Papandreu has manoeuvred successfully against both Sarkozy and Merkel and the Greek people.

Across the sea are Kalymnos and Leros islands. There is no visible cargo boat traffic. Is there inertia across our neighbour, Greece? Or is it like this in this time of the year? This makes me wonder if there is any data on “seasonally adjusted cargo boat traffic in Greece”! There is no need for data, anyway. Everyone knows that Greece is in a recession for years. We do not need data on cargo boar traffic on two small Greek islands to validate the recession. These lines might push the limits of courtesy given the circumstances facing our neighbour lately. So, let me ask another question: How would Greek people vote if Papandreu actually held a referendum?

A wise manoeuvre

We have to admit that Papandreu, in whose shoes no one including the opposition leader would like to be, has manoeuvred successfully against both Sarkozy and Merkel and the Greek people. While you are reading these lines, the meeting in Cannes of Papandreu, Merkel, Sarkozy, the new President of the European Central Bank, Draghi, the President of the IMF, and some European Union leaders will be over. Interestingly, Papandreu, the leader of a country that went default, raised his bargaining power during the meeting. How could the opposite be possible, anyway?  Markets had responded positively to the new bailout package announced after the number so-and-so meeting of the Eurozone leaders on last Thursday. This positive reaction lasted only one and a half day. On Friday afternoon, the positive atmosphere faded out and was replaced by the judgment that the details of the new package are uncertain. Moreover, the success of the package depended on the supports of third party countries, China in particular. Statements heard from China’s side, however, were not much pleasing. In consequence, stock market indices started to fall in late Friday throughout Europe. This trend continued also on Monday.

On Tuesday, markets faced a complete shock via which Papandreu earned a bargaining power: As he announced that he will hold a referendum in Greece on the bailout plan for the country agreed by Eurozone leaders, all stocks markets, European markets to begin with, faced large downturns. German stock market, for instance, fell in one day by 6 percent. Alarm bells went laud in Italy, another big fear of Europe. Tuesday morning, Germany’s ten-year state bonds were traded with 1.85 percent interest. The mentioned rate for Italy reached 6.2 percent. Meanwhile, rates fell by almost 2.5 percent in the US. In Turkey, interest on benchmark bonds in the secondary market went slightly above 10 percent and stock market fell. Currencies of many emerging market economies lost value against foreign exchange.

I do not know whether he will stick to his decision to hold a referendum after the meeting in Cannes, but, Papandreu had stated clearly before heading to Cannes what he will ask Greek people in a possible referendum: "Do you say yes or no to Euro? Do you say yes or no to Europe?" The process onwards will be in the hands of the Greek people. Public opinion polls conducted before the referendum stake of Papandreu revealed that Greek people opposed to the new bailout package. Let’s wait and see whether this perception will persist after Papandreu's clear questions. If so, the whole world will definitely go into a chaos. There is another certainty: Minister of Finance of Greece who has been hospitalized several times for consecutive gastric diseases will take a deeper breath.

This commentary was published in Radikal daily on 03.11.2011