Hi °C | Lo °C Greece prime minister George Papandreou sprang a Halloween horror when he announced a referendum to decide if his country will accept the terms of the bailout deal agreed in Brussels last week.
So why would Greek voters decide to reject the deal? Here's some possible reasons:
• Public sector wages have been cut by 15%. An additional 20% cut is in the pipeline.
• Wages of employees of state-owned enterprises have been cut by 30%. A further 20% cut is due.
• Pensions in the public and private sector have been cut by 10%. An additional 4% cut is coming.
• 70% of public sector contract employees, around 85,000, have been made redundant.
• Total public sector employment has been cut by 10%.
• Spending on pensions, illness and drugs has been reduced by €3.4bn (£2.9bn), 1.5% of GDP.
Analyst Holger Schmieding estimates that this is "the harshest austerity programme in a Western economy in the last 60 years".
If this is supposed to be a bailout, there has to be a high chance the Greeks will reject it.
Of course, one can argue that the pain would be even worse without the EU/IMF assistance.
But plebiscites are dangerous and unpredictable things. Often people vote in them simply to punish incumbent governments, regardless of the consequences.
But would anyone argue a plebiscite is a good way to decide policy in the midst of a raging economic crisis?
