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Europe
Greek PM fights for political survival
Papandreou's government is ready to enter talks to form a coalition as referendum plan on euro bailout is in tatters.
Last Modified: 03 Nov 2011 14:47
Greek state TV has reported that Papandreou had offered to resign as PM, something his office has denied [Reuters]

The government in Greece is on the verge of collapse as opposition to the Greek prime minister's proposed referendum on more eurozone bailout funds grows.

Several members of George Papandreou's ruling socialist party have distanced themselves from his proposal, with Evangelos Venizelos, the finance minister, saying Greece's position in the eurozone "cannot depend on a referendum".

According to the Reuters news agency Papandreou's government is now ready to hold talks with the opposition on its demands for a caretaker government until snap elections are held.

The opposition New Democracy party had earlier on Thursday called for a transitional government to lead the country until it secures a vital aid payment from foreign lenders, with a view to new elections after the funds are received.

Papandreou, who was told by European leaders on the sidelines of the G20 summit in France that his country had to choose whether it wants to stay in the eurozone or miss the bailout, faces a confidence vote on Friday.

A series of defections cast doubts on whether he will keep his job.

In the run-up to the emergency cabinet meeting, Papandreou told the Greek state TV he was not resigning.

The Reuters news agency quoted a source in his office as saying "there is no resignation by the prime minister ... There is no resignation by the cabinet."

Differing opinion

Papandreou caused fears and panic on financial markets by announcing on Monday that Greece would hold a referendum, tentantively on December 4, on a second bailout plan negotiated with eurozone leaders last week.

"It's not the moment to give you the exact wording, but the essence is that this is not a question only of a programme, this is a question of whether we want to remain in the eurozone," Papandreou said.


Jonah Hull reports from Athens on the political crisis

Al Jazeera's Jonah Hull, reporting from Athens, said it had been unclear whether senior members of Papandreou's cabinet would speak with one voice on the referendum.

"Now it appears they don't ...Venizelos is a very senior member of the Socialist party. He's thought to be next in line for the leadership of the party," he said.

"He's not thought to be a major fan of the prime minister and is not happy with the way all of this has played out. Indeed, he was not even told about the referendum before it happened."

Opinion polls suggest a majority of Greeks, worried about austerity measures, think the bailout package is a bad deal for Greece, but Papandreou said he expected more support from the population than he could garner in parliament.

"I believe the Greek people are wise and capable of making the right decision for the benefit of our country," he said.

German and French leaders told Papandreou at a news conference in Cannes on Wednesday that saving the euro was ultimately more important to them than rescuing Greece.

Angela Merkel, the German chancellor, said the stabilisation of the euro could be better achieved "with Greece than without Greece", but added that stabilising the currency was more important.

"Our Greek friends must decide whether they want to continue the journey with us," Nicolas Sarkozy, who said last week that it was a "mistake" to allow Greece into the eurozone, told the news conference in Cannes.

Sarkozy and Merkel said eurozone finance ministers would meet next Monday to expedite decisions on leveraging the eurozone's rescue fund to build a firewall to protect other weaker members of the currency area.

Jean Leonetti, France's European affairs minister, said there was no question of the eurozone renegotiating Greece's bailout package. 

Papandreou told reporters in Cannes his referendum would in effect be a vote on whether Greece should remain in the euro.

But the European Commission said if Greece left the European single currency, it would have to leave the European Union as well.

Source:
Al Jazeera and agencies
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