11/03/2011 12:07 EDT | Updated 01/03/2012 05:12 EST

Greece Is Just the First to Fall


It's understandable why Greek Prime Minister George Papandreou (born in the U.S, and attended high school in Toronto) wants to hold a referendum before implementing draconian financial restraints that will cause riots, clashes with police, car burnings, acts of vandalism and anarchy.

He knows what has to be done, but undoubtedly supposes that if a majority of Greeks support austerity measures, that will neutralize hostility on the streets whenever the government takes unpopular but necessary action.

Understandable, too, is the outrage being expressed by the rest of Europe at Papandreou apparently reneging, or equivocating on what was assumed to be a slam-dunk decision.

So once again it's back to the drawing board... or maybe not.

By "going to the people" Papandreou proclaims he is practicing the essence of democracy. The fishhook is that if Greeks reject the deal with Europe, it virtually means that Greece is opting out of the European Union and dumping the euro in favour of going back to the drachma. Either way, wretched financial times are ahead for Greece.

If so, it'll be the first (and least important) domino to fall, but will almost inevitably lead to defaults by Italy, Spain, Portugal.

U.S. President Barack Obama is in Europe to add his two cents to the debate which, the way Europe is heading, could result in a worldwide recession. Again.

Looked at from another viewpoint, there's no way any bailout plan is a long-term solution to Greece's economic woes, brought on by shameful abuse by over-indulged unions, exorbitant pensions, cowardly and deceitful politicians cooking the books, and greedy, self-absorbed citizens.

So whatever Greece's leaders agree to, likely won't be fulfilled, and will be merely Band-Aids until next time.

Now an election looms, as confidence in Papandreou and his PASOK socialist party is at low tide. If a vote of no-confidence ousts the government, will things change for the better? Unlikely. The culture remains constant.

Greece has shown little sense of responsibility or willingness to endure necessary sacrifices. So be it. Will the Greek people support Papandreou in a referendum, and thus continue using the euro as its currency, as 17 of the European Union's 27 countries do?

If I were a betting person (and sometimes I am), I'd bet that a referendum would favour Papandreou, if only because the alternative would be so financially catastrophic.

If the Greek people vote not to accept stern measures in order to remain using the euro, and getting eight billion euro as Band-Aid bailout, then say goodbye.

Let 'em go. Let 'em make their own way until they change their minds and rejoin the club and adhere to existing rules. If that means another recession, or even a depression, better now than at some time in the future when damage will be even greater.

Canada as well as America will be hurt if (when) Greece officially defaults, and (or) Germany and France get fed up with all the hanky-panky and cut their losses.

No matter what, Canada will be better off than most countries -- thanks to our banking system which is widely recognized as the world's best -- thanks to Jean Chretien and Paul Martin (as finance minister), and now the sensible Harper government with Jim Flaherty as finance minister.

President Obama's contribution to emergency discussions in Cannes seem ironic, especially when he has contributed to the economic crisis in his own country, and his own future is threatened in next year's presidential election because of his failures.