Government toys with idea of referendum on measures

The confusion surrounding Greece?s economic prospects grew on Wednesday as the government toyed with the idea of holding a referendum on whether it should enter into a new loan agreement with its creditors, and the country?s European commissioner suggested that discussions about an exit from the euro had already begun.

Prime Minister George Papandreou met President Karolos Papoulias on Wednesday amid rumors that he was mulling the idea of a referendum to decide whether his government should proceed with privatizations and further austerity measures in return for more loans from the European Union and the International Monetary Fund.

In his meeting with Papoulias, Papandreou indicated that despite not finding during talks on Tuesday any common ground with opposition leaders on what policies the government should follow, there was at least agreement on what the aims of its policies should be.

?During my meetings, I established that there is a common target, which is to reduce the debt and deficit,? said Papandreou. He added that ?decisions need to be taken with the widest possible coordination and consensus of our party, other parties and, of course, the Greek people.?

On Tuesday evening, officials close to Papandreou suggested the government might opt to hold a referendum. However, several hours later, government spokesman Giorgos Petalotis said there had been no discussion about a referendum but that the idea had not been ruled out. ?There is no decision or thought about carrying out a referendum,? he told journalists before adding, ?The prime minister has said that referendums could be carried out when there is a need for wider consensus.?

Meanwhile, EU Commissioner for Maritime Affairs and Fisheries Maria Damanaki created further unease by suggesting that Greece?s exit from the euro was a possibility.

?The greatest achievement of postwar Greece – the euro and the country?s European course – are in danger,? she said in a statement. ?The scenario of Greece distancing itself from the euro is on the table. We either agree with our creditors on a program of tough sacrifices that brings results, and assume the responsibilities for our past, or we return to the drachma.?

A spokesman for Economic and Monetary Affairs Commissioner Olli Rehn denied there had been any talks about Greece leaving the euro.

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