Greek referendum a trap

The Chairman of economic advisory council to the French government and professor at Paris’ Sorbonne university, Christian de Boissieu, has accused Greek Prime Minister Georges Papandreou of putting forward “a trap” by calling for a Greek referendum on austerity measures agreed to as part of its bailout by other Eurozone members last week.

Speaking at the Chartered Financial Analyst (CFA) Institute’s annual investment conference, de Boisseu cast doubt on the proposition of a referendum within Greece, and warned any such referendum should be on whether it stays in the Eurozone, not on bailout measures.

“I’m not sure how we are going to get out of this mess by the idea of a referendum in Greece,” said de Boissieu, who heads the Conseil d'Analyse Économique in France.

“We need to find an answer I’d say, it is a trap put forward by Mr Papandreou.”

“As a democrat, it is difficult to criticise the idea of a referendum. But at the same time, it is astonishing that five days after the Brussels agreement we have to reopen the debate,” he added.

Rather than voting on the bailout package for Greece announced by Eurozone policymakers Thursday 27 October, which entails severe austerity measures for Greece, de Boissieu said a referendum there should be on its Eurozone membership.

“The likely answer is yes”, he said, referring to the likelihood of a positive response from the Greek population over its future within the currency union.

But such a referendum, if it does take place, should happen sooner rather later, de Boissieu said.

“For the market, three months is eternity.” A referendum should take place in December rather than January, he added.

“We have already lost a lot of time on the markets,” he said, recognising market patience with the time taken by EU policymakers to reach concrete decisions is wearing thin.