EU Leaders: No Bailout For Greece Until It Fulfills Commitments

Posted November 2nd, 2011 at 7:45 pm (UTC-5)
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APExpress 4 – 11/2/2011 4:31:00 PM – AP-APTN-2030: France G20 Arrivals 2

French President Nicolas Sarkozy and German Chancellor Angela Merkel say Greece will receive no more European bailout aid until it fulfills its commitments to the eurozone.

The two leaders made the announcement Wednesday in Cannes after a meeting with Greek Prime Minister George Papandreou to discuss his surprise announcement Monday of a referendum on a eurozone bailout deal reached last week.

The plan hammered out October 27 includes a 50 percent write-off on the Greek debt to private European banks. But it also includes tough austerity measures for Greece, which are fiercely protested in the Mediterranean country.

Speaking to reporters after Wednesday's meeting, Mr. Sarkozy said that Greece must decide whether it wants to stay in the eurozone or return to its former currency . He also said if the provisions of the loan agreements are not respected, neither Europe nor the IMF can release any more money for Athens.

German Chancellor Angela Merkel said that Germany wanted to stabilize the euro zone with Greece as a member, but stabilizing the euro was ultimately more important than rescuing Greece.

Senior European leaders also told Mr. Papandreou that the bloc cannot wait for weeks on the Greek referendum. Mr. Papandreou said the vote would be held on December 4 or 5 and that Greece's future in the eurozone will depend on it.

International Monetary Fund Director Christine Lagarde said a decision on the next installment of bailout money for Greece will be made after the referendum.

Key European leaders held talks Wednesday in Cannes, France, ahead of the G20 summit Thursday.

Greece is not a member of the G20 group of leading and emerging economies, but Mr. Papandreou's referendum plan has become the summit's central issue.

The call for the Greek vote sent panic through world stock markets plunging Tuesday.

The agreement reached last week calls for banks to forgive $140 billion in Greek debt to help stabilize its precarious finances. But the Greek people have protested loudly, and sometimes violently, against the austerity measures demanded by international creditors.

Greek Cabinet ministers have given their support for Mr. Papandreou's referendum plan. But whether he can survive Friday's scheduled confidence vote in parliament remained in question.