It is easy to understand the dismay gripping the leaders of the European Union after Greek Prime Minister George Papandreou dropped the bombshell that he would hold a referendum on the austerity plan.

European leaders are allergic to the term referendum. The entire logic of the EU is based on a desire to settle matters between the elites, that is, parliaments rather than the masses.

A referendum is a loose cannon and the European Union has unfortunate experience with the process. Twice the European Union lost a referendum in Ireland and had to cajole the Irish voters into reversing their decision by providing changes and inducements. When the so-called European constitution was put to a vote in France and Holland it lost convincingly. Therefore when the essentially similar Lisbon Treaty was ratified, that mistake was not repeated and it was rushed through parliaments.

A referendum also gathers together strange bedfellows, from the nationalist right that opposes diluting sovereignty and handing over prerogatives to Europe to a left that believes that the EU is dominated by free market capitalists who have no heart. These forces would be most unlikely to collaborate in a parliamentary setting; in a referendum they don't have to collaborate formally they can simply vote no.

Greece appears to be a perfect storm for such a phenomenon as the austerity plan is opposed by the conservative opposition as well as the radical left.

Additionally, the Greeks have been told that the austerity plan is the brainchild of bankers and German descendants of the Nazi regime. That their government has been  kowtowing to Brussels. They also do not relish the prospects of being a lost generation living in economic misery when they have no confidence that these sacrifices will eventually be rewarded.

Finally after all the frustrations involved in cobbling up a deal and the investments of political capital;, particularly by German Chancellor Angela Merkel the referendum proposal appears to represent a slap in the face. It also means delay when the markets are demanding action and certainty.

Yet accusing Prime Minister Papandreou of political expediency is misplaced. If the austerity plan is defeated in a referendum, his political career is over. He has gone against his own base and particularly the unions in pushing through the austerity proposals in parliament.

While one can question some of the policies of the Papandreou dynasty (his father Andreas and grandfather George were hostile to Israel), they have never lacked political courage. If Greece is going to go through the dark tunnel of austerity without any assurance of light at the end of the tunnel, it must be due to the people's choice.

Papandreou is also forcing the conservative opposition to put up or shut up.

In a referendum one votes yes or no; one cannot vote no and wait for me to get a better deal because everybody understands that the choice is between an austerity plan and cutting Greece loose from the euro zone and perhaps even the European Union.