“Wanted: a temporary prime minister for small eurozone country in distress.  Must be an economist with international background, fluent in Greek. No political experience required.”

This was the joke in a November 6, 2011 Financial Times article titled “Humiliating End to Greece’s Social Reformer”.   This article, like many others, castigated soon-to-be former Greek Prime Minister Papandreou’s surprise call for a nation-wide referendum on the most recent bail-out deal brokered with the EU and the IMF.  A number of articles in other worthy newspapers referred to the move as “boneheaded” and “unbelievably short-sighted”, among others.  He was further taken to task at the G-20 summit in Cannes by French President Sarkozy and German Chancellor Merkel and warned that Greece would not receive another cent if it didn’t approve this aid package – and soon.

First, I should say that I am no fan of how the Greek’s have managed their economy since…, well, perhaps I don’t know of a time in the last 2,000 years when the Greeks were known for a well-managed economy.  All the analysts are correct:  the economy is uncompetitive, corruption is rampant, tax evasion is the norm, and the Greeks have a penchant for saying ‘yes’ to everyone then arguing endlessly over the details then, in the end, blaming everyone but themselves for their plight.   They defend a social / economic model that they themselves hate and should probably replace communism as the model for how not to run a state.  They have defaulted on their sovereign debt 5 times since declaring independence from the Ottoman Empire and the 6^th is looking more likely every day.  Further, Papandreou is no angel and deserves most of the criticism laid at his feet.

That said, I sympathize with Papandreou’s call for a referendum.  He was stuck between politicians from all parties (including his own) refusing to set aside personal and political differences and get behind a common plan – and an enraged populace unwilling and unable to absorb further austerity measures.  By calling for a referendum on the bail-out, he was forcing Greeks to make a choice (I am using the term ‘force’ because voting is mandatory by law in Greece).  What do they want for their future?  What kind of society do they want their children to live in?  And if the answer was ‘no more austerity – no more Euro’ then, so be it.  Despite hysteria to the contrary, a messy Greek default and exit from the Euro zone will not bring down the global economy or even the rest of Europe.  If the answer was ‘yes – let’s fix the mess we are in” then he would have had a legitimate mandate to make the tough decisions and simply ignore the protesters and nay-saying politicians.

As it stands now, a new caretaker prime minister and cabinet might sooth the markets and get the bail-out package approved, but it will not be able to address the fatal flaw in all the proposals thus far – they do not include a ‘light at the end of the tunnel’ nor a path toward competitiveness and growth.  In other words, they are missing a ‘hope factor.’