Eurozone Crisis: Greek Deal In Question As Finance Minister Breaks Ranks On Referendum

Greek Government Teeters As Finance Minister Breaks Ranks On Referendum

Greek Finance Minister Evangelos Venizelos has opened a rift in the country's government by publicly rejecting the notion of a referendum on euro membership.

George Papandreou, Greece's prime minister, met with his French and German counterparts on Wednesday night to discuss his highly controversial decision to put the eurozone's hard-fought agreement to bail out the stricken economy to the public vote.

With the entire eurozone rescue plan thrown into doubt by Papandreou's gamble - which he believes will add popular legitimacy to a package passed down from Europe - his fellow leaders issued an ultimatum: that the referendum must take place in December, and it must be an unambiguous choice between remaining in the euro or leaving it.

Speaking at a press conference last night, German Chancellor Angela Merkel said: “We would rather achieve a stabilisation of the euro with Greece than without Greece, but this goal of stabilising the euro is more important.”

Nicolas Sarkozy, the French President warned: “Our Greek friends must decide whether they want to continue the journey with us.”

Polls show that most Greeks oppose the bailout package, but wish to remain within the single currency.

With Germany and France also saying that the Greeks would receive no new bailout money until after the referendum, there are serious questions about the government's ability to service its existing debt and pay its employees. The country has said previously that its budget would be exhausted by mid-November.

Venizelos, who was taken to hospital with stomach pains on Tuesday, issued a statement on Thursday morning saying that the country's euro membership was not negotiable.

"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt," he said. "This acquis by the Greek people cannot depend on a referendum."

"I have a duty to tell the Greek people the full and simple truth: If we want to protect the country we must, under conditions of national unity and political seriousness and consensus, implement without any delay the decision of October 26. Now, as soon as possible."

Papandreou has called another emergency cabinet meeting on Thursday, ahead of a confidence vote tomorrow. His Pasok party has just a slim majority in parliament, following a number of defections across the past six months of crisis.

Venizelos, an old political rival of Papandreou who fought him for the leadership of the party four years ago, was ironically brought into the government in June to be a uniting force. As a political veteran and heavyweight, Venizelos was expected to quell rivalries inside Pasok and help push through tough austerity measures.

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