Greek Prime Minister George Papadreou played a game of political chicken and lost big.
After a rescue plan for Greece's faltering economy was cobbled together with auserity measures being imposed on the Greeks, Papadreou decided to move the political heat off his government Monday and place it on the shoulders of the voters. He called for a public referendum to accept the deal.
The thinking likely was that Europe wouldn't allow Greece to default and if it was clear that Greeks didn't like the terms of the rescue, the nation could get a better deal from its eurozone mates. And if the Greek public did the unexpected and voted to approve the plan, he could always say it was the will of the people and absolve himself of any repercussions of its implementation.
At the G-20 conference this week, however, the Europeans, led by Germany and France, didn't budge, and reports were that the eurozone was willing to expel the Greeks if necessary. Papadreou, who is losing his Socialist Party strength in increments back home, has a reputation as a political gambler, but his own government forced him to fold his cards on this bluff. The vote was called off Thursday.
The one good thing in all this eurozone malaise is it appears the United States had no intentions of grabbing a checkbook to contribute to the Greece rescue, even though a crisis that was deterimental to America's biggest trading partner would hurt the U.S. as well.
But with Congress under the gun to come up with a deal that would trim at least $1.2 trillion from the $14.8 trillion national debt over a 10-year period, our nation was in no position to help out, even if we wanted to. Europe will have to find other means of raising the $1.4 trillion it will need to ante up in the rescue plan, which would forgive half of Greece's debt and impose strict, unpopular austerity measures on the country.
Reports say the Europeans are looking East for that financial help, specifically from the Chinese. While some may argue that it will give China more influence in Europe and lessen that of the United States, from a balance sheet perspective it makes sense.
Meanwhile, President Obama, who has been front and center of the dance floor at the previous G-20 meetings he has attended, is pretty much sitting in the wallflower seat at this one, able to express his opinion about the dancers but unable to buy a dance ticket himself. With the sputtering U.S. economy and an uncertain election ahead, he's learning a lesson other one-term presidents have discovered: Foreign policy success helps at the ballot box only when voters are confident on critical domestic issues.
The eurozone is still in some turmoil over the fiscal problems that could erupt, and the increasingly unpopular Papadreou, who's as much in debt political capitalwise as his nation is in real money, is refusing calls to resign.
In the end, he's only putting off the inevitable and dragging his country and Europe down with his political ambition. A gambler should always know when to leave the table.
-- The Albany Herald Editorial Board