infrastructure of social justice as they plan to do in Greece. The Greeks have had enough of being done over and having their wages and their pensions raided to pay the debts of crooks. Iceland refused to do it and brought down the government when they tried. So far as I know the sky hasn’t fallen in over Iceland.

Mon Aug 01, 2011 at 08:47 AM PDT
Iceland’s On-going Revolution
by Deena Stryker

“Americans may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt.  The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion.
As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Here’s why:
Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors.  But as investments grew, so did the banks’ foreign debt.  In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent.  The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro.  At the end of the year Iceland declared bankruptcy. Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution.  But only after much pain.

The IMF and the European Union wanted to take over Iceland’s debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens.
Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros.  This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back. What happened next was extraordinary.  The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

In the March 2010 referendum, 93% voted against repayment of the debt.  The IMF immediately froze its loan.  But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis.  Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.”

All of the countries in this position should do the same. Close the casino down and smash the roulette wheel.

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By Rosa Luxemburg, November 1, 2011 at 6:56 pm Link to this comment

For Shame! Putting proposals on the ballot with enormous implications for the Greek people…who have been aggressively opposing them in every medium they can for over a year now. The nerve! He should have just continued to shove all the austerity measures down their throats.
The underlying dynamic that no one in mainstream media addressed: he probably doesn’t have much of a choice. Greece is on the brink of full-scale insurrection. Power to the People!

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By Rodney, November 1, 2011 at 5:39 pm Link to this comment
(Unregistered commenter)

He blocked a deal from happening? He must be a Republican

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PatrickHenry's avatar

By PatrickHenry, November 1, 2011 at 5:10 pm Link to this comment

Let the banks fail.

Enterprise will feast on the remains.

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By Amon Drool, November 1, 2011 at 3:06 pm Link to this comment

iceland and peru have not followed the dictates of
international banking institutions and they are still
standing as countries.  i’ll trust democracy to
eventually serve the public good over the international
banking tricksters anytime.

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By ejreed, November 1, 2011 at 12:37 pm Link to this comment

Euro Crisis Fears Over Greek Vote Shock
Greek Prime Minister George Papandreou’s decision to
call an unexpected referendum on Greece’s bailout has
created an economic climate of fear and uncertainty.

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