Greek people to decide on European debt deal in a surprise referendum
The deal aims to seek 50 per cent losses for private holders of Greek bonds and provide the troubled eurozone member with €100 billion (£87bn) in additional rescue loans.
Mr Papandreou told Socialist members of parliament he would seek a vote of confidence in parliament.
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Hide AdHis Socialist government has seen its majority reduced to just three seats and its approval ratings plummet, amid harsh austerity measures that are likely to send the country into a fourth year of recession in 2012.
Mr Papandreou appeared to take many by surprise by saying that a hard-bargained agreement that took months for Europe’s leaders to hammer out would be put to a public ballot. It would first referendum in Greece since 1974, when the monarchy was abolished.
“This will be the referendum: the citizen will be called upon to say a big Yes or a big No to the new loan arrangement,” he said. “This is a supreme act of democracy and of patriotism for the people to make their own decision… We have a duty to promote the role and the responsibility of the citizen.”
The move allows Socialist politicians – who have faced months of strikes, sit-ins and violent protests – to pass the responsibility for the country’s fate to the Greek people.