Greek Prime Minister George Papandreou on Friday spoke out strongly against Germany’s idea of sanctions against serial budget sinners, saying it would trigger a referendum in the country.
“I have told (German Chancellor) Angela Merkel and other EU politicians that if this is the case then I have to ask the Greek people to decide on this in a referendum,” he told parliament.
The euro came under renewed pressure after the European Union’s statistics office, Eurostat, announced that Greece’s budget deficit came in at 15.4 per cent in 2009, about 2 percentage points higher than the 13.6 per cent estimated in April this year.
The European Union will determine early next year whether it will extend the amount of time Greece has to repay a 110 billion euros (144 billion dollars) bailout that saved the country from default.
Under the terms of the agreement Greece will need to begin repaying loans in 2013. Many economists have expressed doubts as to whether its economy will be able to generate enough economic growth to pay back its debts.
Merkel, together with French President Nicholas Sarkozy, has been pushing for revisions to the EU treaty in order to bring in tough sanctions, including the suspension of voting rights, against members that threaten the euro’s stability by running high government debts.
The two EU heavyweights shocked the bloc in October when they called for changes to the EU’s treaty – usually an arduous political slog – to set up a permanent eurozone bailout facility and allow for the suspension of voting rights for recalcitrant members.
Treaty change is one of the hottest topics in EU politics, not least because the current set of rules, the Lisbon Treaty, came into force just 11 months ago, after 10 years of wrangling. Few leaders welcomed the idea of reopening the debate.
Politicians have come to view referenda on EU initiatives as an all-but-certain way of killing them, after referendum defeats in France, the Netherlands and Ireland since 2005.
(source: DPA)
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