Greek PM faces revolt over bailout referendum

Papandreou’s move to put the EU package to a national referendum has prompted a global stocks decline [Reuters]

Six senior members of Greece’s ruling party have called George Papandreou, the prime minister, to resign a day after he called for a national referendum on proposed EU bailout, the semi-official news agency ANA says.

Papandreou has said he intends to put the recently negotiated $180bn bailout package to a national referendum.

“The country urgently needs a politically legitimate government, a plan for a national revival,” ANA quoted a joint letter by the parliament members from PASOK’s national council as saying on Tuesday.

Earlier, Milena Apostolaki, a parliament member, broke away from PASOK to declare herself an independent, leaving the party with a majority of just two seats in the 300-member legislature.

However, a government spokesperson, said the Greek government believed it will win a confidence vote on Friday and they will go ahead with the referendum.

“We believe the government will once again win a vote of confidence in order to proceed with its plans,” Angelos Tolkas told reporters while Papandreou was chairing an emergency cabinet meeting.

Markets fell across Europe in response to the announcement of the referendum.

Agains this backdrop, the French and German leaders held emergency talks over phone to deal with the situation.

Both the leaders said in a statement that they were determined, together with their European partners, to guarantee the complete and timely implementation of the Euro debt deal.

They have summoned Papandreou to crisis talks in Cannes on Wednesday to push for a quick implementation of Greece’s new bailout deal ahead of a summit of the G20 major world economies.

Gamble not working

Al Jazeera’s Jonah Hull, reporting from Athens, said Papandreou’s gamble is not working his way.

“This announcement by the Greek prime minister seems to have come as a surprise even to his cabinet and there are reports he didn’t even confer with his ministers over this,” he said.

“He certainly did not give away any hints or clues about it at the marathon talks last week in Brussels with his fellow eurozone leaders.”

Referring to a no-confidence vote that Papandreou faces on Friday, our correspondent said: “He needs 150 plus one vote and that’s the number of votes he has. He needs every single vote.

“There are rumours that there are others among his socialist party who are considering their position. So, it is looking possible at least that Papandreou may not survive Friday’s no-confidence vote.

“That would mean government has fallen, there would then be a possibility that socialist might be asked to form some sort of coalition. If they can’t, the opposition, conservative New Democracy Party might have a go, and if that fails then there would be general elections.”

Last week’s bailout package had raised hopes a line could be drawn under banks’ Greek losses and euro zone bonds could be sold to China and other investors.

Papandreou’s decision has not gone down well with the people. With anger running high in Greece over tough austerity measures that have raised taxes, lowered wages and triggered strikes, analysts fear Greeks will vote down their financial lifeline and push the country to economic collapse.

A poll over the weekend showed nearly 60 per cent of Greeks have a negative view of the rescue deal, suggesting that voters in the referendum likely to be held early next year, will say no to the rescue package.