It reveals the changed nature of the global economy when China arrives at the G20 in Cannes being spoken of as a possible saviour of the eurozone, which continues to be mired in an economic meltdown and has now also been plunged into a political crisis as a result of the recent announcement by Greek Prime Minister, George Papandreou, that Greece will hold a referendum to decide on the latest bailout package on offer as the Greek economy continues to languish in a sea of unsustainable and ever increasing debt.
The outpouring of anger in Paris and Bonn in response to the announcement of a Greek referendum has been instructive. It indicates the extent to which both Sarkozy and Merkel underestimate the political and social precipice which Greece is currently teetering on, along with their disdain for the Greek people, who find themselves being punished for the sins of a global economic system predicated on unsustainable levels of debt and consumption.
The political pressure that Papandreou has come under, caught between the hammer of the banks, financial institutions, and their political enforcers in Paris and Bonn, and the anvil of the Greek people, left him little option other than to shift responsibility for accepting or declining the latest bailout package with his own people. It was the Greek people after all who elected him to power, not the banks, financial institutions or the French and German governments.
In announcing plans to hold a referendum on the latest bailout package on offer, Papandreou has revealed the impact of the resistance of the Greek people to the austerity measures that he's already implemented at the behest of the advanced eurozone economies. Greece had become the whipping boy of the eurozone crisis, which it should not be forgotten is a symptom of the global economic crisis, with German Chancellor Angela Merkel in particular demonstrating an alarming bent for wielding a big stick to the Greek economy. Her approach has only succeeded in exacerbating the crisis and ramping up social unrest within the country as a result, responsible for placing more pressure on the Greek government and ultimately influencing Papandreou's decision to hold a referendum.
Papandreou's lack of leadership up to now has also been a major a factor in the deepening quagmire of economic and social convulsion to afflict his country. Simply put, in a situation of extreme economic crisis such as Greece is experiencing, politicians have to make a hard choice between governing on behalf of their people or the interests of the international banks and financial institutions that are demanding payback. No middle ground exists. It has to be one or the other. Thus far Athens has placed a priority on appeasing the latter rather than the former. Papandreou's referendum proposal is an admission of his mistake in having done so. However, it doesn't go far enough in redressing the damage already done.
Greece is in a far stronger bargaining position than either its current government or eurozone partners appear to appreciate. If Greece were to leave the eurozone the value of the euro would likely plunge as markets respond to the first sign of its disintegration. This would have a deleterious knock-on effect throughout the eurozone and beyond. The interdependence of the global economy is such that like a brick wall, the loss of even a single brick at the base threatens its complete collapse.
The lack of political leadership being shown by the Greek PASOK government is also in evidence when it comes to France and Germany, whose onerous approach to the Greek crisis has been driven more with the desire to appease their respective electorates than provide a workable and sustainable solution. Merkel's stubborn refusal to countenance the involvement of the European Central Bank as a lender of last resort reflects that when push has come to shove she is willing to pull up Germany's economic drawbridge at the expense of the future of the eurozone project - more concerned with the impact on domestic interest rates if the ECB played a greater role in the crisis than on European stability under the status quo.
The political and economic test of European stability and cohesion in the face of economic crisis has already failed. National boundaries and particularities have superseded the project for unity and harmony across a continent that was devastated by two cataclysmic wars in the 20th century.
Now, at the start of the 21st century, Europe increasingly looks like a continent in which the fault lines responsible for two world wars in its recent history are re-emerging rather than disappearing.
Papandreou may not survive long beyond his dressing down at the G20 in Cannes, especially with the defections that are taken place within his own cabinet. The question is who and what comes after him. The prospect of a military coup should not be underestimated. In Greece once again it may well come down to a straight up fight between the people and the military for the nation's future.