Thursday, November 3, 2011

Euro zone contemplates future without Greece


European leaders were preparing on Thursday for the possibility of Greece leaving the euro zone to preserve the 12-year-old single currency.

French President Nicolas Sarkozy and German Chancellor Angela Merkel told Prime Minister George Papandreou at a torrid meeting in Cannes that Athens would not receive a cent more in aid -- Greece was due an 8 billion euros aid payment this month -- until it votes to meet its commitments to the euro zone.

In Athens, Greece's powerful finance minister broke ranks with his prime minister, rejecting a proposed referendum on staying in the euro, hours after they received an ultimatum from France and Germany to make up their minds.

The growing chaos in Greece and uncertainty over the euro zone sent stocks and commodity prices lower in Asia, and fuelled a rush into safe-haven German bonds.

On his return with Papandreou to Athens from Cannes, Finance Minister Evangelos Venizelos issued a defiant statement, saying Greece's euro membership was a historic achievement and "cannot depend on a referendum".

A finance ministry source said Venizelos, who was kept in the dark by his Socialist rival about Monday's referendum call, opposed risking a public vote at this crucial moment. Learn More...

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