Tuesday, November 1, 2011

"Is Greece heading off a military coup?"

From Credit Writedowns:
I really don't like the military coup meme on Greece, but it can’t be entirely dismissed. Here’s why?
Clearly, George Papandreou called for a referendum on the austerity because he felt any decision his government made that was not popularly supported risked a veritable civil war. A Greek author put it well in the Guardian:
The balance was probably tipped on 28 October, the anniversary of Greek entry into the second world war. Traditionally there are student and military parades in urban centres, the largest in Thessaloniki. In an unprecedented act, crowds of bystanders disrupted parades across the country, including in Thessaloniki. Government representatives were hounded and the president was called a traitor. The mechanisms of symbolic and ideological power of the Greek state buckled.
The reaction of the crowd signalled a development that has been in the offing for a while. By imposing ruthless austerity, privatisation and liberalisation, the EU has eventually succeeded in igniting the nationalist sentiment of Greeks. The rejection of the latest bailout has taken a nationalist tinge, often directed against perceived German domination.
Lest it be misunderstood, this is not yet virulent nationalism. It is more a reaction to the loss of national sovereignty and independence that would result from the permanent monitoring of Greek finances by EU bureaucrats, and from the plan to sell a huge range of public assets to pay off debt.
It is also a reaction to the palpable weakening of the democratic process in the course of the crisis.
Papandreou is fully aware of the risk of being branded a traitor, fairly or unfairly. He is also aware of the advancing collapse of his government. But he is reluctant to hold fresh elections because he knows his party would be destroyed. And so he has opted for the desperate gamble of the referendum in the hope of buying time, as well as scaring people with the "euro or drachma" question.
Fair enough. But now, we have learned that the Defence Minister has made a wholesale change of military leadership (hat tip @). The question is why...MORE
Which may explain another reason for the austerity budget.