Greek crisis: As it happened

Key points

  • Greek Prime Minister George Papandreou has addressed his MPs in parliament after telling an emergency cabinet meeting he is willing to drop the idea of a referendum on the EU bailout package
  • The PM said he was assigning two senior party members to hold talks with the opposition. If the opposition agrees to back the bailout deal in parliament, no referendum would be held, he said
  • The opposition New Democracy party says it would join a coalition government if Mr Papandreou agrees to stand down
  • He has ruled out a snap election, saying it would run the risk of Greece going bankrupt
  • Mr Papandreou still faces a confidence vote in parliament on Friday
  • All times GMT

    Hello and welcome to our live coverage of the unfolding drama in Greece and at the G20 in France. Political turmoil in Greece has deepened with at least two cabinet ministers expressing their opposition to their prime minister's plan to hold a referendum on the country's eurozone bailout package. Meanwhile, the economic crisis in the eurozone, which is seen as the biggest current threat to the global economy, is dominating the meeting of the G20 leaders which begins in Cannes today.


    Two Greek lawmakers from the ruling Socialist party now say they will abstain from a confidence vote on Friday, robbing the government of its parliamentary majority, state television reports.


    Less than 30 minutes to the emergency cabinet meeting in Athens. Reports suggest unhappy Socialist MPs demanded it, some of them conditioning their support for Friday's confidence vote on it.


    "Mr Papandreou should not have [announced the referendum]. I don't know how he is going to be able to mend things now to satisfy our partners that are lending us the money." That's the view of one man, George Kiliadi, interviewed by Reuters on an Athens street.


    France's Minister for European Affairs, Jean Leonetti, suggests the eurozone could live without Greece. Greece represents "2% of eurozone GDP and 4% of its debt", he tells RTL radio.


    More from Mr Leonetti on "curing" the Greeks: "We can help them, save them, but we can't save them if they don't want it. It's not because the medicine is bitter that you shouldn't take it, because the patient is very seriously ill."

    Audun Molde @audunmolde

    @audunmolde tweets: Greek drama upstages every other genre at the Cannes Festival this year #G20 #Hellas


    US President Barack Obama, in Cannes, has just paid tribute to French President Nicolas Sarkozy's handling of the eurozone crisis. He was making brief remarks to the press before the G20 summit.


    One of George Papandreou's own MPs, Vasso Papandreoun (no relation), has called for a new government to be formed, followed by early elections. It is "the only realistic proposal right now for the country to avoid collapse", the senior Socialist MP was quoted as saying by Reuters.


    Ramona, in Dubai, says: I believe the Greek Prime Minister George Papandreou is right, as the Greek people have the right to decide their future rather then the government deciding for them! That is called democracy!


    Pancha Chandra, in Brussels, Belgium, says: This cabinet rift at the eleventh hour will be the factor that saves Greece from further ruin. At long last wisdom has prevailed. But Greece has a steep mountain of debt to climb! Does it have the resilience given the firm backing of the European Union? Or will it make other surprising U-turns that could scupper all good will from other Euro countries? The jury is out!

    0953: Mark Lowen BBC News, Athens

    The government of George Papandreou is now teetering on the brink of collapse, potentially throwing Greece into a period of intense political instability


    Mr Obama said the most important task for the G20 summit in Cannes was to resolve the European financial crisis.


    The EU had taken some important steps toward a comprehensive solution, Mr Obama said, but details needed to be fleshed out about how the plan would be fully and decisively implemented.

    Changing of the guard in front of the Greek parliament in Athens, 3 November

    This photo from Athens shows the changing of the guard in front of the Greek parliament on Wednesday. Is another kind of changing of the guard on the cards?


    So the emergency cabinet meeting in Athens should be starting right now.

    Robert Peston

    @Peston tweets: Could European banks do more to ease debt burden on Greece?


    Pamela in Southampton, England writes: Having lived in Greece for 12 years I understand very well you cannot govern the Greeks without their consent. George Papandreou is doing the only thing he can do. If he does not have a referendum and get a yes, no matter what he says or the EU says - it won't happen. It's as simple as that.


    "I don't think the [Greek] government will last until tonight," says Costas Panagopoulos, managing director of pollsters ALCO, quoted by Reuters.


    For an idea of what may be going on in the corridors of power in Athens this minute, read our freshly updated Q&A on the Greek political crisis.

    Matthew Price

    @matthewwprice tweets: To #Greece via #Italy - will either have governments when I arrive?! #Eurocrisis

    Stephanie Flanders

    @BBCStephanie tweets: The game has changed. France & Germany want Greece in euro, but not at any price. Exit wd be terrible, but so is this.


