Greek government cancels plans for referendum on European Union bailout plan
As the markets teetered and with European leaders telling Greece to take it or leave it — literally — Greece has called off plans for a popular referendum on the European Union bailout plan, agreed to last month.
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After teetering on the brink of collapse for a couple of days, the Greek government has pulled back from its plan to put the European Union bailout plan to a popular referendum, The New York Times reported.
Prime Minister George A. Papandreou, facing calls for his resignation, had gambled and tried to avoid a no-confidence vote in Parliament by taking the bailout plan, which would provide the Greek government with access to cash and cut the value of its debit in half, to the people. There have been howls of protests throughout Greece that the country would be better off by defaulting on its debt, rather than live with the austerity measures the bailout plan calls for, the Times said.
When Papandreou announced the referendum, it sent shockwaves through the stock market and through governments in Europe. French President Nicholas Sarkozy and German Chancellor Angela Merkel both demanded Greece approve the Oct. 26 bailout plan — or face being kicked out of the European Union.
“The question was never about the referendum but about whether or not we are prepared to approve the decisions on Oct. 26,” he said to the Times.
According to the BBC, the strong statement by France and Germany may have shocked the Greek political class sufficiently that it will no longer object to the bailout plan.
But whether Papandreou, whose party holds the slimmest of margins in Parliament, can surive the chaos and disagreements among elected officials remains to be seen.
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