Merkel suggests Greek euro referendum

Germany's chancellor apparently waded into Greece's choppy political
waters today, with Athens saying Angela Merkel suggested that the
country should hold a referendum on the euro together with next month's
national elections.

But government spokesman Dimitris Tsiodras ruled out the idea, which he said Mrs Merkel floated during a phone call with Greek president Karolos Papoulias earlier in the day.

"(Merkel) also conveyed to the president thoughts on holding a referendum along with the elections, with the question of to what extent Greek citizens wish to remain in the eurozone," Mr Tsiodras said in a statement.

"However, it is obvious that the issue lies outside the jurisdiction of the caretaker government," he added.

Greece is set to hold elections on June 17 to end a political deadlock after a previous vote on May 6 produced a hung parliament.

The rise of parties opposed to Greece's austerity commitments - made to secure vital international rescue loans - has raised fears that if anti-bailout parties prevail, the country could be forced to leave the euro.

A German government spokeswoman confirmed that Mrs Merkel had a "confidential" phone conversation with Mr Papoulias. She declined to confirm or deny the Greek statement on the referendum idea.

Germany maintains that it is up to the Greeks to decide their destiny, said the spokeswoman.

AP