    Asian markets fell on renewed fears for the eurozone today but the euro bounced back from earlier lows after news emerged that the Greek finance minister had referendum doubts, AFP reports.


    Reuters flashing that another senior Greek Socialist MP has called on Mr Papandreou to form a coalition. No name yet.

    Laura Kuenssberg

    @ITVLauraK tweets: Barroso presser about to start - after his plea to Greece for unity yday fell on completely deaf ears what can he say today? #G20

    Stavros Messinis

    @StavMessinis tweets: Seriously. Can you suggest an alternative PM for Greece? Anyone?


    Without a cash injection, Greece will probably default and may even leave the euro as soon as the year-end, Reuters writes in an analysis piece.


    Details of that Reuters flash: it was senior Greek Socialist MP Telemachos Hitiris who urged Mr Papandreou to form a coalition government and later call early elections. He said elections should be held only after the new bailout was approved.


    "The prime minister should call the other parties to join a coalition government and share the responsibility, to allow the European deal to pass and the next loan tranche to be disbursed," Mr Hitiris told reporters. "After that we should smoothly go to elections."

    Sotirios Dimitriadis

    Sotirios Dimitriadis in Thessaloniki, Greece writes: Papandreou wanted to trap the Greek people in a false dilemma between more austerity and an exit from the eurozone. What we need instead is a full renegotiation. We don't need a referendum, we need elections, a different government and different policies.

    Michael Hewson

    @michaelhewson tweets: Former Greek Finance Minister Stefanos Mano says Greece doesn't want a referendum #euro


    There is chatter developing on Twitter that Finance Minister Venizelos is poised to take Prime Minister Papandreou's job. The two men are old rivals for leadership of the Socialist party (or Pasok, to give it its Greek acronym).


    Greece has enough cash to last until mid-December, a government source tells Reuters. The country is due an 8bn-euro bailout instalment this month but eurozone leaders have warned the country will not receive any more aid until it votes to meet its commitments to the eurozone.

    French Foreign Minister Alain Juppe (L) talks to French President Nicolas Sarkozy in front of a guard of honour in cannes, 3 November

    This image is from Cannes this morning. It shows French Foreign Minister Alain Juppe (L) talking to French President Nicolas Sarkozy as they await Barack Obama.

    Stuart Hughes

    @stuartdhughes tweets: An AudioBoo as the #g20 summit opens in Cannes


    Baudouin Prot, head of French banking group BNP Paribas, warns the 50% debt relief offered to Greece is the bank's "final offer". If necessary, he adds, BNP Paribas is prepared to deal with the effects of a full Greek default.

    Efthimia Efthimiou

    @EfiEfthimiou tweets: Ok, now we have names for possible leaders of the new emergency government in #Greece. Papademos (was an ECB member) and Simitis (former PM)

    Sebastian D.

    @S0nntagskind tweets: Seriously, Greece? A national referendum about staying within the eurozone?...I guess some men really want to watch the financial world burn


    Greek ruling party MPs are working on a new coalition government, to be headed by former ECB official Papademos - party sources tell Reuters


    The economist Lucas Papademos was until recently vice-president of the European Central Bank and is currently an adviser to Prime Minister Papandreou.


    Mr Papandreou has not resigned and will not resign - chief of staff tells media (Reuters).


    The eurozone debt crisis has caused further turmoil in European debt markets, with Italy's borrowing costs reaching a record high.


    The gap between German and French debt has widened to a record high since the euro was created in 1999. Italy's borrowing costs have also surged. Investors are worried that a Greek default will spread financial contagion to other highly indebted nations.

    Anti-capitalist protesters gather in Cap d'Ail, near the Cannes G20 summit venue, 3 November

    This photo from Cap d'Ail, near the G20 summit in Cannes, shows anti-capitalist protesters this morning, one bearing a Greek flag.

    Haris Daskalothanassis writes:

    Our lives have been hell for two years. Instability, uncertainty and fear for tomorrow. The Greek people are just tired. We need stability, responsibility and competence on the part of our political leadership, a sense of where the country truly stands and a sense of where it is headed. Athens, Greece

    Tamsyn Montagnon writes:

    Once again Greek politicians betray the people of Greece, they care more about their political careers than dismal everyday reality of being a Greek citizen. Heraklion, Crete, Greece

    Dimitris Tsigos

    @tsigos tweets: We desperately need a #Federal #European government directly elected by the Europeans to deal with the #debtcrisis #EU #Greece


    According to an AFP news agency flash, the European Commission has just said it is impossible to quit the euro without quitting the EU.


