Eurozone members have agreed to cut Greek debt by 50% and offer the country rescue loans of €130billion, but a referendum will be held to decide on acceptance.
However, George Papandreou, the prime minister of Greece, has announced that he plans to hold a referendum on whether or not to accept the proposed plans. Papandreou has stated that he is behind the bail-out plan, but that the Greek people must decide the ultimate fate of their country.
In an impassioned speech, the prime minister declared: ‘this vote of confidence will be a foundation stone on which we will build a new structure, a new Greece.”
In the majority of polls voters seem to favour remaining in the euro, however there has been much frustration at the proposed cuts facing the country, sparking speculation that the upcoming referendum will return a ‘no’ vote.
Many European leaders have expressed concerns that such a vote could trigger a worrying setback in the restoration of the Greek economy. Raoul Ruparel, head of economic research at the anti-federalist think-tank Open Europe, highlighted how a ‘no’ vote could leave Greece with: “no funds and no government, teetering on the edge of a disorderly default and a disorderly exit from the eurozone”.
It appears that leaders of Eurozone countries will not be able to present an approved deal at the G20 meeting on Thursday as they had originally hoped; instead Europe must wait for the outcome of Greece’s referendum.