Papandreou for President 2012?

Greece will soon resolve its political crisis by naming a new Prime Minister, but the country’s fiscal crisis remains. Faced with huge budget deficits, Greece is still at risk of defaulting on its national debt. After working out a deal for austerity measures in exchange for a loan from the International Monetary Fund and other Eurozone countries, Prime Minister George Papandreou  was accused of reneging on the deal after he called for a referendum on the deal.   The Greek people would have voted on the bailout loan and the accompanying austerity plan, which would require enormous cuts to government spending.  Though Papendreau has been criticized as ineffectual, he was only forced to resign after he announced the referendum.

Papandreou will not be Prime Minister for much longer. Having been born in America, he could consider coming here to run for President. He may have trouble running as a Socialist with a track record of fiscal calamity, but at least in America, he would not be forced out of office for suggesting that citizens have a say in these fundamental questions about the kind of society in which they live.

The Prime Minister came to office two years ago, promising his constituents fiscal stimulus. As Greece’s budget woes led to fears of default, Papandreou was forced to support severe austerity measures. The plan was deeply unpopular with Greek citizens, who took to the streets in massive protests. Even the country’s conservative party initially opposed the austerity plan.

The protests, however, were not what cost Papandreou his job. The Prime Minister’s greatest sin was planning a referendum on these drastic spending cuts, rather than having the entire economy changed according to the demands of unelected international institutions. The new Greek Prime Minister will likely be a “technocrat,” a non-politician expert who can implement the government cutbacks without worrying about the inevitable public backlash. There have been reports that the new leader will be a former European Central Bank official.

For countries that need international bailouts to deal with fiscal deficits, the terms of their government downsizing are dictated by those providing the money. The process often feels illegitimate and undemocratic. The Greeks understand this.

Author Naomi Klein and others have chronicled the history of countries in crisis having these radical changes forced on them by international financial institutions, like the IMF. Klein suggests that crises or “shocks” are manipulated or manufactured to force countries into the austerity agendas that come with bailout loans. Multinational corporations reap the profits of privatization, while those who depend on help from the government are left to the mercies of the market.

Papandreou’s idea was to ask his people if membership in the Eurozone is worth this price. His referendum would have been a classic example of democracy, taking important decisions directly to the people, in the country where democracy was born. Other countries are facing similar austerity measures. Italy may be facing a similar fiscal crisis. To address these problems, the EU is considering a crack down on the rating agencies that hold so much influence over the stability of national debts.