What is that crazy Greek guy up to?

Podcast: What is Papandreou up to? Is this naked political self interest, a bit of wily negotiating or the only expression of democracy on the crisis anywhere in the Eurozone? Greek politicians, pundits and members of the public have their say on what their Prime minister might be up to in my Drivetime report.  http://tinyurl.com/6azovu8

On Friday at 4am they had a deal done. Greece upped the write down from 20% to 50%. They got a promise in principle for another €109bn. But they wouldn’t be taking control of their own economic affairs until at least 2020, and the misery of austerity would only get worse. Papandreou spoke about the deal as the dawning of a bright new day for Greece and Europe, but three days later he caused consternation across the continent by pledging to hold a referendum on the plan.

As I write (having just filed my report for Drivetime on Tuesday evening) you can’t say for certain if the Greek people are ever going to get to vote on this referendum or not. The Greek leader could find himself subject to some very Roman justice from among his own allies such is the level of disapproval over his solo run.

But if they do hold a referendum what are they really voting for?

Will it be to save Papandreou’s political skin? A snap election on support for his policies would have been the more normal political route to seeking a mandate. But he and his party could only look forward to a Fianna Fail style drubbing. By presenting the people with a choice as stark as exiting or staying in the Euro could he secure his future?

Alternatively, the suspicion around Europe’s capitals this evening is that he has leveraged a fast one. At each turn he has bettered Greece’s position. “No default” became “Selective Default” became “20% Write Down” became “50% Write Down”. Could calling a referendum be a way of improving on the terms of the austerity even further between now and a vote?

Or perhaps, just perhaps, Papandreou could be a democrat who believes that before signing his country up to at least 9 more years of being bossed about by the troika that Greeks should have a say. Speaking to Sean O’Rourke on the News At One this afternoon the Greek newspaper editor Nikos Costandara suggested this kind of grand democratic gesture was always in Papandreou’s psychological make-up. He didn’t mean it as a compliment.

I am conflicted on whether this is too high stakes a game to allow the people to have a say right now or if Papandreou is to be applauded for doing precisely that. As of this evening nobody will want to invest anything in Greece, a run on their overstretched banks is not beyond the bounds of possibility, Italy’s position is disintegrating before our eyes.  But if they get to vote (and if Papandreou intends the result should be binding) then the people would know that they are truly sovereign. Might they not rise to that challenge?

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