Wednesday 22 November 2017

Greek Tragedy: Referendum goes but Papandreou stays

Greek Prime Minister George Papandreou answers questions at his news conference
German Chancellor Angela Merkel and French President Nicolas Sarkozy in Cannes last night reporters

THE GREEK referendum on the EU/IMF bailout plan has been scrapped following a day of political turmoil in chaotic Athens but Prime Minister George Papandreou has refused to step down.

Mr Papandreou had been under intense pressure to quit after a split emerged in his cabinet over his plans to hold a vote on the controversial EU/IMF bailout deal.

He will, however, face a confidence vote in the Greek parliament tomorrow.

Mr Papandreou is to hold talks with the opposition over their calls for a transitional government and as part of the process the referendum was scrapped.

But speaking in the Greek parliament this afternoon he highlighted the value of the bailout deal and the dangers of leaving the eurozone.

“It's never happened before that a county has had its debt written off by 50pc and is still complaining,” he said.

“Turning down this package would be the beginning of coming out of the euro - and that is certain.”

Speaking at the G20 summit in Cannes, German Chancellor Angela Merkel confirmed that the latest tranche of €8bn in bailout money which Greece needs to pay its teachers and nurses next months remains suspended following the fiasco.

His surprise announcement of the referendum on Monday shocked European leaders and triggered stock market sell-offs worldwide.

Today markets gained after they digested news that the referendum is off but they were also cheered by news of the cut in interest rates by the European Central Bank.

Germany’s DAX was up over 2.7pc, the FTSE 100 at over 1pc and France’s CAC added on more than 3pc.

According to a spokesperson for Mr Papandreou’s administration: "There is no reason to have a referendum if there is consensus between the two large parties," a spokesperson for the prime minister's office said.

Earlier reports that he was then due to meet the president has been denied by the presidential office.

This morning Mr Papandreou was under further pressure after his finance minister Evangelos Venizelos said that he did not support the plan to hold a referendum on whether the country should stay in the euro.

After returning to Athens from the G20 talks in Cannes last night, Mr Venizelos issued a statement saying he had a "duty to tell the Greek people the full and simple truth.

"Greece's place in the euro is a historical conquest by the Greek people that cannot be placed in question... this cannot be made.’’

If Greece had voted to leave the eurozone it would also have to leave the union, according to the rules governing membership.

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