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European Leaders Struggle to Hold Together Greek Bailout Deal

November 2, 2011 at 12:00 AM EDT
Greek Prime Minister George Papandreou flew to France late Wednesday to explain his sudden call for a referendum on a new European bailout for his country. Gray Gibbon and Faisal Islam of Independent Television News report.
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RAY SUAREZ: The prime minister of Greece, George Papandreou, flew to France late today to explain his sudden call for a referendum on a new European bailout for his country. The leaders of France and Germany, Nicolas Sarkozy and Angela Merkel, awaited answers, at Cannes, on the French Riviera.

We have two reports from Independent Television News, beginning with Gary Gibbon.

GARY GIBBON: The German chancellor and the French president met in Cannes ahead of their emergency talks with the Greek prime minister.

They want the Greek referendum to happen sooner, rather than later. It could now be next month. They also want the Greeks to be asked a stark question about whether they want to stay in the euro. A Greek government spokesman tonight said that won’t happen and the referendum question will be on the bailout deal.

Earlier in Berlin, welcoming the Turkish prime minister, Angela Merkel said, Germany urgently needed to know where Greece was heading.

“We have to have clarity about what is coming next,” Chancellor Merkel said. “Last week, we agreed on a program with Greece and the EU And I can speak for Germany here. We want to implement the program.”

In another curtain-raiser to tonight’s talks in Cannes, the European Commission president came close to calling for a government of national unity in Greece, and he warned of dire consequences if Greece doesn’t stick to the euro bailout deal.

JOSE MANUEL BARROSO, European Commission: The conditions for Greek citizens will become much more painful, particularly for the most vulnerable. The consequences will be impossible to foresee. That is why I call on the Greek government and all political leaders of Greece to show that they are ready to work for national unity, national political unity.

GARY GIBBON: As President Hu arrived in Cannes, the Chinese official news agency called on Greece to drop its referendum. Behind the scenes, Europe’s leaders have made similar private appeals.

But one way or another, through a referendum or an election, the odds right now are that the Greek people probably will get their say, whether the Eurozone likes it or not.

JEFFREY BROWN: In Greece today, there was growing political turmoil in the wake of Prime Minister Papandreou’s call for a vote on the bailout plan.

Our second report is from Faisal Islam in Athens.

FAISAL ISLAM: Another experiment in democracy in the place of its birth, the Greek Parliament now debating the survival of an embattled government after the shock decision to send its carefully negotiated bailout to the consent of the people — the response in the Greek press, universally hostile. “Traitor,” says this headline. “Country and Government in Nervous Breakdown,” says this one.

Are you going to vote yes or no?

MAN: I don’t know what I’m going to vote, because I don’t know what exactly is going to — to ask from us.

FAISAL ISLAM: People angry with Papandreou?

MAN: Of course. They’re angry.

FAISAL ISLAM: Yes or no?

WOMAN (through translator): Yes. I will vote yes.

FAISAL ISLAM: Why?

WOMAN (through translator): Because I think that for Papandreou to do this, he must be in a difficult position. They cornered him. Something’s going on. He’s not doing it to hurt his country.

FAISAL ISLAM: George Papandreou has now hitched the future of the single currency and the world economy to the bewildered locals of this small, but ancient nation. The euro and the drachma side by side, no longer just a consequence of coin collecting, but a plausible outcome of this crisis, and a dangerous gamble, says Greece’s opposition leader.

ANTONIS SAMARAS, Greek opposition leader (through translator): The government is blackmailing the people to accept the bailout package and its mistaken policy at the same time. And it’s taking the risk that the people will reject the bailout package, along with the policies, which could put Greece’s membership in the Eurozone in danger, as well as the Eurozone itself.

FAISAL ISLAM: Given that, why did Greece’s prime minister gamble this country’s relative prosperity on an unannounced referendum about which he failed to inform his own finance minister?

NICK MALKOUTZIS, Kathimerini Daily: It’s really, I think, a prime minister that’s trying to shake the pack and to see how the cards fall, and he’s hoping that they will fall in his favor. But it could fall — bring down the euro it with. That’s a possibility. I hope that he’s thought about that.

FAISAL ISLAM: Tonight, Athens awaits what gifts or admonishments are given out to their prime minister by France and Germany in Cannes.

RAY SUAREZ: The European bailout plan calls for banks to write off half of what Greece owes them. But in return, the Greek government would have to enact even deeper spending cuts.