Greece to cancel referendum on bail-out package

After a dramatic day, the Greek PM indicates referendum will be dropped as national unity talks cont

After a day of tumultous political developments, the Greek prime minister, George Papandreou, has said he is ready to drop a proposed referendum on the latest bail-out package from the eurozone. Four ministers, including the Finance Minister, Evangelos Venizelo, opposed the referendum and pressured Papandreou to drop it on the basis that eurozone membership is too important.

The EU bailout, agreed last month, would give the heavily indebted Greek government a further 130bn euros (£111bn; $178bn) and a 50 per cent write-off of its debt. However, to receive this pay-out, the government would have to agree to even more deeply unpopular austerity measures.

Papandreou said the referendum was "never an end in itself". A key part of this decision appears to be opposition politician Antonis Samaras deciding to support the rescue package.

The prime minister's own future is still uncertain. While the BBC reported earlier that he was preparing to resign, Greek state TV said that he had ruled this out. However, the opposition New Democracy party has said it would only be part of a coalition government if Papandreou stood down. Since it looks increasingly likely that a national unity government might be necessary, this could be a problem.

A little closer to home, the UK has admitted that it may have to pay more into the IMF to support Greece's financial recovery. It means some back-pedalling for David Cameron, who has made much of his achievements in restricting Britain's donations to the eurozone bailouts. My colleague Rafael Behr explores this issue in more detail in an earlier Staggers post:

The government (or at least its Conservative side) think it is a terrible idea for sovereign nations to bind themselves into a single currency and yet supports the urgent acceleration of that process. It rejects the contribution of British taxpayers' money to a bailout that might explicitly support a euro stabilisation process but would be happy to contribute to one that helped eurozone countries independently, thereby supporting euro stabilisation indirectly. This is not a sustainable position.

In a public speech, Papandreou retained his trademark composure, but looked pale. He spoke of "wag[ing] a battle of Titanic proportions, our first duty being to fend off bankruptcy, to prevent the country collapsing". The challenge of balancing the contesting demands of foreign lenders and the Greek public appears to have been too much. Even if he survives the coming hours or weeks, it is difficult to see how Papandreou will reinvigorate his spent political capital for much longer.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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