Papandreou drops referendum – and credibility with Greeks

The international bankers have stiff-armed the Greek Government and forced Prime Minister George Papandreou to drop the planned people’s referendum on the Euro zone bail-out.
The decision to put the poverty-inflicting measures to a vote followed a marathon session of ministers and senior members of the ruling PASOK, the Pan Hellenic Socialist Party, which ended at 5 o’clock in the morning.
Now the proposed vote has been overturned following immense pressure from the banks and the panic-stricken leaders of the G20 who are meeting in France.
By bowing to the pressure of Wall Street and the European banks, Papandreou has lost every shred of political credibility. The first casualty of the backdown will be Papandreou himself.
Having promised his party and the general public the opportunity to vote on the Euro-package of severe austerity, he does not have the authority of imposing it upon them.
The new scenarios facing Greece are these:
A party room coup which ousts Papandreou and replaces him with his chief rival, Finance Minister Evangelos Venizelos.
The formation of a government of national unity, the dreaded Gnu, between PASOK and the right-wing New Democracy with the ultra-loyal and chauvinist Greek Communist Party on the outside restraining the unions and the mass movement.
Fresh elections which will plunge the country into an even deeper political and economic quagmire.
In the meantime, the defence minister has sacked the heads of the army, navy and air force and promoted a new defence leadership. Why?
With memories still fresh of the colonels’ junta which ruled Greece from 1967 to 1974, the dramatic changes have added to the apprehension in civil society.
The decision to drop the referendum has been hailed by the money markets but it won’t go down well in the Euro zone where communities are in revolt against the economic diktats imposed by the banks.
Italians, Spaniards, the Portuguese and Irish will see Papandreou’s enforced climbdown as the naked use of force by the banks and the pro-capitalist governments of the First World. The message is clear: the general public has to suffer a massive loss in living standards and family expectations to keep the rich growing richer.

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