Germans warn of Greek euro exit after referendum gambit

Tue Nov 1, 2011 1:07pm EDT
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By Noah Barkin and Stephen Brown

BERLIN (Reuters) - Germans expressed fury and frustration on Tuesday at the Greek prime minister's shock decision to call a referendum on a new financial rescue package, political leaders saying it could plunge Greece into bankruptcy and force it out of the euro zone.

George Papandreou stunned his own people and his European colleagues with the announcement on Monday evening, only days after European leaders had agreed the outlines of a second bailout for Athens at marathon summit talks in Brussels.

The move hammered markets and prompted leaders of the big euro zone countries to hastily arrange a crisis meeting with Papandreou on Wednesday in Cannes, a day before the start of a G20 summit.

"Everyone is asking why Papandreou is doing this? Why now? Is he messing with us?" the top-selling tabloid Bild said on its website.

Michael Roth, Europe spokesman for the opposition Social Democrats (SPD), told Reuters the referendum call showed courage but said Papandreou was "playing with fire."

"If the Greeks are not ready to support Papandreou's reforms, Greece faces an uncertain future in Europe," he said.

Greece has been hit by a wave of anti-austerity strikes and Papandreou has suffered defections by lawmakers in his Socialist party. He said he needed wider political backing for deep spending cuts tied to the new 130 billion euro aid deal.

A poll at the weekend showed nearly 60 percent of Greeks had a negative or partly negative view of the rescue, suggesting a majority of voters could vote 'no' in the referendum, which will probably be held early next year.   Continued...