…The President of the Republic shall by decree proclaim a referendum on crucial national matters following a resolution voted by an absolute majority of the total number of Members of Parliament, taken upon proposal of the Cabinet.
A referendum on Bills passed by Parliament regulating important social matters, with the exception of the fiscal ones shall be proclaimed by decree by the President of the Republic, if this is decided by three-fifths of the total number of its members, following a proposal of two fifths of the total number of its members, and as the Standing Orders and the law for the application of the present paragraph provide…
…Which is from Article 38 44 of the Constitution of Greece. Note our emphasis.
Two things jump out, in terms of the Greek government’s planned referendum ‘on the bailout’:
1) Will there be the votes to call a referendum early next year? (A timetable being mooted.) It seems that the opposition will lose this Friday’s confidence vote in the Greek parliament. But Papandreou seems to have called this referendum in part as a “back me or sack me” moment with his own party, PASOK. What if they sack him or elections are called before January?
2) If there is a referendum, what will it ask? If it can’t be about the government’s fiscal policy — which could cover almost any aspect of Greece’s memorandum of understanding with its official lenders — would Greeks be asked to vote on something deeper? ‘Should the government continue working with the Troika’ is easy to imagine, however surely this would be taken even more as a direct plebiscite about Greece’s receipt of IMF loans, or its membership of the euro (the ECB’s a Troika member). Even Greece’s relations with the EU. (Especially if there’s no way as of yet to leave the euro without the departing state leaving the EU.)
Before we get to that point, it is worth asking about early elections.
This is a gamble for resurrection by the current Greek government. The IMF in particular must be horrified at playing croupier. No IMF borrowers have really ever held a direct public vote on the policies prescribed to them by the IMF.
We’d expect that the Fund wouldn’t want this to serve to encourage future borrowers to do the same. On the other hand, IMF officials have worked with serious political and electoral risk before. Could they cooperate with a government led by the current opposition, for example? The New Democrats have recently got their populist kicks by attacking the Troika. Still, the IMF has been here before.
One precedent that’s especially invidious: Argentina, late 2001.
Update: Woops! Its Article 44, not 38. Apologies. Do check the comments below about whether the referendum could be about Greece’s fiscal policies after all. On the other hand, snap elections have been looking ever more likely to replace a referendum as the day’s politicking has gone on…
Related link:
The price of pathological procrastination – FT Alphaville