HEADLINES -- November 2, 2011 at 7:59 AM EDT
Greek Cabinet Supports Referendum, but Political Upheaval Might Derail Plan
Photo of Greek Parliament in Athens by Louisa Gouliamaki/AFP/Getty Images.
Greece's cabinet threw its support behind embattled Prime Minister George Papandreou's call for a referendum on a massive European bailout plan. Papandreou's referendum shocked European leaders, coming on the heels of an emergency summit in Brussels last week in which a plan to avert a default in part by pressuring banks to write off 50 percent of Greece's debt seemed to mitigate the instability surrounding Greece's dire financial situation.
Despite the cabinet's support, there are growing fears that Papandreou will not survive a no-confidence vote scheduled for Friday. Greece's domestic political upheaval rippled through European markets early this week, but on Wednesday showed signs of minor recovery.
German Chancellor Angela Merkel and French President Nicolas Sarkozy, key figures in the Brussels negotiations and in the broader debt crisis, are expected to meet with other eurozone leaders Wednesday to address the future of their bailout package. Papandreou is scheduled to meet with them on Thursday, after a warning from Germany's foreign minister, Guido Westerwelle, who said "[What] we just agreed last week cannot be placed back on the table."
On Tuesday's NewsHour, Jeffrey Brown looked at the implications of the uncertainty over Greece on European markets with John Psaropoulos, a journalist in Athens, and economist Nariman Behravesh:
Watch With Debt Fix in Danger, Is it Europe's 'Lehman Moment'? on PBS. See more from PBS NewsHour.
The turmoil in Greece comes on the eve of the G20 summit in Cannes, and is expected to dominate the meeting of the world's influential economies. According to Voice of America,
"President Sarkozy says the EU deal adopted last month is the only option. Mr. Sarkozy says that giving a voice to the Greek people through a referendum is always legitimate, but that the solidarity of all the eurozone countries can happen only if each state takes the necessary steps. He says the G20 meeting will focus on the Greek debt crisis."
Cannes has a massive police presence as protesters began converging on the city ahead of the summit.