It is hard, at the time of writing, to know what to make of the suggestion that there should be a referendum in Greece on the terms of the bailout agreed by the eurozone governments. The idea was floated by the Greek prime minister George Papandreou on Monday, having not been mentioned at the eurozone meeting itself the previous week, and then just as rapidly dropped in the face of complaints both from other eurozone governments and within the Greek government itself. As far as I can tell at present, the idea is dead, but it could come back to life depending on what happens in today’s vote of confidence in the Greek parliament.
The case for a referendum is strong. Greece is being asked to make substantial changes to the way it runs its politics and to the way it relates to the rest of the European Union: either of these is classic referendum material. Add to that the prime minister’s frustration at the main opposition party supporting the overall need for austerity but criticising every single step that austerity requires, and his desire for a referendum is clear. Greek politics and society is struggling under the weight of the consequences of its failure to make eurozone membership work. A Yes vote in a referendum would confirm the country’s willingness to keep on the difficult but necessary European path; a No vote would lead to an even more difficult and uncertain future elsewhere. A Greece that rejected the terms agreed with the other member states could not remain within the euro or the EU. Its economy would crash and its people would take no money with them as they left.
The choice in front of Greece is a stark one, between a bad option and a truly terrible one. But is a referendum the right way to make this choice?
The case against a referendum is that it will bring about the chaos that the decision is itself supposed to prevent. If the aim is to prevent wealth from leaving Greece and to maintain an orderly Greek economy, a referendum campaign will provoke capital flight and economic disorder in its own right, regardless of the final outcome. In effect, the simple decision to call a referendum invites the consequences of a No vote, whether or not the people vote that way. It is not cancelling the referendum that denies the Greek people a choice, but holding one that would do so.
Avoiding the financial chaos that would come with a referendum campaign does not, however, address the case in favour of a referendum, namely that big decisions are being taken that the people ought to assent to. The lesson is that reaching an agreement at a summit should not be taken as implying that the people whose interests are supposedly represented at that summit actually agree.
The conception of the European Union as a union of states, where national governments get together and agree things, does not correspond to reality. The EU is better thought of as a union of states and citizens, and if those citizens are not themselves involved in the decision-making of the union, it should not be a surprise if agreements among the states alone fail to stick.