Eurochaos: Greeks Want To Vote, Germans Fear Concessions To Chinese For Cash, Fistfights In Italian Parliament

Is the European Union about to collapse? It’s too soon to call the coroner. And the realities of the financial crisis may force Europe to hang together rather than hang separately. But the political divisions seem to be growing. Greece stunned European leaders today by calling for a referendum on the bailout plan agreed to by EU leaders last week. European leaders like Germany’s Merkel must be furious: they are helping to foot the bill for Greek insolvency and now the Greeks are going to vote on whether they want the deal. Given the widespread unpopular of austerity measures in Greece, I don’t think we should assume the vote would be a favorable one. For their part, the generally quiet Finns have declared that Greece is basically voting on whether they want to remain in the European Union or not.

Italian legislators discussing pension reform

At the same time, Germany’s Der Spiegel reports in a headline: “Warnings Mount against Concessions to China.” Hans-Peter Keitel, President of the powerful Federation of German Industry, is very concerned about reports that Euroleaders might be granting concessions to China in exchange for financial help in the stabilization fund. “If we in Europe organize the stabilization of the euro in such a way that we allow states to exert political influence from outside, then we are making a tremendous mistake,” he told the German publication. But the Financial Times believes that such political concessions may be inevitable. “Beijing will exact a price proportional to the desperation exuded by Europeans,” the paper said in an editorial.

And then how could you have a political crisis without added drama from the Italians? The Italian president is getting questions about whether the Italian government can function at all. Two members of parliament got into a fist-fight during a parliamentary session. The Italian government has written a 17-page letter to its European partners in the hopes of preventing a financial collapse due to inaction. Italy is the third largest economy in the Eurozone. But its politics have never caught up with its economic size. Italian Prime Minister Berlusconi reassured the world: “Italy isn’t Greece. There won’t be civil unrest here.”