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What Next for Greece After No-Confidence Vote?

In a period of fiscal and social turmoil, the Greek government has decided to risk its survival and the economic stability of Europe on a public referendum over the details of the most recent offer by the leaders of the Eurozone to bail out of Greece from its fiscal destruction. As a result, is it not clear if the Greek government will survive the no confidence vote scheduled for Friday.

On the one hand, the referendum is a long-desired opportunity for the Greek people to voice their views on the controversial details of the proposed bail out procedure. On the other, the prime minister’s decision to call for such a referendum has produced turmoil in the Greek stock market which has spread to other European and international markets.

Members of the ruling Government are resigning one after the other, making an early election practically inevitable. It also prolongs the uncertainty over the Eurozone offer and its ability to avert an international financial meltdown. Thus, the Greek government’s actions are endangering the future of Greece in the Eurozone and the survival of the Euro itself.

Greece faces several possible options:

1. The Government will resign, leading to an early election. Unfortunately, this will not resolve the crisis because the question will remain as to which temporary government will see through the fiscal obligations of Greece until after the election period.

2. Papandreou will attempt to create a Government of national unity. In this new ruling coalition, it is unlikely that he would remain as Prime Minister. He would be replaced by a political leader of a nation-wide acceptance capable of building agreement between the different parties.

3. If Papandreou survives the vote of confidence, then the scheduled referendum may ultimately go through. The possible rejection of the bail-out deal by the Greek people would create a major crisis that could lead the country to leave the Euro. Greece could default on its debts in an uncontrolled way, sending shock waves throughout the global financial system.

4. Perhaps the national referendum is a political chess move–an attempt to directly persuade the public to vote for and keep the government on track with the reform decisions made by the IMF and Eurozone leaders. This move could strengthen the theory of direct popular involvement in the decision-making process of the government but also carries great risk of backfiring.

5. The Government may hope to attract a sufficient number of supporters to remain in power by surviving a no confidence vote in the Parliament with a reduced, but survivable majority.

At the same time, there are sudden moves from the minister of Defense. He decided to unilaterally change the national Hellenic Assembly Committee of National Defense and Foreign Affairs without the written consent of Parliament, raising concerns by the wider opposition parties.

Within the same day and in before the traditional period, (March of every year is the evaluation of the national armed forces commanders) he reshuffled the leadership of the Hellenic National Armed Forces. The last precedent for changing military leaders during a political crisis happened shortly before the Dictatorship in 1967. Such moves raised official concerns of constitutional legality by opposition parties. It was regarded as “a dictatorial, unilateral move” from the ruling government. Critics estimate damaging negative effects on the democratic institutions and the capacity of the parliament’s decision-making process.

It would be dangerous for Greek political and defense leadership elite to be in such a state of flux during this major economic crisis. The ensuing domestic instability and international concerns created by this uncertainty will worsen, rather than improve the current fiscal and social turmoil if it continues for an extensive period of time. Unfortunately, this worst case scenario already happened in Greece back in 1963.

This article has been published by Dr. Efthymiopoulos on ACUS (http://www.acus.org/new_atlanticist/what-next-greece-after-no-confidence-vote).

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