Greece to hold crisis talks as referendum spooks markets

Πηγή: M&C
Nov 1 2011

Athens - The Greek government was to hold crisis talks later Tuesday after Prime Minister George Papandreou's unexpected decision to call a referendum on the eurozone bailout package spooked world markets and sparked a flurry of diplomatic activity ahead of a Group of 20 (G20) summit.

It was unclear whether Greece's respected finance minister, Evangelos Venizelos, who was admitted to hospital for abdominal pains earlier in the day, would attend the meeting.

Papandreou's referendum call sent shock waves across markets, with the eurozone blue-chip eurostoxx 50-share index plunging 5 per cent. It also infuriated European Union leaders, some of whom said they had not been informed of the decision, and prompted several members of the prime minister's Socialist PASOK party to call for his resignation.

German Chancellor Angela Merkel and French President Nicolas Sarkozy stressed after an emergency telephone call that 'all the necessary measures' to ensure the eurozone deal would be quickly implemented.

They announced that they would meet Papandreou in the French city of Cannes ahead of Thursday's G20 summit. EU and International Monetary Fund officials were also expected to attend the meeting.

'France and Germany are determined to ensure, together with their European partners, the full implementation, as quickly as possible, of the decisions adopted by the (October 26 EU) summit, which are more necessary today than ever,' the French presidency said in a statement after the call.

Germany and France were 'convinced' that the deal would put Greece back on a sustainable growth path and planned to establish a roadmap for its implementation, the statement said.

Luxembourg Prime Minister Jean-Claude Juncker, the influential leader of the 17-member eurozone, complained that Papandreou had not warned fellow EU leaders of his idea to call a referendum and warned that its rejection by voters could lead to a Greek bankruptcy.

Greece's Socialist government has faced mounting opposition - on the streets, from the main opposition and even within the ruling party - to any further austerity measures in a country where unemployment is at more than 17.5 per cent in a fourth year of recession.

The referendum decision prompted party deputy Milena Apostolaki to defect, leaving the Socialists with only a two-seat majority in the 300-member legislature.

Meanwhile, another Socialist deputy, Vasso Papandreou, called for a government of national unity to be followed by snap elections.

Six leading members of the Socialist party called for the prime minister's resignation, saying the announcement of a referendum was 'irresponsible and driving the country into civil disorder.'

The main opposition conservative leader, Antonis Samaras, demanded early elections. 'General elections are a national necessity,' Samaras told reporters following a meeting with President Karolos Papoulias.

No date for the referendum has been announced, but the finance minister said it would be at the start of 2012.