Good morning. The latest relief over the complex EU deal on increasing the EFSF firepower and 50 per cent write-off on Greek debts took a turn for the worst. No, this time the guilty party is not the much stronger economies of the eurozone objecting to near-endless cash supply to Greece, but by the bankrupt state itself. Greek Prime Minister George Papandreou has called for a referendum on the new EU bailout package. Unexpected move from a state that is at the centre of the present eurozone crisis. <\/p>\n
If the Greek people do not want the latest round of measures, decided at last Wednesday\u2019s meeting, to be implemented targeted at slashing the country\u2019s debt-mountain, it will not be implemented, said the Prime Minister. \u201cThis will be the referendum: the citizen will be called upon to say a big ‘yes’ or a big ‘no’ to the new loan arrangement. This is a supreme act of democracy and of patriotism for the people to make their own decision … we have a duty to promote the role and the responsibility of the citizen,\u201d he said while addressing the parliament. He would also seek a vote of confidence to seek support for further austerity measures. Greek media has already termed it as a huge gamble.<\/p>\n
Nobel Prize-winning economist Professor Christopher Pissarides said if the parliament rejects the new deal, voting for which is due to be held in January, it\u2019ll be disaster for Greece. A \u2018No\u2019 vote would mean Greece removed from EU and Papandreou stepping down he told Sky TV.<\/p>\n
Papandreou\u2019s socialist party is already under pressure domestically and he needs wider political backing for implementing the fiscal measures and structural reforms demanded by funding agencies. EU leaders had agreed to a second bail-out package of \u20ac130 billion and 50 per cent write-down on its enormous debt-burden last week to allow the country float through the present crisis.<\/p>\n
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