Greek cabinet backs Euro plan referendum

[marmar]

LONDON—Europe’s latest plan to claw its way out of a monumental debt crisis lies in grave doubt less than a week after being struck, following a shocking move to put the accord to a popular vote in Greece that threw both the government there and financial markets around the world into turmoil.

Confounded officials, analysts and investors were left struggling to divine what they saw as Greek Prime Minister George Papandreou lobbing a grenade into Europe’s attempts to keep his country afloat by calling for a referendum on the new rescue package. Dismayed French and German leaders summoned Papandreou to an emergency meeting Wednesday in Cannes, France, in advance of the Group of 20 summit there later this week.

Europe’s leaders had hoped to use the gathering to tout their new agreement to boost their bailout fund and write down 50 percent of Greek debt held in private hands. But the plan is now in danger of emerging stillborn, increasing the prospects that Greece might undergo a chaotic default and that the debt crisis could reverberate through the big economies of Italy and Spain, possibly setting off another global recession.

Papandreou’s move comes just before Greece is due to receive $11 billion in loans from its European partners and the International Monetary Fund. The surprise announcement provoked an immediate backlash within his own Socialist Party, leaving his government hanging by a thread. .............(more)

The complete piece is at: http://www.thestar.com/news/world/article/1079755--greek-cabinet-backs-euro-plan-referendum?bn=1

[potone]

1. I don't see that he has a choice.

Greece is facing massive civil unrest. If the government attempts to impose these draconian measures without a popular mandate, it will surely fail. I doubt that the people will vote for this, nor, IMHO, should they. Greece is being scapegoated for a problem that goes far beyond the borders of Greece.