These were the words that reverberated through the Brussels bureaucracy and world financial markets this evening:
“We trust citizens, we believe in their judgment, we believe in their decision. In a few weeks the (EU) agreement will be a new loan contract… we must spell out if we are accepting it or if we are rejecting it.”
No one saw this coming. As the EU’s elite congratulated themselves on announcing their unfunded €1 trillion voodoo financial package, to shore up Greece and thus keep the Eurozone intact for a while longer, Greek Prime Minister, George Papandreou, was preparing to ask the Greek people if they accept the terms of the deal in a national referendum.
Moves are already afoot in Greece to declare such a referendum unconstitutional. The political class dare not ask the people what they want. It is not the EU way. The Greeks will almost certainly reject the deal, seeing it as an element of the austerity measures that have resulted in strikes and civil disorder. That will mean a default on their already huge debt, and crucially, despite all the EU’s assurances to the contrary, the likely departure of Greece from the Euro.
If Greece defaults and decouples in such a manner, other indebted Eurozone nations such as Ireland or even struggling Italy, might just consider doing the same thing, leaving a mountain of debt in their wake and taking the opportunity to rebuild their economies with a new currency and manage their own financial affairs in their own interest once again. The Euro would be in serious trouble.
As Merkel said, if the Euro fails, Europe (EU) fails.
The one-size-fits-all chickens might now be coming home to roost. We will all feel substantial pain, but it will be pain that had been caused by the vanity, incompetence, mismanagement and anti democratic behaviour of the political class that has treated the people with contempt. People will not forget.
The very foundations of the European Union will be shaken if Greece lights the blue touch paper and presses ahead with a referendum. This could be the start of a turning point in European history. We are heading into uncharted territory and the possibility of conflict cannot be ruled out.