Thursday, November 3, 2011

Greece referendum

Greek cabinet backs referendum

Posted: 02 November 2011 1027 hrs

ATHENS: Greek Prime Minister George Papandreou secured the unanimous backing of his cabinet for a referendum on the eurozone debt rescue plan, government spokesman Elias Mossialos said early Wednesday.

The cabinet also approved Papandreou's decision to hold a parliamentary vote of confidence on his government, Mossialos told reporters.

Several socialist deputies had already denounced the referendum plan on Tuesday, with one member quitting the parliamentary group to fight it.

That defection left the socialists with just 152 deputies in the 300-seat parliament, suggesting that the outcome of Friday's confidence vote was far from a foregone conclusion.

At the emergency cabinet meeting called late Tuesday, Papandreou had insisted on the need for a referendum.

"The referendum will be a clear mandate, but also a clear message inside and outside Greece on our European course and our euro membership," he said.

Explaining his opposition to calls for an early election, he argued that "everything would stop" in an election campaign and the country would "be dragged to a risk of bankruptcy".

Papandreou added that his EU peers "had been advised" of his plans "and will respect and support" the country's efforts.

Earlier Tuesday, Defence Minister Panos Beglitis backed the referendum.

"The Greek people must assume their responsibilities on how they want the country to continue its course and exit from the crisis," he told private Skai radio.

During trading Tuesday, Greek stocks plunged 6.92 percent in response to Papandreou's surprise referendum announcement late the previous day.

Adding to the chaos, Greece's foreign minister cancelled meetings with three foreign ambassadors, while Finance Minister Evangelos Venizelos was hospitalised with an inflamed appendix.

The semi-state Athens News Agency said Venizelos had made a flurry of phone calls to senior players at the European Commission and the International Monetary Fund as well as to his German counterpart Wolfgang Schaeuble.

On Wednesday, Papandreou is due in the French resort town of Cannes to face G20 leaders at their summit on Thursday and Friday.

He will attend a working dinner with host Nicolas Sarkozy of France and German Chancellor Angela Merkel.

Also present will be EU president Herman Van Rompuy, EU commission chief Jose Manuel Barroso, eurozone chief Jean-Claude Juncker, new ECB chief Mario Draghi and IMF managing director Christine Lagarde, Papandreou's office said.

In a phone call with Merkel on Tuesday, Papandreou insisted the referendum would strengthen Greece in the eurozone and globally, his office said.

But on Tuesday, former deputy minister Milena Apostolaki quit the socialist parliamentary group, saying she would keep her seat to fight the referendum plan.

"I have an obligation to resist this erroneous political choice that divides the nation," she said in a statement.

Vasso Papandreou, head of the parliamentary economic affairs committee, then called for early elections and a temporary unity government to "safeguard" last week's eurozone deal to slash Greece's huge debt.

"The country is threatened by imminent bankruptcy," said Vasso Papandreou - no relation to the prime minister.

Another socialist deputy, Eva Kaili, threatened to defect if the government persisted with the referendum plan, and a statement from six socialist party members also called on the premier to resign.

Many analysts have warned that early elections would fail to produce a strong majority in parliament and would plunge the country into political uncertainty. Papandreou's term ends in 2013.

But with leaders of the world's 20 biggest economies getting ready for the Cannes summit which is focused on the economic crisis, Papandreou's unexpected move has triggered fears the rescue efforts could rapidly unravel.

He has faced increasing dissent within his own party over the tough austerity policies required by the EU and the IMF, which have sparked general strikes and sometimes violent street protests.

Although the EU deal agreed last Thursday included an agreement to write off 100 billion euros ($137 billion) of debt owed by Greece, Athens still has to implement a painful package of austerity measures in return.

Also on Tuesday, a state security council chaired by Papandreou replaced the heads of the general staff, the army, navy and airforce.

A defence ministry source insisted the reshuffle had been previously planned and was not linked to the political turmoil.

- AFP/fa/al


My Thots....

Does the troika, all respectable members & proponents of democracy, expect GP to ram the austerity measures down the throats of Greek citizenry?

The truth of the matter is that w/o a proper mandate from the people thru some sort of a referendum, any austerity measures that George Papandreou (GP) agreed with the troika cannot be implemented with success. He had to go to the people to have the legitimacy for the huge reforms.

An election would be a total disaster as it will likely be tumultous and he would likely be thrown out.

A properly framed referendum such as " Should Greece stay in the Eurozone" would be a more safe way of gathering political legitimacy.

There are sufficient reasons to believe that a significant portion of the population are NOT paying their "dues" in taxes and faced with a choice between Greece's collapse and exit from Eurozone vs paying their "dues"; this portion of the population may even vote "Yes".

The biggest worry were the biz reports claiming that members of GP's PASOK were abandoning him for his decision to hold the referendum and that his "majority" slipped to a mere difference of "one".

With his cabinet behind him, the picture is clearing but he still has a huge challenge ahead of him.


qiaofeng said...

Latest update is that Papandreou has dropped plans for the bailout!!
It appears even Evangelos Venizelos, the Finance Minister is against the bailout.

qiaofeng said...

W/o a referendum, the only way that Papandreou can cling onto power and retain mandate to carry out the reforms is to from a National Govt of Unity.

qiaofeng said...

Papandreou secured 153 votes out of 300 votes for the confidence vote. But,likely he will yield his PM position to an interim caretaker PM. Antonio Samaris, is angling for the leadership position; at times indicating support for the bailouts, at times not, as long as he can derive political advantage.
A patriot has left.
Would the new leader be as good as Papandreou or will he be a "snake in the bushes' manipulating to take over power ?

"Wisdom is purified by virtue and virtue is purified by wisdom. Where one is, so is the other."