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Greece debt crisis: Referendum promised on EU deal | Greece debt crisis: Referendum promised on EU deal |
(about 2 hours later) | |
Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says. | Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says. |
Last week eurozone leaders agreed on a 100bn-euro loan (£86bn; $140bn) to Athens and a 50% debt write-off, in a effort to tackle the euro crisis. | |
But there have been large-scale protests in Greece against austerity measures demanded by the EU. | |
Analysts say a referendum could derail the wider deal on the euro debt crisis. | Analysts say a referendum could derail the wider deal on the euro debt crisis. |
The Greek rescue package is a key part of the agreement reached last week after marathon talks between eurozone leaders. | |
They said banks holding Greek debt accepted a 50% loss, the eurozone bailout fund will be boosted to about 1tn euros and banks will have to raise more capital. | |
Asian markets fell on Tuesday amid renewed worries about the eurozone. The main indexes in Japan, Hong Kong and Australia were all down by at least 1.4%. | |
Benchmarks in Singapore, India and Indonesia were also down. | |
People rule | People rule |
Opinion polls in Greece show that most people do not support the austerity deal. | Opinion polls in Greece show that most people do not support the austerity deal. |
Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros. | Mr Papandreou told a meeting of his governing Socialist party that Greek people would have the final say on the package, which is designed to reduce Greek debt by about 100bn euros. |
"The command of the Greek people will bind us", he was quoted as saying by AFP news agency. | |
It is a big gamble by the Greek prime minister. | It is a big gamble by the Greek prime minister. |
He will argue that it is in Greece's national interest to support the deal. | He will argue that it is in Greece's national interest to support the deal. |
Without it, he will say, the country faces default and catastrophe. | Without it, he will say, the country faces default and catastrophe. |
He will base his campaign on an appeal to patriotism. | He will base his campaign on an appeal to patriotism. |
But on recent visits I have found many people would prefer the chaos of default to years of hardship. | But on recent visits I have found many people would prefer the chaos of default to years of hardship. |
He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country's creditors. | He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country's creditors. |
It is a big gamble for Mr Papandreou, who will argue that it is in Greece's national interest to support the deal, the BBC's Europe editor Gavin Hewitt reports. | It is a big gamble for Mr Papandreou, who will argue that it is in Greece's national interest to support the deal, the BBC's Europe editor Gavin Hewitt reports. |
But our correspondent says that many people in Greece say they prefer the chaos of default to years of hardship. | But our correspondent says that many people in Greece say they prefer the chaos of default to years of hardship. |
Last Friday, there were protests in several cities around Greece. | |
An important annual parade was cancelled in Thessaloniki after demonstrators blocked the route and shouted insults at President Karolos Papoulias. | An important annual parade was cancelled in Thessaloniki after demonstrators blocked the route and shouted insults at President Karolos Papoulias. |
Socialist dissenters | Socialist dissenters |
Many Greeks believe the government has gone too far in allowing the EU and the International Monetary Fund (IMF) to dictate the austerity measures needed to secure the bailout. | Many Greeks believe the government has gone too far in allowing the EU and the International Monetary Fund (IMF) to dictate the austerity measures needed to secure the bailout. |
Mr Papandreou has also faced growing dissent from within his own Socialist party over the impact of the measures. | Mr Papandreou has also faced growing dissent from within his own Socialist party over the impact of the measures. |
The party's approval ratings have plunged and its parliamentary majority has been cut by several defections to other groups. | The party's approval ratings have plunged and its parliamentary majority has been cut by several defections to other groups. |
Analysts say the promise of a referendum allows Mr Papandreou's government, which has born the brunt of public anger over the austerity measures, to pass responsibility for the country's future to the Greek public. | Analysts say the promise of a referendum allows Mr Papandreou's government, which has born the brunt of public anger over the austerity measures, to pass responsibility for the country's future to the Greek public. |
"The new agreement will be submitted to parliament for approval and then submitted to the judgment of the Greek people," Finance Minister Evangelos Venizelos told the Antenna TV channel. | "The new agreement will be submitted to parliament for approval and then submitted to the judgment of the Greek people," Finance Minister Evangelos Venizelos told the Antenna TV channel. |
"The Greek people can, of course, say no but must bear in mind the consequences of that decision." | "The Greek people can, of course, say no but must bear in mind the consequences of that decision." |
Opposition parties said the government had only announced the referendum to avoid having to call an early general election. | Opposition parties said the government had only announced the referendum to avoid having to call an early general election. |
"The prime minister is trying to buy time," said Costas Gioulekas from the right-of-centre New Democracy party. | "The prime minister is trying to buy time," said Costas Gioulekas from the right-of-centre New Democracy party. |
"We want clear solutions. And a clear solution is obvious: elections." | "We want clear solutions. And a clear solution is obvious: elections." |