Eurozone heads call for Greek decision on euro

City A.M. Reporter
Germany and France have told Greece it should make up its mind by mid-December whether it wants to stay in the Eurozone when Greeks vote on a €130bn (£111bn) bailout.

French president Nicolas Sarkozy and Germany's Angela Merkel have summoned George Papandreou for crisis talks in Cannes, before a G20 summit of major world economies, to push for rapid implementation of measures to tackle the Eurozone debt crisis, which Athens has thrown into doubt.

Sarkozy said Papandreou's announcement of a referendum "took the whole of Europe by surprise" and his prime minister, Francois Fillon, told parliament: "Europe cannot be kept waiting for weeks for the outcome of the referendum.

"The Greeks must say quickly and without ambiguity whether they choose to keep their place in the Eurozone or not."

Opinion polls suggest most Greeks think the deal thrashed out by Eurozone leaders last week is a bad one, but much will depend on how Papandreou frames the debate, either on the bailout - and the painful cuts it demands - or membership of the euro, which remains popular.

Greece's European partners will press for the latter.

German Chancellor Merkel struck the same tone of exasperation and impatience as Fillon in comments before flying to Cannes for hastily arranged meetings of European Union policymakers (1630 GMT) and with Papandreou (1930 GMT).

"We agreed a plan for Greece last week. We want to put this plan into practice, but for this we need clarity and the meeting tonight should help with precisely this," she told a news conference with Turkish prime minister Tayyip Erdogan.

Germany's finance ministry hinted that European partners and the International Monetary Fund may withhold the next €8bn aid instalment to Athens, due this month, until after the referendum.

"The tranche has not yet been paid. That is the situation today. How things proceed is yet to be seen. But according to everything we hear from Greece, there is no urgent need for the payout until mid-December, more or less," finance ministry spokesman Martin Kotthaus said.

EU leaders endorsed the disbursement of the money last week, but the IMF board has yet to set a date for a decision. An IMF source said the way forward would depend on the outcome of Wednesday's EU talks with Papandreou, which IMF managing director Christine Lagarde will join.

French officials said Papandreou would be pressed to put the bailout deal to parliament first in hopes of reassuring financial markets which panicked when he called the plebiscite.