What was I thinking believing that even the Greeks couldn’t look a gift horse in the mouth? Well guess what, folks? Not only have the Greeks looked a gift horse in the mouth, they have screwed the pouch as well. That’s because Greek Prime Minister George Papandreou did his best impersonation of Curly Howard by calling for a referendum on the European bailout. If the vote is “no” (and many analysts now predict that that is a likely scenario) it could be disastrous, not only for Greece, but for the entire European Union and most of the West. It would most likely mean bankruptcy for Greece and a nasty split with the euro. A payment of $11 billion, which would’ve kept the government afloat, is now in jeopardy.
But wait, it gets worse. The bailout wasn’t only designed to prevent a Greek default, but shore up other fragile economies in Europe like Italy and Spain, which are substantially larger and far more problematic. Italy’s debt is roughly $1.4 trillion – or the entire emergency fund set aside in the deal – and if it goes south, like dominoes, it will take most of the other countries with it. So much for a rosier economic forecast for 2012.
This is what Curly – I mean – Papandreou had to say about his decision.
“We will not implement any program by force, but only with the consent of the Greek people. This is our democratic tradition and we demand that it is also respected abroad. A referendum will be a clear mandate, and a clear message within and outside of Greece, about our European course and our participation in the euro. The dilemma is not this government or another one, the dilemma is yes or no to the agreement, yes or no to Europe, yes or no to the euro.”
This is what I get for being an optimist. The next time I see a half-filled glass of water somewhere, I’ll be certain to pour it out.