Eurozone's ultimatum to Greece: put up or get out

Referendum brought forward after pressure from France and Germany, while Greeks told that bailout will be withheld until after vote on euro membership

Greece last night agreed to hold an early referendum on the Eurozone crisis and to make the vote a simple question of whether Greeks wanted to remain in the euro after France and Germany warned that it would not receive bailout funds without doing so.

The Greek Prime Minister, George Papandreou, who stunned European capitals by announcing the referendum earlier this week, was placed under intense pressure in emergency talks that carried on late into the night on the eve of the G20 summit in Cannes.

He agreed to bring forward the referendum to early next month – 4 or 5 December – and to ask the Greek people to decide on what would amount to a simple "in or out" question.

The German Chancellor, Angela Merkel, said after the talks broke up: "The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?" It was agreed that Mr Papandreou could choose the referendum wording himself but that he must not lead the Greek people to believe that they could reject the painful austerity medicine contained in last week's €1 trillion eurozone bailout package and still remain within the euro.

France and Germany had earlier given Athens a stark warning. The EU and IMF would withhold an €8bn payment to Greece due next month unless the referendum was held rapidly, and focused on membership of the euro. This amounted to a threat to turn off Greece's life-support machine and plunge the debt-crippled country into default.

The wording of the referendum question could be crucial. Polls indicate that most Greeks are hostile to the terms of the deal but are anxious to stay in the euro and the European Union.

Chancellor Merkel and President Nicolas Sarkozy warned Mr Papandreou in Cannes last night that other eurozone countries would rather pull the plug on Greece – and shove it out of the euro – than face months of market uncertainty. They said a Greek "train crash" was preferable to a prolonged period of market turmoil that might increase speculation against Italian and French debt, destroy the euro and plunge the world into a recession.

Chancellor Merkel said: "We would rather achieve a stabilisation of the euro with Greece than without Greece, but this goal of stabilising the euro is more important." Speaking at a joint press conference with Ms Merkel, President Sarkozy said: "Our Greek friends must decide whether they want to continue the journey with us."

Mr Papandreou said last night that he was confident that he could win a "yes" vote next month. "The Greek people want us to remain in the eurozone," he said. "We are part of the eurozone and we are proud to be part of the eurozone. Being part of the eurozone means having many rights and also obligations. We can live up to these obligations. I do believe there is a wide consensus among the Greek people and that's why I want the Greek people to speak."

Mr Papandreou did gain some authority earlier yesterday when, after a six-hour meeting that wrapped up at 3am, his Cabinet decided unanimously to back his plans for a referendum, even though its own party has shown scant appetite for the proposal. But it was reported that several ministers voiced their opposition to the decision.

The parliamentary debate in Athens on the confidence motion began yesterday afternoon amid open hostility to the plan from the media and many politicians.

The Conservative opposition leader, Antonis Samaras, said Mr Papandreou had "put the country in the centre of a global storm". On its front page, the left-leaning newspaper Eleftherotypia described the Prime Minister as "the Lord of Chaos".

Mr Papandreou's hopes of prevailing in the confidence vote hang by a thread. With the nominal support of 152 of 300 seats, it would take only a small rebellion to thwart his plans and force elections. The minds of Greek legislators were concentrated by the news that the EU and IMF may hold back €8bn of aid due to be paid to Greece this month.

Brussels believes that Greece has enough funds to struggle on until December. An EU official told Reuters: "The sooner Greece holds the referendum, the sooner the sixth tranche will be paid. But right now, it isn't going to be paid."

Opposition fury over sacking of military chiefs

Greek opposition leaders reacted with outrage yesterday to the sacking of the country's military chiefs, calling it a bid to stack the armed forces with party loyalists before a possible government collapse over Greece's debt crisis.

Late on Tuesday, the socialist government replaced the heads of the army, navy and air force and the leader of the joint chiefs-of-staff. Officials said the move was planned long ago and unrelated to political turmoil. But the main opposition, the conservative New Democracy party, said: "We won't accept this decision."

Greek governments have kept a tight rein on the armed forces since a seven-year military junta collapsed in 1974. Army chiefs are often selected on the basis of their party loyalty. The outgoing military leadership was appointed in August 2009 by the previous conservative administration, just before national elections were called. REUTERS

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable