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Papandreou called to France crisis meeting

Nov. 2, 2011 at 3:30 AM   |   Comments

CANNES, France, Nov. 2 (UPI) -- France's president and Germany's chancellor called a crisis meeting Wednesday with Greece's prime minister, who vowed to proceed with a bailout referendum.

"This announcement took all of Europe by surprise," President Nicolas Sarkozy said in a televised address as France planned to host leaders of the Group of 20 advanced and emerging world economies beginning Thursday.

U.S. President Barack Obama was scheduled to leave for France at 7 p.m. EDT Wednesday.

Sarkozy said a plan worked out last week to cut Athens' debts in half and give the country a new $140 billion bailout was "the only way to solve Greece's debt problem."

Sarkozy and German Chancellor Angela Merkel called an emergency meeting for 5:30 p.m. local time Wednesday (12:30 p.m. EDT) in Cannes, France, with top eurozone leaders, including new European Central Bank President Mario Draghi -- in his second day on the job -- and International Monetary Fund Managing Director Christine Lagarde.

Sarkozy and Merkel also summoned Greek Prime Minister George Papandreou and Finance Minister Evangelos Venizelos to a meeting 3 hours later, asserting last week's bailout package was "more necessary than ever today."

Papandreou ended a 7-hour Cabinet meeting in Athens around 3 a.m. Wednesday, with Cabinet members expressing "total support" for Papandreou's referendum call, a spokesman said, adding the referendum would be held "as soon as possible."

Opposition leaders and some members of his own Socialist Party rejected Papandreou's surprise plan, which indicated he might not survive a no-confidence vote, The New York Times reported.

Papandreou Monday said he would seek a parliamentary vote of confidence Friday, four months after winning a similar vote before pushing an earlier batch of austerity measures into law.

His party holds a razor-thin parliamentary majority.

If Papandreou's government falls, it would be Europe's third to topple under the weight of austerity measures demanded by European debt relief. Irish and Portuguese governments also fell after accepting bailouts from the European Union and the IMF. In addition, Slovakia's government fell last month over whether to participate in the EU's rescue package.

Papandreou told his Cabinet the dilemma was not which party has a parliamentary majority -- "the dilemma is yes or no to the agreement, yes or no to Europe, yes or no to the euro," the prepared remarks of his Cabinet address indicated.

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