Bloomberg: The Referendum Plan Will Not Lead To A Greek Tragedy.

Beijing time November 2nd, the commentary program of Bloomberg's "referendum program is not a Greek tragedy".

Greece is a country with drama and democratic civilization. Now, though deep debt Predicament, but this small euro zone country has not disappointed the whole world. On the evening of October 31st local time, Greek Prime Minister George Papandreou called on Greece to conduct two high-risk elections. One was against parliament, asking the parliament to vote on whether or not to trust his leadership before the end of the week; the other was a referendum on the Greek rescue clause reached at the EU summit last week. It is understood that the referendum is likely to take place at the end of this year.

It is clear that this highly dramatic scene in Athens's political arena is not expected by European leaders ready to participate in the summit of the group of twenty Cannes, and enough to shock Papandreou's party legislators. It is reported that some members of Papandreou's party are now asking Papandreou to step down as soon as possible. In November 1st, influenced by Papandreou's move, the global stock market fell, the euro fell sharply against the US dollar, and Italy's national debt also plummeted.

There is no doubt that Papandreou's bet is too risky. Papandreou's unexpected appeal is no more. market Within expectations. If the Greek people voted to reject the package, Greece would be in disorder. Default Or the euro zone will have to be launched, and many European banks will go bankrupt. What follows will be the end of the world: the collapse of European financial markets, the soaring cost of sovereign borrowing and the collapse of banking industry, and the fall of the United States into the abyss of a new recession.

Of course, we can not say that because Papandreou is too risky, he must be wrong. The Greek people have the right to make decisions for the most important things in their lives. Perhaps more importantly, the Greek referendum plan will eventually force Europe to go all out to solve the two-year sovereign debt crisis.

In fact, we must admit that the latest aid plan reached by EU leaders on the euro zone sovereign debt crisis is far from meeting the many needs of solving the crisis. According to this new plan, the euro area will expand the scale of the European financial stability assistance fund to 1 trillion euros, and in terms of banking capital restructuring, countries have reached a 9% level capital adequacy agreement. However, the summit did not agree on 50% of Greece's debt write downs. However, the vast majority of the industry believes that 50% of the write down target is not easy to achieve.

As we have mentioned before, European leaders are clearly inadequate in formulating aid programs, especially with regard to Greek sovereign debt write downs. Personally, I believe that in order to alleviate the debt burden of the Greek government, the scale must be close to 70%. In addition, the European financial stability fund needs at least 3 trillion euros to ensure the smooth progress of the capital restructuring of European banks, as well as guarantees for Italy and other member states struggling in the debt vortex.

According to media reports, the latest poll released last weekend showed that 60% of the respondents in Greece did not feel good about the EU rescue plan. Papandreou hopes to achieve two goals through a referendum: one is to improve the terms of rescue and the other is to regain the recognition of voters. In this way, Papandreou will not allow this referendum to become a continuation of fiscal tightening.