Greek PM insists on referendum on EU aid deal despite political turmoil

Greek Prime Minister George Papandreou insisted on Tuesday night on his initiative that a recent European aid deal for Greece will be put to referendum in early 2012, despite the political turmoil caused that rocks his socialist administration. "There is no way that the planning announced on Monday will be changed. The holding of referendums was our pre-election promise to people. Everything will be judged on Friday," Papandreou told the cabinet meeting, according to a Greek national news agency AMNA report. The Greek leader was referring to the critical vote of confidence scheduled for Friday night, as several ruling socialist PASOK party deputies have "revolted" over the past few hours protesting the unexpected announcement on the referendum. The party's parliamentary group was left with a 152-seat majority in the 300-member parliament, following the decision of a deputy to turn independent on Tuesday, while other "dissident" lawmakers warned with casting negative votes, suggesting his resignation and forming of a national unity government or snap general elections. According to critics within the party and all opposition parties that stepped up pressure for early polls, the referendum call would divide Greek people, fuel political instability at the debt-ridden country, put the entire international support in question and endanger the country's position in the eurozone and Europe. According to the AMNA report, Papandreou on Tuesday night argued that the system that faces losses from the EU deal clinched in Brussels last Thursday on the 50 percent "haircut" of the Greek state debt owned by private bondholders and further multi- billion euro aid to Greece to escape a Greek default, reacts fiercely. Underlining that he had informed European leaders on his plans, the Greek prime minister said that he expected that the upcoming G20 summit in France would send the message that political leaderships will protect states from attacks of parts of markets. According to media reports, Papandreou expressed his determination to let Greek voters decide whether they want the implementation of the EU deal or not, and whether they want a Greek exit from the euro zone. In statements to the national broadcaster as the cabinet meeting was still under way after midnight, deputy government spokesman Angelos Tolkas expressed confidence that the government will secure the vote of confidence on Friday. Greek media also reported that opposition parties, which criticized the October 26 deal agreed by eurozone leaders as insufficient and a wrong recipe that endangers sovereignty and leads eventually to default, will examine on Wednesday the prospect of boycotting parliament to force snap elections. Papandreou has dismissed such calls, arguing that snap elections at this critical moment will lead Greece to political uncertainty, the state in paralysis and jeopardize vital EU/International Monetary Fund aid. He has argued that the government needs the wider national consensus and a fresh mandate to push through the needed austerity and structural reform policies under the agreement with international lenders. During Tuesday's cabinet meeting, Papandreou stressed that he appealed for unity and proposed a national salvation government months ago, but opposition partied rejected the idea. But according to Greek media reports citing IMF sources in Washington, after Papandreou's initiative, the release of the sixth aid tranche of the first bailout loan package in mid-November is at stake. Without it, the Greek state could run out of cash within a few weeks. Political analysts in Athens expressed fear on Tuesday that the referendum risks overturning the deal and leading to default with a severe impact on the eurozone, since polls showed that the majority of Greeks due to frustration over austerity, could vote against the deal.