George Papandreou, the Greek Prime Minister, has, if nothing else, succeeded in provoking Angela Merkel, Nicolas Sarkozy and other European leaders into almost threatening to expel Greece from the euro zone – not that there is any known procedure for doing so. Their previous insistence that the euro could never be withdrawn from a country may have encouraged the Greeks to think they could drag their feet on structural reform and austerity – or worse, march and riot.
The response to Mr. Papandreou’s now abandoned referendum proposal has had some influence on Greek politicians. The Minister of Finance, Evangelos Venizelos, openly dissented. But the changed position of Antonis Samaras, the leader of the New Democracy, the main opposition party, which is traditionally regarded as conservative, is more significant. He has taken an unconstructive stance toward the government’s quasi-insolvency and the attempts of the euro zone group to deal with it. Yesterday, however, Mr. Samaras – who happens to have been a roommate of Mr. Papandreou at an American university – has proposed a transitional national-unity government, with a cabinet largely composed of non-partisan “technocrats,” to manage the restructuring of the country’s government and economy.
Mr. Papandreou reacted to this idea with stony silence, pending a doubtful vote of confidence on Friday, but his mutability has been amply demonstrated in the past few days. Mr. Samaras has now shown some welcome, and overdue, flexibility. The Greek people, it seems, do not want to lose the use of the euro and go back to the drachma – still less do they wish to suffer from a run on the Greek banks, if those banks’ large holdings of Greek government bonds become nearly worthless.
Among the few people who spoke favourably of Mr. Papandreou’s ill-timed, short-lived referendum idea was Mark Carney, the Governor of the Bank of Canada, who, in speaking to the House of Commons finance committee, said (in answer to a question) that painful economic restructurings need broad democratic support – which is quite true. Inept as the Greek Prime Minister has been (unless there is method in his madness), he may have helped build consensus.
The prospect of economic shock therapy, to paraphrase Samuel Johnson, concentrates the mind wonderfully. Greece may yet co-operate.
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