REFERENDUM | 03.11.2011

Papandreou open to formation of caretaker government

 

Papandreou faces criticism from Europe and Athens

Greek Prime Minister George Papandreou is open to forming a caretaker government and holding new elections. It comes as the government appears to be on the verge of collapse over a proposed referendum on the rescue plan.

 

Greek Prime Minister George Papandreou was open to talks with the opposition on its demand to create a caretaker coalition government until snap elections can be held, a spokesman said Thursday.

Earlier in the day, the leader of the conservative opposition New Democracy party, Antonis Samaras, joined calls by several of Papandreou's Socialists to form a national unity government and hold early parliamentary elections.

"We welcome New Democracy's decision to support the October 26 deal," government spokesman Ilias Mossialos told reporters, referring to the latest bailout plan agreed to by EU leaders last week. "As far as the other proposals are concerned, we are ready to seriously discuss them, in the interest of the country."

Papandreou's concession came as his government seemed to be on the verge of collapse over his proposed referendum on the bailout plan, one day before he was to face a confidence vote in parliament.

Merkel and Sarkozy have both tied the referendum to eurozone membershipReports said the referendum plans may be scrapped if a caretaker government is established.

Shortly after the Greek cabinet gave its formal approval for the referendum on Wednesday, Finance Minister Evangelos Venizelos appeared to have changed his mind after talks with French and German leaders Nicolas Sarkozy and Angela Merkel in the French city of Cannes.

Euro referendum

Venizelos said in a written statement that "Greece's place in the euro is a historic achievement" and that "this established right of the Greek people cannot be put under scrutiny in a referendum." Development Minister Michalis Chrisohoidis appeared to echo those calls, saying, "There can be no… return to the drachma and the past."

French President Nicolas Sarkozy and German Chancellor Angela Merkel, leaders of the EU's two biggest economies, have made it clear to Greece that the 100-billion-euro loan package cannot be renegotiated, and that a voter rejection of the bailout would be a de facto rejection of the euro currency.

The unity of the 17-nation eurozone is in doubt

"We want to help Greece, and we want them to stay in the eurozone," Merkel said. "But the unilateral decision by Greece hangs in the air, and the situation has changed… The eurozone must be kept stable. We would prefer to accomplish this with Greece, rather than without Greece."

Merkel was one of several European leaders who had long dismissed the option of Greece abandoning the euro, but who now appear to be open to the idea. Jean-Claude Juncker, prime minister of Luxembourg and chairman of the group of eurozone finance ministers, said "everything must be done" to maintain the eurozone's unity, but that he could not "force the Greeks" to stay in.

"We cannot permanently ride a rollercoaster on Greece; we have to know where things are going, and the Greeks have to tell us where they would like things to go," he told German public broadcaster ZDF. "If the Greeks make clear via a referendum that they would feel better outside the eurozone than inside the eurozone, then this is a Greek decision, and our Greek friends have to describe the way by which they want to get out of the eurozone."

Yes to euro, no to government

Papandreou's Socialist majority in parliament was on thin ice, after an open rebellion left the prime minister with a presumptive 151-seat majority in the 300-member parliament. Papandreou could still win the no-confidence vote on Friday, and an official in his government said he did not plan on resigning despite being open to talks with the opposition.

Author: Andrew Bowen (AFP, AP, Reuters, dpa)
Editor: Nicole Goebel

 

 

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