Greek PM's future in balance as revolt grows

Greek Prime Minister George Papandreou's political future hung by a thread Thursday on the eve of a crucial confidence vote as his allies revolted against his plan for a referendum on the euro. Papandreou called an emergency meeting of his cabinet and socialist party lawmakers with the government now robbed of its parliamentary majority for Friday's vote, further adding to the turmoil in the debt-laden nation. Finance Minister Evangelos Venizelos -- a former challenger for the party leadership -- was among several officials who came out strongly against the referendum, warning it could scupper a hard-won EU debt rescue deal. "Greece's place in the euro is an historical conquest by the Greek people that cannot be placed in question... this cannot be made dependent on a referendum," Venizelos said in a statement after returning from G20 talks in Cannes. Papandreou, facing mounting social opposition to his austerity policies, this week called for a referendum and a confidence vote to allow him to stay the course without having to resort to early elections as demanded by the opposition. But the gambit ran into fierce opposition both at home and abroad and sent global financial markets tumbling. Papandreou was summoned to Cannes Wednesday by furious eurozone leaders concerned that the 100-billion-euro EU deal hammered out on Greece's debt last week would be fatally undermined as a result of the referendum. European leaders warned him that if Greece does not respect the terms of the rescue deal, it will not get "one more cent" from the next planned instalment of EU and IMF bail-out funds. Papandreou said the referendum could be held on December 4. "This is a question of whether we want to remain in the eurozone. That's very clear," he told reporters. In Athens, Thursday's defections by two deputies take the ruling Pasok party down to 150 votes in the 300-seat chamber, although the government could still win the vote, depending on the number of MPs who take part. "I will not consent to holding a referendum. I will not give a vote of confidence to a course of destruction for my country," said one of the lawmakers, Elena Panaritis. But as Papandreou flew back to Athens where he will hold a cabinet meeting before addressing his party's lawmakers, there were more negative reactions from his allies. Development Minister Michalis Chrysohoidis insisted that ratifying the EU deal -- designed to slash Greece's huge debt by nearly a third -- was more important, as several junior ministers also voiced their opposition. "The Greek people must ratify the (EU) agreement...," deputy finance minister Pantelis Oikonomou told NET. "A referendum on other issues is wrong, it's completely untimely." The Athens stock exchange was trading higher on Thursday despite the political and economic uncertainty, up by 1.3 percent one hour after the opening. In Cannes, German Chancellor Angela Merkel and French President Nicolas Sarkozy said they hoped that Greece would stay on board, but warned that Athens would not get a free ride. "The Greeks have to decide whether to continue the adventure with us or not," warned Sarkozy. "We hope to continue with the Greeks, but there are rules that have to be respected." "The Europeans and the IMF can't release the sixth tranche of loans to Greece until Greece endorses the package of October 27," Sarkozy said, calling for the referendum "if one is needed" to be carried out swiftly. Eurozone chairman Jean-Claude Juncker said that the currency union hoped to keep Greece as a member "but not at any price". Juncker, who leads the club of finance ministers from the 17 countries using the euro, told Germany's ZDF television network that the eurozone was not prepared to "constantly ride a rollercoaster IMF chief Christine Lagarde also warned she would not move on the next tranche of the Fund's loan to Greece until "all uncertainty is removed." The European leaders pledged to stand by the euro, even if the Greeks were to vote against it. "If the Greeks say they do not want to stay in the euro, we will accept it, but we will not abandon the euro," Merkel said. "We do not want to let the euro be destroyed, we do not want to let Europe be destroyed," stressed Sarkozy. "The Greek people are free to choose, but we are accountable for the stability of the eurozone." Greek officials had previously warned that the country only had enough money to pay its bills until mid-November. Papandreou claimed in Cannes that Greece had "quite a few days" ahead to pay wages and pensions without resorting to loan funds. But Venizelos appeared to contradict him, saying in his statement that the loan funds "have to be disbursed without delay." Venizelos had challenged Papandreou for the party's leadership in 2007.