November 2, 2011 / 11:55 AM / 6 years ago

Berlin urges Greece to clarify vote impact

BERLIN (Reuters) - Germany urged Greek leader George Papandreou on Wednesday to provide clarity on how his proposed referendum would impact a bailout package from Europe and the IMF, and what question he would put to the Greek people and when.

Chancellor Angela Merkel said before leaving Berlin for talks with Papandreou in Cannes, ahead of a G20 summit, that Europe wanted to implement a plan to buttress Greece’s finances that was thrashed out only last week.

“We want to put this plan into practice, but for this we need clarity and the meeting tonight should help with precisely this,” said Merkel, who was due to meet the Greek premier with France’s Nicolas Sarkozy and European and IMF officials.

Papandreou stunned his partners in the 17-member currency union and shook financial markets by calling a referendum on the 130 billion-euro deal.

Merkel’s spokesman said the Greek premier still had crucial questions to answer.

“We have to talk to the Greek government this evening in Cannes about what time frame they envisage and above all what question they will ask people -- we don’t know this, and a lot depends on it -- and how it all relates to work going ahead in Europe on the aid package,” said spokesman Steffen Seibert.

“The time until the referendum must not be lost time for Greece nor for the euro zone. We cannot afford that in the current international situation.”

German European Commissioner Guenther Oettinger said Papandreou’s actions had “made the situation considerably worse for countries which don’t have the highest credit rating, and the danger of further setbacks is rising.”

Oettinger and Seibert said Papandreou should have given European leaders advance warning of his referendum plans at last week’s twin summits on the euro crisis.

“Germany and the international community feel solidarity and responsibility toward Greece, but on the other hand Greece has responsibilities to its European partners,” said Seibert.

CRISIS WEIGHS ON MERKEL

“My worry is that we will have an unstable situation until the referendum. The Greeks have many good grounds to vote for the package. The steps we decided on are a good opportunity for their country. But there’s a lot of frustration and resignation in Greece. If the Greeks actually vote no, the consequences are unforeseeable,” said Oettinger, the EU energy commissioner.

The German finance ministry said it was now unclear whether Greece would get its next 8 billion euro aid tranche from the European Union and International Monetary Fund. This had been due in mid-November, before the referendum takes place.

“The tranche has not yet been paid. That is the situation today. How things proceed is yet to be seen. But according to everything we hear from Greece, there is no urgent need for the payout until mid-December, more or less,” said finance ministry spokesman Martin Kotthaus.

Underlining the political toll the crisis is taking on Merkel, an opinion poll done for the magazine Stern suggested her handling of it was eroding voter support for her widely expected bid for a third term in 2013.

Half of those polled did not want the conservative leader re-elected while 39 percent were in favor. Asked for their view of Merkel’s management of the euro crisis, 46 percent said she had not reacted well while 42 percent voiced their approval.

With both Merkel and Sarkozy expected to put pressure on Greece at the pre-G20 meeting, German Finance Minister Wolfgang Schaeuble told a Hamburg newsppaper he “assumed Greece is aware of its responsibility and will go along with the measures that were agreed together and unanimously.”

But Manfred Weber, the German vice-chairman of the center-right bloc in the European Parliament, said that Athens was “playing with fire. If the Greeks vote no, there will be no alternative but a sovereign default.”

The head of Germany’s banking association, Michael Kemmer, said while there should be widespread approval for a write-down on Greek sovereign debt among private creditors, this would not be feasible before the Greek referendum.

Additional reporting by Matthias Sobolewski; Writing by Stephen Brown; Editing by Robert Woodward

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