Greece to hold European debt deal referendum

George Papandreou announces referendum to be held in a few weeks, after the European agreement is finalised

Greece will hold a referendum on a new European debt deal reached last week.

"This will be the referendum: the citizen will be called upon to say a big yes or a big no to the new loan arrangement," the troubled country's prime minister George Papandreou announced to Socialist members of the Greek parliament.

"This is a supreme act of democracy and of patriotism for the people to make their own decision We have a duty to promote the role and the responsibility of the citizen.

"We trust citizens, we believe in their judgment, we believe in their decision."

Eurozone leaders agreed last week a second, 130bn bailout for the cash-strapped country as well as a 50% write-down on its crippling debt to make it sustainable.

The referendum will be held in a few weeks, after the agreement is finalised, according to Reuters.

It will be the first referendum in Greece since 1974 when the monarchy was abolished by a landslide vote, held months after the collapse of a military dictatorship.

The Greek government has seen its majority reduced to just three seats in parliament. Its approval ratings have meanwhile plummeted amid harsh austerity measures.

The country looks set to spend its fourth year in recession in 2012.


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