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Greek Referendum Could Jeopardize Bailout Deal


And let's go next to Europe, where the message in recent days was that European leaders have finally worked out a financial bailout. The plan would eliminate much of the debt of Greece, whose possible default has threatened to shake the whole European economy and more. But it also includes more austerity measures for Greece. And the prime minister there shocked Europeans yesterday when he announced that he would hold a referendum on the plan.

Joanna Kakissis is on the line from Athens to tell us more. Joanna, hi.


INSKEEP: Why is the prime minister calling on his people to vote on this?

KAKISSIS: Well, you know, this is really the last card that Prime Minister George Papandreou had left to play. Greeks are so down on the Socialist government and on the austerity measures. And they're looking around and they're seeing an economy that was much worse off than it was two years ago. They see the wage cuts and the pension cuts and the tax hikes and they're like when is this all going to stop, because the debt isn't going down and the austerity measures are killing the middle class. The unemployment rate, it just came out, is now 17.5 percent, which is almost double what it was before austerity. Personal bankruptcies, homelessness, even suicides are all on the rise. So you know, people are like, when is this going to stop?

A poll last Sunday by the Greek newspaper To Vima said that nearly 60 percent of Greeks view the latest deal negatively.


So are you saying that the prime minister is in a position where he's arguing that he cannot go forward as a democratic politician unless he has the vote of the people behind him?

JOANNA KAKISSIS, BYLINE: Yeah, what he's trying to do - and some people think it's smart, some people think it's absolutely crazy - is that he wants to shift responsibility for the fate of the country from his government to the public. He's called the referendum an act of patriotism. And he wants to frame the question in a way that Greeks are going to ask themselves: What does this referendum mean for us?

In other words, you know, okay, austerity is terrible and that's been acknowledged by everyone including the prime minister and it's been hard for everyone. But what's the alternative? Bankruptcy, like - or is it returning to the drachma, which was currency for the euro? Finance Minister Evangelos Venizelos put it this way: Do Greeks want to remain in Europe with the euro, in a country that belongs to the developed world, or do they want to go back to the 1960s?

INSKEEEP: Well, let me just ask though. I mean the reason that this has shocked people, I think, and put a few jaws on the floor, is because people wondered could this actually pass given how massively unpopular the whole bailout has been in Greece? Is there any chance that the public would approve this?

KAKISSIS: Well, actually, there is. If the question is framed the right away. Because even though most Greeks oppose austerity, they actually support being in the eurozone. So if the government frames it in a way asking Greeks, do you want the euro, do you want to stay in the eurozone, do you want to stay in the European Union, there is a chance that it could pass.

INSKEEEP: Well, what happens if the Greeks vote no to this bailout, which is seen as so important to the European economy and maybe to the world?


KAKISSIS: Yeah, that's - and that's the big question I think that's terrifying everyone, and Greeks included. If the people say no to the referendum, I think that the whole bailout deal is going to fall apart. And lots of people think that the whole bailout deal is going to fall apart.

That means that Greece will stop getting international loans - international bailout loans. It means that they're going to not be able to pay their bills. It means that they're going to default. And things are going to get very, very ugly then. And that's the scenario I think the government wants people to really think about before they vote no.

INSKEEEP: Well, how is the government going to go about campaigning for this over the next couple of months?

KAKISSIS: Well, here's what they're going to do first. They're going to hold another confidence vote. There was a confidence vote this summer that - they survived a confidence vote because they do have a three-person majority at the moment. And they will likely survive this one. So that vote, that confidence vote in parliament, is probably going to be held on Friday. And I think after that it's all about selling the idea of Europe to Greece, and the idea of remaining in Europe to Greece.

If they can convince Greeks that austerity is worth the sacrifice in the end to remaining in Europe, then that will convince people to vote for the referendum. If they can't frame it in that way and it continues to be a referendum on how this government is handling austerity, then, you know, the government is in a lot of trouble.

INSKEEEP: Joanna, have there been some Greeks responding to all this by saying, well, actually, yes, we have been living a contradiction, we've been wanting to stay in the eurozone but protesting against these austerity measures, and actually it is time for us choose up sides, one side or the other?

KAKISSIS: Yeah, there definitely are the groups that have been discussing this all along. Lots of newspaper commentators, people on the streets have said exactly that. It's very hard for people to pay their bills right now. And it's very hard for them to imagine the future. But yes, at the same time, people are saying, again, what's the alternative? What's going to happen if we get kicked out of the eurozone? Will things get so terrible that we won't even be able to imagine, you know, how bad life will be?

INSKEEEP: Joanna Kakissis is in Athens. Thanks very much.

KAKISSIS: Thank you.

INSKEEEP: And apparently not everyone in the prime minister's government agrees with his call for a referendum and the risks involved. Members of the ruling party are now calling on the prime minister to resign. It's MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.