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G20 “Blocks” Political Developments in Greece

The invitation of French President Nicholas Sakrozy to Greek PM George Papandreou had a catalytic role in the political turmoil that broke out in Greece after Papandreou announced a referendum on the loan-agreement of October 26th.

With no exception all opposition parties rejected the planned referendum and retiated their demand for early elections. The argument of the Greek opposition, despite their different motives,  is -more or less- that a referendum on loan agreement would lead the country into a unpredictable situation containing the danger of an uncontrolled bankruptcy and an ‘automatic’ exit from the euro zone.

While the opposition started to smite plans how to bring the government into fall and cancel the referendum, rebels started to rise within the ruling party PASOK. One MP resigned, while others requested a ‘national unity government’ even without PASOK chairman and Greece’s PM Papandreou. Fronts started to build within PASOK and voices against the referendum became loud, it seemed the countdown for the government had started.

The dramatic developments were mounting into a storm when Sakrozy invited Papandreou to Cannes for a side meeting at the G20 Summit. Sakrozy and Merkel and IMF’s Lagarde were taken by surprise by the referendum. They urgently demanded explanations by the Greek PM.

Papandreou’s appointment with Greece’s lenders seemed to have stopped  the ‘shed’ of MPs from the governing party. The Cannes appointment opened new perspective : the possibility of EU/IMF putting pressure on Papandreou to cancel his referendum plans.

The day ended with an extraordinary cabinet meeting that lasted seven hours – it started short after 8 pm and concluded at 3 am. Despite the referendum objections by at least three government ministers, Papandreou remained adamant on asking the citizens, whether they approve the loan-agreement or not.

Furthermore, Papandreou apparently had his ministers show ‘commitment to the referendum’. What? Well, that’s what the government spokesman said… As today the debate on the upcoming vote of confidence (Friday midnight) starts in the Greek parliament, it is not impossible to have the rebel ministers take open position to the referendum issue.

Greek media claim that some 10-15 PASOK deputies are against the referendum but that they may give vot of confidence to the government. Or not. The situation is confused, the atmosphere within PASOK is tensed, the mood is down. 

Papandreou together with Finance Minister Evangelos Venizelos will meet Merkel and Sarkozy tonight at 9 pm (Greek time). The political battle field in Greece may be clear after he returns in Athens.

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  1. Though read Larry Elliott here – especially the conclusion:

    “What is perhaps less obvious is that Greece now has immense power as a result of its predicament. It has the rest of the world by the short and curlies.”

    • keeptalkinggreece

      as the Greek problem is an EU problem, of course, Greece has power – therefore many Greeks blame Papandreou for not taking advantage of this power and make better deals.

  2. Can Papandreou survive the confidence vote?

  3. Referendum is good move – like in Iceland people should decide if they want pay private banks debts through privatization and cuts and lost suverennity

    • keeptalkinggreece

      the referendum in ICeland was different, it was on the question whether they should pay private investors from UK and ? who had invested in the bankrupt banks.the one here can be very tricky.