Europe Debt Crisis: Greece Gets an Ultimatum
France and Germany are demanding to know how committed Greece is to the euro.
Opposition Refuses to Join Greek CoalitionGreek Prime Minister George Papandreou's party may have won yesterday's confidence vote, but that may not be enough for him to hold on to power. As he holds talks with President Carolos Papoulias about forming a government of national unity to approve the euro zone bailout, the main opposition party is refusing to join any coalition with Papandreou and is demanding elections. There are reports that Finance Minister Evangelos Venizelos could replace Papandreou as prime minister. Venizelos has said elections could be held once the bailout was secured.
Greek Prime Minister George Papandreou reportedly scrapped plans to vote on the European bailout, officials close to Papandreou said Thursday. While the European bailout is deeply unpopular in Greece, Papandreou said the referendum is in effect a vote on whether Greece would stay on the euro—something that his own finance minister, Evangelos Venizelos, said was not an option. European leaders, led by French President Nicolas Sarkozy and German Chancellor Angela Merkel, said Thursday that if Greece left the euro, the country would be forced to leave the EU—and lose all of the EU’s aid. There were calls Thursday for Papandreou to resign, although his government could be ousted as soon as Friday, when they face a confidence vote by Parliament. Reuters reported that Papandreou has made a deal with ministers to resign and hand over power to a coalition government if they help him win the confidence vote. Meanwhile, the European Central Bank lowered its benchmark interest rate Thursday in response to what President Mario Draghi called a "mild recession."
Bail Out, BerlusconiBy Barbie Latza Nadeau
His government is collapsing and threatening to take Europe down with it. An examination of the Italiam P.M.'s wretched final days.
France and Germany have demanded to know whether Greece plans to retain the euro before extending the debt-ridden nation any additional aid. "Does Greece want to remain part of the eurozone or not?" German Chancellor Angela Merkel said Wednesday. "That is the question the Greek people must now answer." European leaders succeeded in urging Greek Prime Minister George Papandreou to push up a referendum on the EU Greece bailout package from January to Dec. 4 before Papandreou scrapped it altogether.
Papandreou: I'm Not Going
Greek Prime Minister George Papandreou denies he will resign, despite pressure to form a new coalition to handle the bailout. Sources had told the BBC that Papandreou will resign after an emergency cabinet meeting today. The Greek President Karolos Papoulios would then have formed a coalition government, with former central banker Lucas Papademos at the helm. Papandreou had called for a vote of confidence to take place Friday after several members of his party defected.
What Happens If Greece Leaves the Euro?By Andrew Sullivan
What happened in the last few days is something quite shocking to the Eurocrats. Someone actually asked the people of his own democratic country if they approve of deep and lasting austerity as a worthwhile price to keep the euro.