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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The final shortlist for Labour’s next general secretary is a victory to Corbyn

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick.

One thing that hasn't changed in the Labour party is that the hand that controls the shortlist controls the world. Labour's power brokers used that power very effectively yesterday in drawing up the shortlist for the party's next general secretary: in the red corner we have Jennie Formby, senior Unite official and the preferred candidate of the leader's office. And in the, uh, other red corner we have Christine Blower, former general secretary of the National Union of Teachers.

Drawing up a list of options that consist of your preferred candidate and a smack on the head is a very old Labour trick (as well as being a very old New Labour trick) and this one is a masterclass of the genre. While no Corbynsceptic will be able to fairly argue that Blower isn't qualified for the role, her long history in movements outwith Labour means that she will be an unpalatable choice for most Corbynsceptics on the party's ruling national executive.

Victory to Jeremy Corbyn, then? Well, it is a sign that the leader of the opposition's office is getting better at managing these internal battles. But it's also a sign that, for the moment, Corbynite hegemony doesn't look any more inclined to be consultative than what came before. (See also: the party's Brexit policy.)

There is a large dash of the old in Corbyn's new politics. And as far as Labour goes, whether you think that's a good thing or a bad thing speaks to the most interesting schism in that party: between those who see the promise of Corbynism largely in what it could do the country, and those who see it as a catalyst for real party change that looks likely to unused.

Stephen Bush is special correspondent at the New Statesman and the PSA's Journalist of the Year. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.