It was the most direct acknowledgment yet by top European leaders that a breakup of the euro is not only possible but so tangible they need to begin making preparations.
The European leaders said they would speed implementation of current crisis-fighting plans so they will be ready for any outcome in the Greek vote, now slated for early December.
“We wish to continue building the euro with our Greek friends, but there are certain rules,” French President Nicolas Sarkozy said at a late-evening news conference. “It is up to the Greeks whether they want to continue on this road.”
Appearing at his side, German Chancellor Angela Merkel said that Papandreou’s unexpected decision to put the new crisis plan to a popular vote had caused such a deep “psychological change” that European officials felt it necessary to draw a line and demand a quick resolution to the sudden uncertainty.
Papandreou did not appear with them, but he said after the meeting that he believed that “the Greek people are wise and will make the right decision.” He expressed confidence that the vote will build national unity to take on the economic reforms and other changes needed to continue with an international rescue program and stay with the euro.
His grip on power in doubt, Papandreou came here to plead his case that only with a proven popular mandate could he proceed with the tough austerity and reform measures being asked in return for a new slate of international loans and debt relief.
But his argument fell on impatient ears. European officials have been bartering with Greece for a year and a half over how to stabilize the country’s economy, and during that time conditions throughout the euro region have only worsened. The regional economy is slowing, the credit standing of even presumably solid countries such as France is at risk, and officials said there was no time to think in narrow national terms.
The IMF also said it would not recommend further loans to the country until “the referendum is completed and all uncertainty removed,” its managing director, Christine Lagarde, said in a statement.
The latest bailout plan for Greece includes more than $100 billion in debt relief and perhaps $150 billion in new international loans but is being viewed by some in the country as a recipe for more years of austerity and extensive monitoring by international officials. Papandreou says the vote will put the country clearly on the side of remaining within the euro and allow future economic reforms to proceed without the intense political battles he has had to fight at each turn under the current program.
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