The day the Greeks vote yes or no

So you thought populist calls are strictly a Pakistani phenomenon? The recent call by Greek PM George Papandreou for a referendum on EUs latest bailout deal deserves to be marked as a fine epitome of what populist pressures can make an official do. The last week of October saw desperate attempts by the EU to prevent Greece from plunging into default by bargaining with banks to write off 50 percent of that countrys debt held by these institutions. The EU hopes that this measure will bring down Greeces debt to 120 percent of GDP by 2020, a fall from the 170 percent it is expected to level, by next year. In addition to this, further bailout funds of about $180 billion were also proposed for Greece. Eyeing the new bailout proposal as a Pandoras box of further austerity measures including job cuts, higher taxes, and pension and wage cuts, Greek citizens are far from happy with the measures suggested by the EU, thus prompting the Greek premiers call for a referendum. The mere call for a referendum - ironically on Halloween - was enough to stir global financial markets which had factored in some positives from the EU bailout plan only four days back. Not only did the euro slump to a three-week low, but US and European shares tumbled as well. The surprise decision by Papandreou, which came as an alarm even to EU leaders, is being criticised for possibly tilting the global economy closer to a recession as question marks over the sustainability and strength of the eurozone resurface, and as consumer confidence douses further. While a date for the referendum had not been decided, until further details are dished out, the world is likely to continue to suffer from the ensuing uncertainty. As for the outcome, a negative vote on the referendum should not be expected to be a shock factor. Bloomberg quoted this week, "In a...poll for the Greek weekly To Vima, the majority said the deal should be put to a national vote, with 58 percent calling it "negative" or "probably negative." The consequences of such an outcome will be far from pretty for both the EU and Greece itself. Default on Greek debts would be inevitable which could either elicit the countrys exit from the bloc - a direct blow to the eurozones strength - or it could set fire to further speculation regarding sovereign debts of other EU countries. A vicious circle is bound to ensue in the struggling bloc of countries that would douse the confidence of investors and consumers and dash the already dwindling hopes of recovery. Simply put, chaos seems to be on the cards. Yet, one wonders if the Greeks are all to blame. Austerity measures have so far served to steer the economy further towards a recession, contributing to a further deterioration of the fiscal deficit, and consequently of public debt. Further, to what extent the proposed austerity measures will be implemented, or whether they will be implemented at all, remains a mystery. Either way, the referendum is crucial for Greece and also for EU which is struggling with its members ailing economies. Even though a yes vote may proffer temporary relief, the bloc members need to come up with realistic and sustainable measures to put their economies back in order.