So the Greek Government want to give their people a referendum? How very "democratic". How very wrong.
There's a time and a place for all kinds of different aspects of democracy, and referenda, a form of direct democracy, only really stand relevant in one place; a referendum is needed when the law of the country is changing as to how the people are governed, or interact with being governed. Outside of that, it is used as a tool by governments crying "democracy" to get their own way.
Take Iceland. They were loaned money by the UK and Denmark to get them out of a similar spot to which Greece find themselves in, to be able to fulfil their legal obligation to provide a safety net for savers in their national banks. Then they held a referendum to ask the people if they wanted to pay it back. This is both democracy and not democracy. Asking people what they want, but on a subject where the people (unfortunately for them) have no right to a say without bringing in a wider audience...namely the public of the countries that loaned them the money to get them out of their mess.
This is what is happening now with Greece. Papandreou, realising that he is on a knife edge, if he hasn't completely killed all chances of his party's re-election in 2013 already, has turned to a referendum to hold a politically cowardly position. To the EU he can say that he wants to get this situation resolved as quickly as possible, to the people he can say this is their opportunity to put a stop to the austerity plans that will be increased.
What he doesn't care about is the ongoing effect of this political cowardice, and those that are championing this route of "democracy" are out of touch with how much democracy has gone on to this point.
The people of Greece don't need a referendum to make it clear that they don't like the route their government is taking, they've made that clear already. But then who would like it? Higher taxes, cutting services, this isn't a time to be asking turkeys to vote for Christmas.
But let's say that the pro-referendum people are right, that it's correct to follow through with this most obvious of direct democracy. We have no date, we have no question, we have no clue about where this is going. In the mean time Italy is going to the brink, and the question has to be asked as to how many other countries are still under threat of being pulled under.
It could be weeks, if not months until the referendum is actually put to the people. Will it be about accepting the bailout or not, as Papandreou has suggested, or will it actually have meaning? I say this because simply phrasing the question as a "accept this or not?" question doesn't solve the problem of stabilising markets. So you don't want the deal, but you do want to stay in the EU? Or don't you? Or is it just the Euro you want out of? Or do you want the money but not the austerity? Do you want to have your government find another route out of this without leaving the Euro?
Edit: I've just read that there are assurances this referendum isn't about the Euro. Perfect. A pointless referendum that serves only to weaken the system as a whole. The only problem with Papandreou shooting himself in the feet over this is that he's using piercing rounds, and lying on his back with his feet facing towards Italy.
A referendum, blunt instrument as it is, will not provide the answers that can accurately portray the will of it's people. Condensing the options down to two extremes may be best, but will also risk ignoring the preferred wishes of a more moderate majority.
Then once the referendum is done, what next? Hopefully it would be an issue of simple constitutional due-process. But the reality is that a referendum like this is a political football, and it is also non-binding until the parliament and president of Greece sign it in to law. Will the opposition play ball? Will the president? One PASOK MP has resigned, others have said they will if this referendum goes ahead. If this is true then the government would no longer have a majority to push the referendum result through, regardless of how together the cabinet may be on the subject.
It should be as simple as not going against the wishes of the public and may well go that way, but if the referendum is put in as vague and potentially extreme way as it seems it must, then there is plenty for those in power to argue about it's very legitimacy.
Even if there was an option on the question paper that led to immediate action, the politicians could still try to use it as a further bargaining chip while the Euro burns.
And this is the reason why Germany and France haven't already jettisoned Greece. A lot of stability for the Euro relies on people being happy to use it. If Greece is able to be got rid of, or leave when the going gets tough, there are serious questions over the value of the Euro to financial markets. It would seem that the high powers of the Eurozone would want the Greece problem to go away quickly, but they're powerless to make this happen without undermining their own power base.
If Papandreou wanted to do the best for Greece then he would be a real leader and make decisions, ideally based on some kind of knowledge of what his people want through the perfectly adequate representative structures that exist in his country. He could soldier on, or he could go down a different route...and he could do either of those today.
A referendum just draws this out, doesn't necessarily provide a definitive answer at the end, and damages all involved while indecision and bickering takes priority. This is why direct democracy simply isn't the answer to all of our political ills, and may in this case actually be fuel on the fire.