Horn
3rd November 2011, 04:02 PM
4 Nov, 2011, 03.00AM IST, Reuters
George Papandreou backs away from referendum on Greece debt bailout
ATHENS | CANNES: Greece's teetering government backed away from a proposed referendum on staying in the euro on Thursday, while European leaders talked for the first time of a possible Greek exit to preserve the single currency.
Fast-moving events in Athens overshadowed the first day of a summit of the Group of 20 major economies on the French Riviera, with world leaders anxiously urging Europe to take decisive action to halt its sovereign debt crisis.
Beleaguered Prime Minister George Papandreou (http://economictimes.indiatimes.com/search.cms?query=George%20Papandreou) said after an emergency meeting of his Socialist cabinet that his call this week for a referendum, which sparked panic on global financial markets, "was never a purpose in itself," and he would be happy if the vote were not held. Papandreou said he had agreed to talks with the center-right opposition on a transitional government to implement a new EU/IMF bailout program.
Early elections would follow. At a torrid meeting in Cannes on Wednesday night, French President Nicolas Sarkozy and German Chancellor Angela Merkel warned Papandreou that Athens would not receive a cent more in aid until it met its commitments to the euro zone. Greece was due to get a vital 8 billion euros installment this month and says it will run out of money in mid-December if it does not get the loan.
Political turmoil in Greece and uncertainty over the euro zone sent stocks and commodity prices tumbling in Asia, and fueled a rush into safe-haven German bonds. But markets rallied in feverish trading as the likelihood grew that Greece would not hold the highly risky referendum. The leaders of China, Russia and the United States pressed the Europeans to move swiftly to contain the debt crisis, with the United States urging Germany to relent and let the ECB play a greater role in financial firefighting, G20 (http://economictimes.indiatimes.com/search.cms?query=G20) sources said.
"Europe should aid itself. The European Union has everything for that today -- the political authority, the financial resources and the backing of many countries," Russian President Dmitry Medvedev (http://economictimes.indiatimes.com/search.cms?query=Dmitry%20Medvedev) said.
A senior G20 official said the group was assessing the cost of a possible Greek default and looking at the implications if Athens were to leave the currency bloc. VENIZELOS REBELS Earlier, Finance Minister Evangelos Venizelos broke ranks with Papandreou, saying Greece's euro membership was a historic achievement and "cannot depend on a referendum."
Dissident lawmakers in the ruling PASOK party spoke out against a referendum and called for a national unity government or early elections, casting doubt on whether Papandreou would survive the week in office. Some suggested former ECB vice-president Lucas Papademos should head such an administration.
Signaling a will to compromise, opposition leader Antonis Samaras called for a transitional government to lead Greece to early elections and said parliament should first ratify last week's 130 billion euro ($178 billion) bailout deal.
European Union leaders have long called for national unity in Greece in support of painful austerity measures needed to cut the country's crippling debt, expected to reach 160 percent of gross domestic product this year. "We hope now that we may get the political consensus in Greece that has been lacking all along," an EU official said.
http://economictimes.indiatimes.com/news/international-business/george-papandreou-backs-away-from-referendum-on-greece-debt-bailout/articleshow/10600123.cms
George Papandreou backs away from referendum on Greece debt bailout
ATHENS | CANNES: Greece's teetering government backed away from a proposed referendum on staying in the euro on Thursday, while European leaders talked for the first time of a possible Greek exit to preserve the single currency.
Fast-moving events in Athens overshadowed the first day of a summit of the Group of 20 major economies on the French Riviera, with world leaders anxiously urging Europe to take decisive action to halt its sovereign debt crisis.
Beleaguered Prime Minister George Papandreou (http://economictimes.indiatimes.com/search.cms?query=George%20Papandreou) said after an emergency meeting of his Socialist cabinet that his call this week for a referendum, which sparked panic on global financial markets, "was never a purpose in itself," and he would be happy if the vote were not held. Papandreou said he had agreed to talks with the center-right opposition on a transitional government to implement a new EU/IMF bailout program.
Early elections would follow. At a torrid meeting in Cannes on Wednesday night, French President Nicolas Sarkozy and German Chancellor Angela Merkel warned Papandreou that Athens would not receive a cent more in aid until it met its commitments to the euro zone. Greece was due to get a vital 8 billion euros installment this month and says it will run out of money in mid-December if it does not get the loan.
Political turmoil in Greece and uncertainty over the euro zone sent stocks and commodity prices tumbling in Asia, and fueled a rush into safe-haven German bonds. But markets rallied in feverish trading as the likelihood grew that Greece would not hold the highly risky referendum. The leaders of China, Russia and the United States pressed the Europeans to move swiftly to contain the debt crisis, with the United States urging Germany to relent and let the ECB play a greater role in financial firefighting, G20 (http://economictimes.indiatimes.com/search.cms?query=G20) sources said.
"Europe should aid itself. The European Union has everything for that today -- the political authority, the financial resources and the backing of many countries," Russian President Dmitry Medvedev (http://economictimes.indiatimes.com/search.cms?query=Dmitry%20Medvedev) said.
A senior G20 official said the group was assessing the cost of a possible Greek default and looking at the implications if Athens were to leave the currency bloc. VENIZELOS REBELS Earlier, Finance Minister Evangelos Venizelos broke ranks with Papandreou, saying Greece's euro membership was a historic achievement and "cannot depend on a referendum."
Dissident lawmakers in the ruling PASOK party spoke out against a referendum and called for a national unity government or early elections, casting doubt on whether Papandreou would survive the week in office. Some suggested former ECB vice-president Lucas Papademos should head such an administration.
Signaling a will to compromise, opposition leader Antonis Samaras called for a transitional government to lead Greece to early elections and said parliament should first ratify last week's 130 billion euro ($178 billion) bailout deal.
European Union leaders have long called for national unity in Greece in support of painful austerity measures needed to cut the country's crippling debt, expected to reach 160 percent of gross domestic product this year. "We hope now that we may get the political consensus in Greece that has been lacking all along," an EU official said.
http://economictimes.indiatimes.com/news/international-business/george-papandreou-backs-away-from-referendum-on-greece-debt-bailout/articleshow/10600123.cms