1 Nov 2011

Greek PM announces referendum on EU aid package

8:26 pm on 1 November 2011

Greece will hold a referendum on a new European Union aid package intended to resolve the country's debt crisis, Prime Minister George Papandreou says.

The package gives Greece a new 100 billion euro loan and a 50% debt write-off. .

There have been large-scale protests in Greece against the austerity measures introduced by the government.

Mr Papandreou told a meeting of his governing Socialist party that the government trusted the judgement of Greek voters.

"The command of the Greek people will bind us", he was quoted as saying by the AFP news agency.

He said a vote of no-confidence would also be held on the deal.

He set no date for the referendum, but indicated that it would be held after details of the deal have been finalised with the EU and the country's creditors.

The BBC reports that the referendum could derail the wider deal on the euro debt crisis since the Greek rescue package is a key part of the agreement reached in the early hours of Thursday after marathon talks by eurozone leaders.

Investors, the BBC says, have already suggested the wider deal is not adequate to deal with the crisis and now it is just possible the Greece's restive population could throw it out entirely.