The Greek government is expected to be unable to pay wages for state workers and pensions next month without a planned injection of £8 billion of EU cash. George Papandreou, the Greek prime minister, met his French and German counterparts ahead of today’s G20 summit of world leaders. Mr Papandreou has called a referendum on whether the Greek public supports the bail-out. The decision has plunged the rescue into turmoil. David Cameron said yesterday that the world was facing a “financial storm” as Greece may now be forced out of the single currency. Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”. A showdown between the most powerful leaders in the eurozone and George Papandreou is under way amid increasing concern about the Greek prime minister's plan to hold a referendum and the impact it is having on financial markets. Ahead of a crunch two-day summit of the leaders of the G20 in Cannes, the German chancellor, Angela Merkel, and French president, Nicolas Sarkozy, were holding make-or-break talks with Papandreou. Greece was warned it will not be handed €8bn (£6.9bn) of bailout money due this month unless there is a swift yes vote in the referendum. Officials at the Greek interior ministry have identified two potential dates in December for the vote – which cannot take place until ratified by parliament. That, in turn, requires Papandreou to survive night's crucial vote of confidence in his fragile government in Athens. The European leaders met their international counterparts amid signs that a new recession is now stalking the eurozone – blamed in part on the sovereign debt crisis. A report showed factories in the 17-nation euro area suffered their sharpest decline in output in two years. I hope the Euro will dissapear and the European Union as it is will realize that it will be impossible to fulfill germany's dreams of ruling our sovereign nations !
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Thursday, November 3, 2011
The Greek government is expected to be unable to pay wages for state workers and pensions next month without a planned injection of £8 billion of EU cash. George Papandreou, the Greek prime minister, met his French and German counterparts ahead of today’s G20 summit of world leaders. Mr Papandreou has called a referendum on whether the Greek public supports the bail-out. The decision has plunged the rescue into turmoil. David Cameron said yesterday that the world was facing a “financial storm” as Greece may now be forced out of the single currency. Simon Johnson, former chief economist at the International Monetary Fund, said that “we are now looking straight into the face of a great depression”. A showdown between the most powerful leaders in the eurozone and George Papandreou is under way amid increasing concern about the Greek prime minister's plan to hold a referendum and the impact it is having on financial markets. Ahead of a crunch two-day summit of the leaders of the G20 in Cannes, the German chancellor, Angela Merkel, and French president, Nicolas Sarkozy, were holding make-or-break talks with Papandreou. Greece was warned it will not be handed €8bn (£6.9bn) of bailout money due this month unless there is a swift yes vote in the referendum. Officials at the Greek interior ministry have identified two potential dates in December for the vote – which cannot take place until ratified by parliament. That, in turn, requires Papandreou to survive night's crucial vote of confidence in his fragile government in Athens. The European leaders met their international counterparts amid signs that a new recession is now stalking the eurozone – blamed in part on the sovereign debt crisis. A report showed factories in the 17-nation euro area suffered their sharpest decline in output in two years. I hope the Euro will dissapear and the European Union as it is will realize that it will be impossible to fulfill germany's dreams of ruling our sovereign nations !
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World leaders are gathering in this Riviera city, more accustomed to movie stars than motorcades, for the annual summit of the Group of 20 industrial and developing nations.
But the deliberations of the G-20 are now a sideshow to the Greek main event. Europe had hoped this summit would be an opportunity to demonstrate to the rest of the world that it has its debt crisis under control. An all-night euro-zone meeting just last week had fashioned a "comprehensive" plan to aid Greece, bolster the bloc's bailout fund and recapitalize the region's banks. That is now in tatters, and the image Europe is presenting is one of more confusion and uncertainty than ever.
In a series of hurriedly scheduled meetings on Wednesday, Europe's top powers huddled to plot their strategy for responding to the new uncertainty posed by Greece and to dress down the Greek prime minister.
The call for a referendum, particularly if presented as a question of euro or no euro, is a risky bet. Should the referendum fail, Greece would come unmoored from the euro zone and likely default on its €350 billion ($480 billion) of debt—sending a giant shock wave that could test the resilience of other weakened euro-zone countries. But should it succeed, the Greek government would have a strong mandate to push through austerity measures and proceed with the European Union's plan.
Mr. Papandreou said the referendum, which must be approved by the Greek Parliament, could be held Dec. 4 at the earliest. He said Wednesday he had tried for a broader political consensus on Greece's bailout but "this wider consensus did not exist." He said he hoped the Greek people would vote affirmatively.
"The people are wise and capable of making the right decisions for the benefit of our country," he said. "A positive decision by the Greek people is not only a positive decision for Greece, it is a positive decision for Europe."
French President Nicolas Sarkozy said the Greeks would get no more euro-zone rescue aid—"no French taxpayer money, no German taxpayer money"—until the question is answered. Without aid, Greece would be bankrupt within weeks.
The extraordinary rupture with the rest of Europe—whose leaders have insisted for months that an exit from the currency union is simply inconceivable—follows Greek Prime Minister George Papandreou's stunning decision Monday to call a referendum on his country's bailout
CANNES, France—Europe's leaders, making it plain that they've reached the end of their patience with Greece, demanded that the beleaguered nation declare whether it wants to stay in the euro currency union—or risk going it alone in a dramatic secession.
"Does Greece want to remain part of the euro zone or not," German Chancellor Angela Merkel said. "That is the question the Greek people must now answer."
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