Confronting the Meta-problems of Democracy

Prime Minister Papandreou originally presented this speech as the Keynote Address to the IADC's 2015 Midyear Meeting held in Marco Island, Florida on February 18, 2015.I. Where Greece was and is today - Bond SpikesWHEN I first received your invitation - in mid-September of last year - there was an accepted view of the Greek and euro economic crisis that we were making real progress. The ten-year Greek bonds were yielding about 5%. Today, it seems we are back in crisis mode. One telltale sign is the fact that yields earlier this month were as high as 11%. (See Figure 1.)As bond markets saw that we might go - as we finally did - to a snap election in January, there was a huge spike in bond yields. What was this all about?Voters in Greece frustrated after six years of recession and five years of austerity, which has cost us a loss of 25% of our GDP, decided to change course. A new government was elected by promising completely different policies. But is it that easy? Is it a matter of simply changing a government? Or asking the people through a referendum which I attempted to push through?That would be a triumph of democracy.When I called for a referendum, I was immediately summoned to Cannes, where the G20 was to meet. Nicholas Sarkozy, then President of France, who chaired the G20, warned me, "The markets will go haywire." He was dead against the referendum. No, the people could not have a say!No wonder our citizens around the world mistrust politics. They see politicians as impotent and believe that the average citizen has little influence. Most believe that little can change and that everything is futile. Politicians around the world are getting blamed. But are they to blame? Or are they getting a bad rap? Let me take you on a trip through some of my experiences.II. Personal StoriesBefore I get into the gory details of the crisis in Europe, let me introduce myself- and why I feel strongly about the future of our democracies- by way of some personal stories.I was born in St Paul, Minnesota in 1952. We soon moved to California, where I grew up. My father fled from a Greek dictatorship in the 1940s and got a PhD in economics from Harvard. The family moved to Berkeley when he became head of the economics department. As an interesting side note, my father actually became a U.S. citizen and served in the U.S. Navy in World War II. In the early 1950s, he was head of Hubert Humphrey's campaign in the state of Minnesota.But I can assure you, growing up I was well aware of my Greek identity. I heard plenty of bedtime stories from my grandmother about Greek gods. I was always reminded of my Greek heritage because every time one of my teachers called out .my last name half the class would burst out in laughter.No, I was not a Jones or a Smith. It was a time when ethnic names were not popular. So my classmates usually changed my name to GP or Pappy or even Curious George, because my protruding ears reminded them of the famous monkey. Actually, I rather liked the Curious George nickname. He was one of my favorite characters, always trying to discover and always getting into trouble. Maybe it was a sign of what was in store for me later on in life.I first travelled to Greece around six years old. Starting out in California, my parents threw the four kids, three boys and one girl, into the back of the station wagon-no seat-belts then- and we took a week, from motel to motel, to get to New York.Upon arriving in New York, we sold the car and took an ocean liner to Greece, another two-week trip to the port of Piraeus. I still remember my grandfather, a tall and lanky man with a top hat, waiting for us on the dock. I was his namesake and he greeted me first. He grabbed my ear, pinched my cheek and then slapped me in the face."Uh-oh," I thought, "I'm already in trouble. What did I do?"But 1 soon learned that that was his show of deep emotion and overwhelming love for me. …