Party Members Revolt Against Papandreou; Referendum, PM's Future In Question

Although the heart of Greek Prime Minister George Papandreou may have been in the right place in calling for a public vote on whether or not to (a) accept the latest version of the EU’s bailout and (b) to stay in the EU, the decision has created an angry response from EU leaders and a revolt from within the PM’s own party.

The surprise call for a national referendum by the public was met with outrage by European leaders. Papandreou was summoned to an emergency crisis meeting with Germany’s Angela Merkel, France’s Nicolas Sarkozy, and the IMF’s Christine Lagarde in Cannes, France yesterday in response to the announcement. The Greek premiere was told in no uncertain terms that Greece needs to decide immediately on the issue of staying in the EU and that all aid would be cut off until the decision was made.

In his own party, Papandreou’s decision, which reportedly was made in private and without consultation of cabinet members, has been met with nothing short of a revolt. On Tuesday, six members of the Pasok party wrote a letter to Papandreou calling for his resignation and a high ranking member of the party resigned. Another Reuters article pointed out that Greek ruling party lawmaker Dimitris Lintzeris called on Prime Minister George Papandreou to resign on Thursday.

In addition, Reuters reports that dissident lawmakers in Papandreou’s party have spoken out against the referendum and called for a national unity government or early elections, casting doubt on whether Papandreou can win a confidence vote on Friday.

Next, CNBC said Thursday that after a number of Pasok party MPs declared that they would not support the referendum, Papandreou was left with the support of just 149 MPs in a parliament of 300.

Both Reuters and the FT report on Thursday that following his return with Papandreou to Athens from Cannes, Greek Finance Minister Evangelos Venizelos issued a defiant statement to the press, noting that Greece's membership in the euro was a historic achievement and "cannot depend on a referendum".

Another Reuters article cited a Finance Ministry source as saying that Venizelos did not want a referendum given that pending issues such as the loan installment and the completion of the bailout plan had not been sorted out.

The combination of reports has led to speculation that (a) the referendum is unlikely to take place, (b) Papandreou cannot win a confidence vote, and (c) Papandreou may need to step down.

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