Greek PM calls referendum, confidence vote on EU debt deal

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Embattled Greek Prime Minister George Papandreou on Monday called for a confidence vote and a referendum on last week's EU debt deal, taking a political gamble to silence growing opposition to his policies.

"On this roadmap of political initiatives I ask for a confidence vote," Papandreou told his Socialist party lawmakers in parliament, moments after he announced a referendum would also be held on the EU deal.

"An expression of confidence in the policy to be followed is more necessary than ever," Papandreou said, adding that the referendum expected early next year would be a "cornerstone" to build a "new era" for Greece.

Papandreou, who has 153 deputies in the 300-seat parliament, has faced increasing dissent within his own party over the tougher austerity policy monitored by the EU and the International Monetary Fund that has sparked general strikes and widespread protests, many of them violent.

"The command of the Greek people will bind us," the premier said.

"Do they want to adopt the new deal, or reject it? If the Greek people do not want it, it will not be adopted," the prime minister said after protests around the country last week against his government's austerity policies.

The confidence vote is expected to be held on Friday while the referendum is slated for early next year.

An adverse result in either process would scupper the EU deal, which is designed to cut Greece's debt load of over 350 billion euros ($495 billion) by around 100 billion euros.

It was only reached after months of haggling in marathon talks last Thursday and besides the Greek debt reduction included measures to bolster the European banking system, help other struggling eurozone member states and boost the size of the bloc's bailout funds.

The finance ministry of Germany, which along with France had hammered out the EU deal, declined to comment on the announcement, with a spokesman in Berlin calling it "an internal political development in Greece on which the government does not yet have any official information."

In a survey in To Vima weekly on Sunday, over 58 percent of Greeks termed the deal 'negative' or 'probably negative', although over 72 percent of those polled said Greece should remain in the euro.

Papandreou's gambit came as Greece faced delicate negotiations with its eurozone peers on the details of last week's agreement and with global bankers asked to accept a 50-percent loss on their Greek debt holdings.

Veteran political analyst Ilias Nikolakopoulos termed it "a panic reaction" and a "dangerous" decision by the Socialist leader whose approval ratings are at historic lows.

The last referendum in Greece was held in 1974 when a broad majority voted to abolish the monarchy.

Under the constitution and existing laws, referenda can be held on critical national issues or on parliament bills.

The former case requires approval by 151 lawmakers and needs a participation of 40 percent of registered voters to be considered legitimate.

The latter must be supported by 180 lawmakers and also needs a 50-percent voter turnout.

Public anger showed itself again on Friday as parades were held to mark Greece's wartime resistance to Nazi Germany and Fascist Italy.

President Carolos Papoulias walked out on a military parade in the northern city of Thessaloniki when hecklers labelled him a 'traitor' and other officials in other cities were also insulted.

Finance Minister Evangelos Venizelos indicated the referendum was hastened by political opposition at home to last week's EU deal.

Successive efforts by Papandreou in recent months to gain support from his domestic political rivals to boost Greece's bargaining powers in Brussels failed.

The finance minister later added that the referendum would be held after the details of the EU agreement are worked out, a process expected to culminate in early 2012.

In Greece, many people believe the country has gone too far in allowing the EU and IMF to dictate economy policy in return for two bailout deals which have cost several hundred billion euros so far.

The opposition parties lambasted the government's move.

The main opposition New Democracy conservatives called Papandreou "ruthless" and "dangerous," accusing him of throwing Greece's EU future "in the air like a coin."

"This is raw blackmail, we should have elections now," Makis Mailis, a spokesman for the third-ranking Communist party, told private Mega channel.

Papandreou, whose term ends in 2013, has consistently ruled out holding early elections, which many analysts have warned would fail to produce a strong majority in parliament and plunge the country in political uncertainty.

© 2011 AFP

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