New York Times
November 1, 2011
The Greek prime minister announced that he would seek the opinion of his people by calling a referendum on the price they would have to pay, in the form of austerity measures, to get a second European Union bailout. Does this mean the end of the euro zone? Well, at this point a happy ending for the euro bloc seems increasingly unlikely.
First, contrary to what the headlines led us to believe, the details of the agreed-upon E.U. bailout package weren’t set in stone. That means it was unlikely that this deal would actually have saved the euro anyway. Second, the referendum would give the Greek people the option to choose between more austerity measures directed by the E.U. bailout or to roll the dice and continue on the current path. At this point, it looks as if they will reject austerity. That vote — or even the signal sent by the referendum announcement — then increases the risk of a default.
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