Greece, Democracy and the Markets

You can make a case that the decision of the Greek Prime Minister to call for a referendum on the Euro-deal was an act of lunacy or a stroke of genius.

Certainly the manner in which it was done has sent the markets into a tailspin and terrified most of Europe's heads of government.

If the Greek government does call a referendum on the package, gets it out fo the way quickly, and wins it, the results would be almost entirely positive. The fact that there was proven to be public support for the package, including the tough medicine to which is part of it, would make the necessary reforms much easier to carry out. And the precedent of involving the public in such decisions would be very positive.

However, the way the proposed referendum appears to have been sprung on everyone could perhaps have been better handled. And if it fails the results for Greece and some of the other Eurozone countries, and those who export to them - like Britain - could be very bad news.

I can see this one is going to run and run ...


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