Greece risks meltdown after bailout vote bombshell

Tue Nov 1, 2011 4:47pm EDT
 
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By Dina Kyriakidou and Lefteris Papadimas

ATHENS (Reuters) - The Greek government faced possible collapse on Tuesday as ruling party lawmakers demanded Prime Minister George Papandreou resign for throwing the nation's euro membership into jeopardy with a shock call for a referendum.

Caught unawares by his high-stakes gamble, the leaders of France and Germany summoned Papandreou to crisis talks in Cannes on Wednesday to push for a quick implementation of Greece's new bailout deal ahead of a summit of the G20 major world economies.

The euro and global stocks were pummeled on financial markets after the Greek move threw into question the survival of crucial efforts to contain the euro zone's sovereign debt crisis.

Six senior members of Greece's ruling PASOK socialists, angered by his decision to call a plebiscite on the 130 billion euro rescue package agreed only last week, said Papandreou should make way for a "politically legitimate" administration.

Papandreou chaired a cabinet meeting, expanded to include more ministers after the referendum bombshell, where he was expected to fend off demands to call a snap election.

A leading PASOK lawmaker quit the party, narrowing Papandreou's slim majority to 152 of 300 seats, and several others called for a government of national unity followed by a snap election, which the opposition also demanded.

Papandreou needs 151 votes to enact the referendum. If any of the dissenters votes against, it cannot be held. But his first hurdle is a vote of confidence on Friday.

Papandreou told the cabinet he believed he would both win the vote and hold the referendum as planned.   Continued...

 
<p>Protesters gesture in front of the Greek parliament during a rally against government austerity measures in Athens June 29, 2010. REUTERS/John Kolesidis</p>