Greek government on brink as crisis grips G20 summit

Michael Settle

UK Political Editor

Friday 4 November 2011

THE embattled Greek government is teetering on the brink of collapse today.

HARD TIMES: Protesters gathered as finance ministers fought to prevent meltdown in the eurozone. Picture: Getty Images

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Michael Settle UK Political Editor IN CANNES

As the political and financial crisis gripping Athens over-shadowed the first day of the G20 summit, European leaders talked for the first time of a possible Greek exit from the eurozone to preserve the single currency.

World leaders again anxiously urged Europe to act swiftly to stop contagion spreading from its sovereign debt crisis.Chancellor George Osborne, emerging from a longer-than- expected meeting with his finance minister counterparts, said: “There was a real sense of urgency in the room about the economic situation.”In London, Treasury minister Mark Hoban confirmed the UK had contingency plans to deal with the potential collapse of the euro.He had raised eyebrows in the Commons by referring to the euro “breaking up”, as he reiterated there were no plans for the UK to join.In Cannes, as world leaders discussed various matters, including bolstering the International Monetary Fund as a confidence-building measure to prevent a further economic crisis, all eyes were on Greece.Evangelos Venizelos, Greece’s Finance Minister who Prime Minister George Papandreou famously left in the dark about his referendum announcement on Monday, broke ranks with his leader, demanding that the government openly ditch the idea.Rebels in the ruling Pasok party also spoke out against the poll and called for a national unity government or early elections, casting doubt on whether Mr Papandreou would survive beyond tonight’s vote.The Greek leader, who saw off earlier rumours he would resign, said his referendum call, which sparked panic on global financial markets, “was never a purpose in itself”, and he would be happy if it were not held.He said the key moment came when Antonis Samaras, leader of the opposition New Democracy party, changed his tune, dropped his criticism of the eurozone andIMF bailout of Greece, and suggested that some form of unity government could be created. If talks led to a consensus in support of the plan, there would be no need for a referendum, argued Mr Papandreou.Mr Samaras called for Mr Papandreou to stand down, for a caretaker government and for snap elections.On Wednesday, French President Nicolas Sarkozy and German Chancellor Angela Merkel warned Mr Papandreou that Athens would not receive a £7 billion aid instalment, due this month, until it met its pledges to the eurozone.European stock markets and the euro rallied in volatile trading as the likelihood grew that a highly risky referendum would not go ahead.The European Central Bank also provided a surprise boost by cutting interest rates by one-quarter of a percentage point to 1.25% and saying its policy of buying eurozone government bonds would continue for now with limited scope to support its monetary policy.China, Russia and the US pressed Europe for swift action to contain the debt crisis.

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Greek government on brink as crisis grips G20 summit

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