Given the economic devastation of a default to Greece, that this author is proposing rejecting the bail out package and an exit from the euro shows a profound misunderstanding of the consequences.

While I agree that Greece should never have been allowed into the Euro, an exit now would bring Greece to 3rd world status.

One of the problems with articles like this, is that they are really easy to write. Take a complex problem - say, the GFC - and boil it down to some simple sound-bites that will sound really good when regurgitated to your mates in the pub. The really difficult stuff - what the alternatives might be, what level of politics is at play both in Athens and in Brussels, what does "democracy" mean in situations like this - all get swept away in a bunch of simplistic generalities.

It is a classic illustration of the complete dumbing-down of our news media, the price we pay for condoning news-as-entertainment for so many years, and exacerbated by the mindlessness of our new tweet-and-retweet mentality.

This is only superficially about "democracy". It's about complex political manouevering in a highly volatile environment.

Questions that would shed light on the situation are ignored. Why did Papandreou not advise Sarkozy and Merkel of the need for a referendum during the negotiations? Did he only consider "democracy" as an afterthought? Is this simply a way to leave the Eurozone with "honour", leaving behind only a long tail of broken promises and worthless financial instruments?

The likelihood of full default on Greek bonds is now back on the cards. With it, comes the inevitable ejection from the Community, and increased hardship for the people of Spain, Portugal, Italy and Ireland, to name but four, who will be forced into even greater belt-tightening exercises than they already face.

Nevertheless, you have to give the guy points for his negotiating tactics. If he forces an even "better" deal for his citizens out of SarkoMerkel, he will be a hero to his people for a short while. Until they realize that after all the bluster, the underlying problems haven't changed: the country is a financial basket-case, and has only been part of the Community for as long as it pretends otherwise to itself.

It will all end in tears, that much we know.

Looks like the referendum is off the table, at least.

http://www.bbc.co.uk/news/world-europe-15586673

Does that mean that "democracy" wins, or loses...?

Apart from the typical 'blame every European crisis all on allegedly generous EU welfare states', not pollies corrupted by Goldman Sachs backroom deals posing as European bond markets, this essay fails to acknowledge the real dilemma a referendum poses for the Greek people.

Opinion polls show that 54% of Greeks oppose the bailout but 70% want to remain in the EU. On this basis, the referendum will no doubt overrule everything the demonstrations have stood for. If it comes off, Papandreou will have played a brilliant hand and maybe keep his job.

Ah yes - a nice conspiracy theory. It's all the fault of those evil bankers. Not the failure of Greece to construct anything remotely resembling a civil society since its independence from Turkey 180 years ago. Not the fault of the Greece that has defaulted several times before on debt obligations and was kicked out of the Latin Monetary Union for lying about the gold content of its coins. Not rhe fault of Greeks who openly admit refusing to pay taxes thus compromising the national budget. Not the fault of government after government which increased the Greek public service and improved pension entitlements, most of it on borrowed money,knowing there was no hope of repaying the loans. No, easier to blame Goldman Sachs.

I was actually in favour of Papandreou's referendum proposal because it offered a chance for Greek citizens to understand finally the situation they're in and perhaps resolve collectively to do something about it. They could even take the radical first step of paying their taxes.

Shadow Minister: there seems to be some misunderstanding.

I am not in favour of Greece rejecting the bailout per se.

I am all for a referendum where the Greek people will be made very aware of the troubles their republic is in and are given the facts so as to fully appreciate the consequences of voting yes or voting no.

Senior Victorian: as to the comment on Greece previously defaulting on its debts. Yes I agree. It's almost a tradition.

I would have supported a referendum in Greece, for good reasons.

Firstly, it would have caused a healthy debate in Greece, about
how deep in the poo that they really are. The stark choices would
have been laid before people, ie that there are no easy options.

People would have then become directly responsible for their
actions and at some point have to accept the reality of the situation.

All that will happen now, is whatever Govt decides, there will
be more demonstrations and attempts to overthrow the Govt, as
everyone tries to shoot the messenger. That will solve exactly
nothing.

...Greece proves the point! An economy based on olives and tourism is unsustainable; it should ring warning bells to the Australian “fetish” of migrating industry and importing population!

Jonathan J. Ariel,

The problem with a referendum is that the decision of the people is enforceable. If he were to lose gamble and the referendum, simply because the people did not understand the consequences of a default it would turn out very badly.

This is not a time to gamble with the flick of a coin.

I must say I am highly sceptical that a referundum will actually result in reasoned and intelligent debate on the fundamental financial problems plaguing Greece.
I suspect they will degenerate into the more typical jingoist and simplified sloganeering stuff we get over here.
Honestly, which do you think is more likely - a panel discussion of leading economists about sovereign debt or a round of 'hell no, we won't hold out until 65 to retire, pay taxes, sack public servants etc etc etc!'

So here we see the shills of anti-democracy advocating that there should be no referendum by the people in Greece on more bailouts for in all reality is the corporate banking system.Iceland told them to stick the Euro and has gone it alone.

