Responding to the riots that followed last week’s proposal, as well as dissent from within his own Socialist party, Prime Minister George Papandreou said: “The command of the Greek people will bind us. Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted.”
Staging a referendum, reportedly to be held in January, threatens to throw the eurozone further into crisis as the majority of Greeks object to the bail-out, according to a survey published last week.
If Greece were to reject the plan, which requires deep spending cuts, it would risk a full-scale default and possible ejection from the euro. The country could even run out of money to pay civil servants or state pensions if the troika decided to pull the plug.
The decision by the embattled Mr Papandreou has the potential to be a major blow to efforts by German chancellor Angela Merkel and French President Nicolas Sarkozy to tame a crisis that most economists expect to push Europe back into recession in coming months. Read on and comment » | Philip Aldrick, and Richard Blackden | Monday, October 31, 2011
