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Greek PM appears to back off referendum plans

From Elinda Labropoulou for CNN
updated 9:17 AM EST, Tue November 8, 2011
  • Papandreou calls on opposition to work with him to support bailout
  • Stepping aside would be "irresponsible," he says
  • Papandreou's remarks came after opposition leader called for his resignation

Athens, Greece (CNN) -- Prime Minister George Papandreou said Thursday that a controversial proposal to hold a referendum on an international bailout for his country would not be necessary if the opposition were to support the tough austerity measures that accompany it.

Papandreou's comments came in response to the call by opposition leader Antonis Samaras that he would support the bailout but wanted Papandreou to step aside.

As of early Friday, it was still unclear whether there would be a referendum in December, as Papandreou had called for earlier this week, though it appeared unlikely.

Samaras repeated a call for Papandreou, who faces a confidence vote Friday night, to step down and for snap elections within six weeks.

Calling Papandreou untrustworthy, he said: "We are asking you to resign to give power to people to negotiate new measures."

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"It's nothing that I can rule out, and I'm not clinging to any chair," Papandreou said about the prospect of giving up his job. "That's the political cost I'm taking on, me personally, for something which I did not cause."

Papandreou said he was not interested in being re-elected, only in saving the country from economic disaster should Greece default on its debts. The political instability in Greece has caused political and financial jitters throughout Europe and beyond, as world leaders meet in Cannes, France, for the G-20 economic summit.

"Everything is on the table," Papandreou said. "Well, the government will be. But let's talk about it. Let's debate it. You don't expect -- out of the blue -- for a government to resign. That would be irresponsible." He added, "We cannot at this period of time leave a vacuum in power."

He called on Samaras "to come back to the room and participate in this conversation about forming a government, of a wider support for the good of the country."

Papandreou appeared hurt by criticism of the bailout itself, which was negotiated October 26 and would impose strict austerity measures on Greece.

"We managed to get the biggest-ever package ever given to a country on the planet," he said of the deal, which would wipe out 100 billion euros in Greek debt, half of what it owes to private creditors. It comes with a promise of 30 billion euros from the public sector to help pay off some of the remaining debts, making the whole deal worth 130 billion euros ($178 billion).

"Please tell me," Papandreou said, "Name one government that has ever brought to Greece such a package."

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But the package comes with strings that would require Greece to slash government jobs, privatize some businesses and reduce pensions.

Papandreou acknowledged that many Greeks would suffer under the plan, but said "We have to go through this difficult process in order to come to the other end." He called the bailout "the basis for the next new big leap and urged Greeks not to be misled but to work together to resolve the matter.

"National unity is the most important tool in order to get out of this crisis," he said, adding that he had asked for a referendum on the bailout "so it can be the decision of every Greek, every Greek family."

Papandreou had said earlier Thursday that the referendum he had been seeking would not be necessary if the opposition supported the tough austerity measures that accompany it.

Finance Minister Evangelos Venizelos appeared to rule out a vote, saying: "It is clear that we are not going ahead with a referendum."

He said the government needs to show that Greeks support the package.

As of early Friday, it was still unclear whether there would be a referendum in December, as Papandreou had called for earlier this week, though it appeared unlikely. If the Greeks were to vote against the package, that could result in their country exiting the euro zone and wreaking havoc on the markets.

But European stock markets all closed up Thursday after European Central Bank President Mario Draghi announced a rate cut. The Dow Jones Industrial Average shot up more than 200 points (1.76%) by the end of the day.

At least three members of Papandreou's PASOK party have said this week they no longer back him, but he has the support of one independent, giving him a one-vote majority in Parliament.

The bailout was greeted last week with fanfare as a way to keep debt woes in Greece and other European nations from spilling across other borders, threatening the 17 nations united under the euro currency.

The threat to exclude Greece from the euro zone if voters reject the bailout plan might be impossible to put into practice, said one expert on European politics.

"Legally there is no way they can make Greece leave," said Ramon Pacheco, a lecturer at King's College London. "They can put pressure on Greece, but it's up to Greece to do what it wants."

But Greece does have the option of leaving the common currency voluntarily, he said.

CNN's Ali Velshi in Cannes, Laura Smith-Spark in London, Tom Watkins and Brian Walker in Atlanta, and Journalist John Psaropoulos in Athens contributed to this story.

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