The IMF,US Fed and Bank of International Settlements admit they through "Quantative Easing:" (ie counterfeiting of our currencies)have created inflation, then have the audacity to loan it back to us as debt? The real criminals are not the Greeks but the Central Banksters.We have to end the fractional reserve system of bankster slavery!Then the world will have peace and prosper.

Note also the Greek Govt has sacked all key Military leaders for fear they will side with the people.

*If he were to lose gamble and the referendum, simply because the people did not understand the consequences of a default it would turn out very badly.*

Your implication of that, SM, is that basically people are too stupid
for democracy. I will have to agree to disagree. People do in fact
sometimes need to learn by pain and its only by living with the
consequences of their actions that they do.

In fact Greece could be a great lesson for billions, of what could
happen when Govts borrow too much.

Covering all this over with various EU Ponzi schemes, is not going to
teach people anything. People will just vote in another Govt and
shoot the messenger, which will solve nothing

The entirety of the Greek situation is too complex for me (or, I suspect, any layman) to fully understand. It does seem to me, though, that if the Greeks can choose to accept or reject the bailout, the citizens of the other Eurozone nations should have the same opportunity. How many Germans are really all that keen to tighten their belts in order to fund decades of decadence in the Hellenic Republic? The damage has been done, the other Euro nations have been happy to fund that damage and, now that things are coming unstuck, both the much-maligned Greeks and the 'innocents' elsewhere who profited from their financial mismanagement are going to have to pay.

Would booting Greece out be the best thing for the Eurozone? What would be the impact on France and Germany (and others) if they just cut their losses and walked away? How can they peacefully reclaim what is owed to them without destroying the hollow shell that is left of Greece?

I suspect that, in the end, it will be the average Joe in Greece who will really suffer either way. But if suffering means living like the rest of the world, working while you are able to work and doing a real job (rather than just a made-up public service job), paying taxes and putting your economy on the table rather than hiding it out of sight, is it really suffering?

Nobody likes losing a luxury, but if it's a choice between losing that luxury and losing the shirts off their backs, surely the Greeks would make the right choice? The real task here is to ensure that, if they have a chance to make the decision, the Greek people are given all the necessary information and none of the spin.

Not likely.

Otokonoko, you're right. The Greeks should have the right to choose if to accept or reject the bailout and the citizens of the other Eurozone nations, namely Germany, should have the very same opportunity.

You ask 'how many Germans are really all that keen to tighten their belts in order to fund decades of decadence in the Hellenic Republic'? Very few I suspect.

You query who will end up footing the real bill in the end. I for one hope it's the proverbial non taxpaying Costas and Eleni and not thrifty and industrious Helmut and Trudy.

But I wouldn't bet on it.

"Democracy" can only be stretched so far.

>>The Greeks should have the right to choose if to accept or reject the bailout and the citizens of the other Eurozone nations, namely Germany, should have the very same opportunity<<

The natural end-point of this argument for the "right to choose" can only have a fully definable end-point when everybody is allowed to decide for themselves, whether or not they want to be part of the restructuring. Those that agree, will pay out of their bank account. Those who don't can keep their money.

The only problem with this is that the very same people already decided to live in a parliamentary democracy, and to delegate responsibility for tough decisions to their elected representative. So, there is nothing undemocratic in allowing the government to do the job for which - presumably - they were elected.

So those people who chunter on that denying the people a referendum is a denial of democracy, are being highly expedient, and just a little deceitful.

The financial crisis that is presently happening is a complex topic, of which the average Joe knows very little. And the little they do know, by the way, has been fed to them by the media, which as we all know is a profit-driven branch of the entertainment industry. The issue is further complicated by the fact that the same people chose to become part of the European Union project - which was silly mistake, but which also carries some responsibilities that they cannot simply shrug off.

Well, they can, of course. But it would be a very selfish gesture, one that would not bode well for their economic future outside that community.

For the record, I think the European Union is a crock, in everything except its underlying concepts. In practice, it has been a bureaucrat's paradise, and a drain on the energies of its members.

The Euro, disastrous even in concept, let alone practice.

But you cannot unscramble eggs, simply by wishing that you hadn't picked up the whisk in the first place.

*So those people who chunter on that denying the people a referendum is a denial of democracy, are being highly expedient, and just a little deceitful.*

I think that there are two sides to that coin, Pericles. I personally
think that really large decisions, like this one, or like the carbon
tax in Australia, should in fact be put to a referendum. Or else
people are simply going to go on turfing out govts, which does not
really solve things.

*The financial crisis that is presently happening is a complex topic, of which the average Joe knows very little.*

Well yes, the average Joe knows that his opinion simply does not
matter, so does not bother to inform themelves. But its something
that struck me in a place like Switzerland, where people vote
quite often. I found that that average Joe down at the pub had a
far more sophisticated understanding of the issues, because there
were good reasons to understand them and inform themselves.

There are good reasons why the Swiss sat on the fence, never joined
the EU, but simply established some trade agreements. Both
politicians and industry lobbied heavily to join, but the average
Joe said no. Perhaps the average Swiss Joe, being better informed
because of reasons to be so, was not so silly after all