Greece to Hold Referendum on Eurozone debt deal

Greece to Hold Referendum on New Debt Deal


Prime Minister George Papandreou announced Monday night that his Socialist government would hold a rare national referendum on a new debt agreement for Greece that was hammered out with the country’s foreign creditors last week, raising questions about Greece’s ability to follow through on its part of the hard-won deal to stabilize the euro.

The surprise announcement, made to lawmakers in Athens, again chained the health of the European Union to Greek domestic politics. Standard & Poor’s 500-stock index fell almost 2.5 percent and the Dow Jones industrials fell about 2.3 percent. European markets, which closed before the announcement, were also down sharply on Monday.

Mr. Papandreou said that the decision on whether to adopt the deal, which includes fresh financial assistance for the country but also imposes unpopular austerity measures, belonged to the Greek people. “Let us allow the people to have the last word, let them decide on the country’s fate,” he said, describing the vote ahead as “an act of patriotism.”

The move effectively pushes responsibility for painful economic choices from the Socialist party onto the public.

Comments: Image source. Score card for Eurozone debt crisis. Screen shot below

Prediction: Referendum will fail. Crisis will escalate.


  1. JP: Greek vote would be on euro membership: Finnish minister

    "The situation is so tight that basically it would be a vote over their euro membership," Alexander Stubb, the Finnish minister of European affairs and foreign trade, said in an interview with Finnish broadcaster MTV3.

    Stubb said Greece had committed to the summit decision.

    "Greece has committed to a new program which includes structural reforms. All of a sudden, if they vote against those reforms, then Greece is the one who violated the agreement," he said.

    He added no bailout aid would be deployed if Greece dodged from the required reforms.

    The latest opinion poll showed a majority of Greeks took a negative view of the bailout deal.

    Euro zone leaders last week agreed to hand Greece a second, 130-billion-euro bailout with 50-percent write-down on its debt.

  2. JP: More

    Greek referendum a deal-breaker, Dutch MP says


    "It's a deal-breaker," said party financial spokesman Ronald Plasterk of Greek Prime Minister' George Papandreou's shock decision to call a referendum on the deal.

    "It can't be so that 17 countries sit down together to talk about a package to save the Greek economy and that we then have to wait until January to open an email to see if Greece wants it."

    The Dutch parliament is debating the EU agreement Tuesday.


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