Greek Referendum: Democracy 101


After Greece joined the European Economic Community (1981), ratified the European Union Treaty (1992), and adopted the Euro currency as part of the EU Monetary Union (2002), they gave up their sovereign right to print money, or to spend in excess of limits set by the European Central Bank.

Although Greece was required by the Central Bank to maintain a Balanced Budget, and to limit their National Debt to no more than 60% of GDP, the Greeks failed to control spending, and their Debt rose well beyond the EU limits, to a crisis level.

Under the recent Greek Bailout Plan, promoted by the leading EU powers Germany and France, Greece was required to cut their budget in consideration for loan forgiveness and other assistance.

There was one small problem with the bailout plan: someone forgot to ask the Greek people if they approved. In the birthplace of democracy, the EU attempted to dictate from the top down, ignoring the principle that consent must come from the governed.

If Greek Prime Minister George Papandreou had allowed the EU to proceed without submitting a referendum to the people, seeking their approval, and draconian spending cuts were made without regards to the wishes of the people, a revolt may likely have erupted in Athens. It is naïve to assume Greeks would simply allow the Central Bank in Frankfurt to reduce their jobs and pensions without a fight.

Papandreou wisely realized the only way benefits could be cut and taxes can be raised in Greece is with the consent of a majority of the people. While the referendum poses risks, such as a vote that disapproves of the EU plan, observers must recognize that the absence of democratic participation would have led to an even greater risk of civil war, and at the very least, the violent removal of George Papandreou and his government.

The absolute best case scenario is for the Greek people to approve of the referendum so the EU plan has the will of the people behind it. We should not criticize George Papandreou for resorting to time-honored Greek democratic principles to solve this crisis.

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