Greece’s prime minister has abandoned his plan to hold a referendum on eurozone membership and instead set his sights on winning a parliamentary confidence vote, in a dramatic about-face welcomed by European leaders and financial markets.
Capping a day of extreme political turbulence in Athens, George Papandreou told his socialist colleagues that there was no need for a referendum after the conservative opposition promised to support the terms of a €130bn ($180bn) bail-out from the European Union, European Central Bank and the International Monetary Fund. “Failure to back the package would mean the beginning of our departure from the euro,” Mr Papandreou said. “But if we have consensus, then we don’t need a referendum.”
The prime minister’s abrupt reversal of a position that his cabinet had unanimously endorsed in the early hours of Wednesday morning overshadowed the first day of a summit in Cannes of leaders of the G20 group of large industrialised and emerging economies.