Greek PM Calls Referendum On EU Aid Package

#1
Greece's prime minister has called a referendum on the new EU rescue package, as a leading economist tells Sky News a no vote would be a disaster for the eurozone.

George Papandreou said if the Greek people do not want the deal that is designed to slash the country's mountain of debt by nearly a third, it will not be adopted.

He gave no date or other details on the proposed referendum, which would be the first in Greece since 1974.

"This will be the referendum: the citizen will be called upon to say a big 'yes' or a big 'no' to the new loan arrangement," he told Socialist members of parliament.

"This is a supreme act of democracy and of patriotism for the people to make their own decision ... we have a duty to promote the role and the responsibility of the citizen."

Mr Papandreou said he would also ask for a vote of confidence to secure support for his austerity measures policy.

The announcement comes as Greece faces delicate negotiations with its eurozone peers on the details of last week's agreement and with global bankers asked to accept a 50% loss on their Greek debt holdings.

Speaking on Sky's Jeff Randall Live, Nobel prize-winning economist Professor Christopher Pissarides said the deal is the only solution to solve the debt crisis.

"If it's rejected, it'll be a disaster for Greece," he said. "It'll be bad enough for the European Union and the eurozone in particular, but it'll be far worse for Greece."

He added that a no vote would mean Greece would have to declare bankruptcy and be removed from the eurozone - and that Mr Papandreou would have to resign.

European leaders finally agreed the elements of the deal early on Thursday morning following marathon talks in Brussels.

It was decided banks will have to accept a 40% write-down on any Greek debt they hold - higher than the 40% they had originally tabled.

It was also agreed that the 440bn euro (£386bn) bailout fund will be increased to around 1trn euro (£876bn).

Mr Papandreou's decision comes a day before the leaders of the world's 20 biggest economies are set to gather in the south of France for the G20 summit.

More follows...


Guess he doesnt want to get shot by own people first....think its going to hell :)

Greek PM Calls Referendum On EU Aid Package - Yahoo!
 
#2
Rather refreshing for a politician to get the decision of the electorate on such an important move for Greece, Stuff the Eurozone he represents the will of the People of Greece
 
T

trowel

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#3
Rather refreshing for a politician to get the decision of the electorate on such an important move for Greece, Stuff the Eurozone he represents the will of the People of Greece
Is a Greek national allowed to be PM of uk? Just a thought.
 

Auld-Yin

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#5
Well, that will have Merkel & Sarkozy spitting in to their skinny lattes.

Maybe Merkel was not joking by saying refusing to agree with her demands could mean war!
 
T

trowel

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#8
Whose peacekeepers are going to go in when it all goes pear shaped, they're unlikely to welcome Germans.
I doubt very much if the Germans will care one way or the other what the Greeks think if it all goes tits up and they volunteer their services as a peace keeping force.
 
#13
Greece could just be a stepping stone to a general upheaval in the EU front pffice which might get those unworldly apparatchiks remembering who pays their salaries and junkets and all the other money soaking garbage that passes for "We are great guys here in brussels".
 

Auld-Yin

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#14
Greece could just be a stepping stone to a general upheaval in the EU front pffice which might get those unworldly apparatchiks remembering who pays their salaries and junkets and all the other money soaking garbage that passes for "We are great guys here in brussels".
And pigs might ****ing fly!!!!
 
#15
It could also be some cooked up idea from last weeks meeting, get a deal, haircuts for Greek debt then have a referendum that the Greek gov will most likely loose..."oh too bad" Greece leaves the Euro and tries to sort it self out..

Maybe far fetched.
 

OldSnowy

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#16
Who say's the Greek Govt will lose? The Greeks know that their only chance of retaining a vaguely half-decent standard of living is to remain in the EU/Euro at all costs. The alternative is pretty grim (riot, revolution, communism, fascism, anarchy, men sleeping with foxes, Human sacrifice, dogs and cats living together... mass hysteria! you know the sort of thing), so PM Papewhotsit is probably gambling on their thinking "better the devil you know". The EU teat will be still there to be suckled on for a while yet - who else will Germany sell it's goods to, if not the other EU members who have been happy to accept the Euro?
 
#17
Who say's the Greek Govt will lose? The Greeks know that their only chance of retaining a vaguely half-decent standard of living is to remain in the EU/Euro at all costs. The alternative is pretty grim (riot, revolution, communism, fascism, anarchy, men sleeping with foxes, Human sacrifice, dogs and cats living together... mass hysteria! you know the sort of thing), so PM Papewhotsit is probably gambling on their thinking "better the devil you know". The EU teat will be still there to be suckled on for a while yet - who else will Germany sell it's goods to, if not the other EU members who have been happy to accept the Euro?
All quite possible...but angry people will often act on that anger. If some populist types come along and make semi plausible promises of what a bright unencumbered future Greece will have once freed from these punishing debt requirements...well people may take the gamble on that.
 

Wordsmith

LE
Book Reviewer
#18
Can I raise the interesting thought that this referendum is a negotiating tactic by PM Papewhotsit. The consequences to the Euro zone of a Greek 'No' would be far reaching. It would throw the markets into turmoil. Based on past precedent the EU would probably invite the Greeks to vote again, but the time would not be there to do that.

What I suspect might happen (after Merkel and Sarkozy finish turning the air blue) is that they come up with some form of bribe for Papandreou. As an example, they might keep the bale out terms unchanged but come up with a massive boost to the structural funds that the EU gives Greece. This would effectively mean that the EU was paying the wages of Greek workers. Papandreou will then say that the terms of the bale out have been improved and there is no longer any need for a referendum.

But referendum or not, all this is just rearranging deckchairs on the Titanic. The Greek economy is in the intensive care ward. What is being proposed falls far short of what is required - which is probably almost total forgiveness of Greek sovereign debt (including that held by the ECB) and very large transfers of funds from the solvent EU states to Greece for the next 10 years. But that solution is not acceptable to the electorates of France and Germany - who would have to pay for most of it...

Greek membership of the Euro is going to break Greece - and then Greece is going to return the favour by badly damaging the Euro and precipitating a major financial crisis.

Wordswmith
 
#19
Ah, well. All the more reason for the Deutche Zentrale Banke printing up all those nice DMarks....... Greece is Gef*ked, so they might as well start printing drachmas...
 
#20
What I suspect might happen (after Merkel and Sarkozy finish turning the air blue) is that they come up with some form of bribe for Papandreou. As an example, they might keep the bale out terms unchanged but come up with a massive boost to the structural funds that the EU gives Greece.
The German Supreme Court has already said that any further increase in the structural fund would need a referendum of the German people.

The Greek economy is in the intensive care ward.

Wordswmith
Wrong. The Greek economy is in a respite care home... palliative care only is needed now.
 

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