N.Y. TImes: Greece to Hold Referendum on New Debt Deal

Πηγή: Ν.Υ. Τimes

Niki Katsantonis

ATHENS — Prime Minister George Papandreou announced Monday night that his Socialist government would hold a rare national referendum on a new debt agreement for Greece that was hammered out with the country’s foreign creditors last week, raising questions about Greece’s ability to follow through on its part of the hard-won deal to stabilize the euro.

The surprise announcement, made to lawmakers in Athens, again chained the health of the European Union to Greek domestic politics. Standard & Poor’s 500-stock index fell almost 2.5 percent and the Dow Jones industrials fell about 2.3 percent. European markets, which closed before the announcement, were also down sharply on Monday.

Mr. Papandreou said that the decision on whether to adopt the deal, which includes fresh financial assistance for the country but also imposes unpopular austerity measures, belonged to the Greek people. “Let us allow the people to have the last word, let them decide on the country’s fate,” he said, describing the vote ahead as “an act of patriotism.”

The move effectively pushes responsibility for painful economic choices from the Socialist party onto the public. The country’s last referendum, 37 years ago, abolished the monarchy after the end of the military dictatorship.

On Thursday, after European leaders and the International Monetary Fund had finally reached an accord to bolster the Greek economy and resolve the euro zone’s financial crisis, Mr. Papandreou had hailed “a new day for Europe and for Greece.” But the deal has proven broadly unpopular within the country.

On Sunday, the center-left daily newspaper To Vima reported that a majority of Greeks had negative views of the European debt deal, which includes a 50 percent writedown on the country’s debt and 130 billion euros ($182 billion) in new loans.

The passage of progressively harsher austerity measures has proven incendiary for much of the public, setting off widespread strikes sometimes accompanied by episodes of street violence. There is growing anger at Germany, France and other European parties to the pressure on Greece to reign in spending so painfully and forcing the country’s hand on structural changes in exchange for aid.

Mr. Papandreou also said that he would seek a parliamentary vote of confidence in his administration, just four months after seeking, and winning, a similar vote to bolster his government before pushing an earlier batch of austerity measures into law.

Government sources said that the confidence vote was expected by the end of the week, with the referendum much later, in December or even January. Exactly what voters would be asked was not clear.

Opposition parties had demanded that the Socialists call a snap general election, moving up a contest that was scheduled for 2013. But Mr. Papandreou said that a snap election would be “simply dodging the issue.”

Christine Hauser contributed reporting from New York
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