Europe warns Greece to accept debt deal or quit euro
French President Nicolas Sarkozy and German Chancellor Angela Merkel warned that Greece must quickly abide by the terms of a bail-out deal if it wants to stay in the euro.business Updated: Nov 03, 2011 09:41 IST
French President Nicolas Sarkozy and German Chancellor Angela Merkel warned that Greece must quickly abide by the terms of a bail-out deal if it wants to stay in the euro.
After talks with Greece's beleaguered Prime Minister George Papandreou on Wednesday, the visibly angry eurozone leaders insisted that if he wants to hold a referendum then he must do so as soon as possible to clear up all uncertainty.
And they warned that if Greece does not agree to meet the terms of the debt deal hammered out last week by eurozone leaders, it will not get "one more cent" from the next planned installment of EU and IMF bail-out.
Without this eight-billion euro transfer, observers warn, Greece would face problems paying government salaries and a messy debt default within weeks.
Papandreou agreed Greece's future in the euro was at stake and said a vote could be called on December 4. He did not reveal the wording of the referendum question, but said he was sure Greek voters wanted to stay in the euro.
The Greek leader said after meeting the European leaders "that we could move the referendum as soon as possible, organise it as soon as possible, and we believe that we can have a referendum on the 4th of December."
He insisted that it was the "democratic right" of the Greeks to vote on the bailout plan -- which foresees more tight austerity measures -- but added: "I believe that the Greek people want to be in the eurozone."
He conceded however that the popular vote put the country's euro membership at stake: "This is a question of whether we want to remain in the eurozone. That's very clear."
Merkel and Sarkozy both said they hoped that Greece would stay on board, but warned that Athens would not get a free ride.
"The Greeks have to decide whether to continue the adventure with us or not," warned Sarkozy. "We hope to continue with the Greeks, but there are rules that have to be respected."
"The Europeans and the IMF can't release the sixth tranche of loans to Greece until Greece endorses the package of October 27," Sarkozy said, calling for the referendum "if one is needed" to be carried out swiftly.
The European leaders also pledged to stand by the euro, even if the Greeks were to vote against it.
"If the Greeks say they do not want to stay in the euro, we will accept it, but we will not abandon the euro," Merkel said.
"We do not want to let the euro be destroyed, we do not want to let Europe be destroyed," stressed Sarkozy. "The Greek people are free to choose, but we are accountable for the stability of the euro zone."
Following the talks Papandreou set off back to Athens to face a confidence vote in parliament. Sarkozy will host the leaders of the world's most powerful economies at a two-day summit in Cannes starting Thursday.