    The Commission's latest statement will undoubtedly be seen as a sign that it is getting heavy with Greece. As to the legal position on withdrawing from the eurozone, or the EU, this December 2009 primer from the European Central Bank looks worth a read.

    David Ljunggren

    @reutersLjungg tweets: Rain sleeting down in Cannes, lashing the luxury yachts, and adding to general air of #Greece gloom #G20


    That European Commission statement on Greece: "The treaty doesn't foresee an exit from the eurozone without exiting the EU." From an unnamed Commission spokeswoman, quoted by AFP.

    The European Commission has clarified this reported quote -- telling the BBC that what was said is that the treaties simply do not envisage a country leaving the euro. Separately, there are procedures for leaving the European Union in the treaties.


    British Treasury Minister Mark Hoban tells the House of Commons that the Greek debt crisis is having a "chilling effect" on rest of UK and European economy. "This is uncertainty that the global economy can ill afford," he adds. Prime Minister David Cameron will make a statement on the issue to Parliament on Monday, he says.


    Andreas Andrianopoulos, a former Greek trade minister with the opposition New Democracy party, says Mr Papandreou made a mistake in calling for a referendum. "He was fed up of facing all this criticism by a society which is on the receiving end of a huge financial aid," he told BBC World Service.


    A French military orchestra is trumpeting in G20 leaders arriving in the pouring rain in Cannes for handshakes with President Sarkozy.

    US President Barack Obama (R) talks to German Chancellor Angela Merkel in Cannes, 3 November

    Here is a picture of US President Barack Obama (R) talking to German Chancellor Angela Merkel in Cannes today.

    Tom Bradby

    @tombradby tweets: Nobody comes to Cannes for rain. And the fact that it is slashing it down at the G20 kind of says it all, really.


    UK Prime Minister David Cameron has just told the BBC's Nick Robinson in Cannes: "I'm here to support the British economy. When the world is in crisis it is right to consider boosting the IMF."


    Mr Cameron added: "No government lost money by lending money to the IMF. There is no risk to British taxpayers of seeing the IMF perform its proper role - that's what we have always supported."


    Greek prime minister to visit president after today's cabinet meeting, Greek state TV reports (Reuters).


    The UK Government says it has "at no point" committed British taxpayers' money directly to Greece, or to the eurozone crisis fund. Suggesting in Parliament that the Government would be prepared to boost funding to the IMF, Treasury Minister Mark Hoban stressed that this would be for use across the world rather than reserved for the eurozone.


    Tweeters are speculating that a visit to the president by Mr Papandreou means he is about to resign.


    More on what the UK treasury minister has been saying about Greece and the eurozone. "There is no doubt the decision by the Greek prime minister has added to instability," Mr Hoban said. Asked if it was right for the Greeks to be consulted on the austerity programme through a referendum, the minister said he would not offer advice, adding it was "better for the Greeks to make their own decisions".

    Emma writes:

    The leader of the opposition has a lot to answer for. Without unity, we are slowly bleeding to death here! Either shut up and get behind the government, or offer us a viable alternative. Enough of the kindergarten politics. Thessaloniki, Greece

    Katty Kay

    @KattyKayBBC tweets: G20 - maybe we cannes't.

    Laura Kuenssberg

    @ITVLauraK tweets: Press conference now chaos, journo just fell off the stage, nearly a punch up! #G20


    A crisis in Italy would dwarf that in Greece, analysts agree. Reuters is reporting that six former Berlusconi parliamentary loyalists have called for a new government there. In a letter to the Italian prime minister, published in Corriere della Sera, they write: "Be the backer of a new political phase and a new government which would have the task, from now until the end of the legislative term, of implementing the agenda agreed with our European partners and with it, the indications which came from the European Central Bank."


    If Mr Papandreou's allies are counting on a new coalition government, it is unclear how much opposition support the idea will have. Simon Kedikogou, an MP from the conservative New Democracy party, is scathing. "The Greeks feel they have been tricked in the last elections by a party who said we have money," he told AP news agency. "They ended up taking their money and offering them no future."


    Prime Minister Papandreou is to go to the country's president within the next half hour. He will offer to stand down to allow a coalition government to take power.

    Steve Clewer

    @steveclewer tweets: The words 'chaos', 'economic' and 'problem' are all Greek in origin #etymology #G20 #greece #euro


    Greece's conservative opposition have asked for a caretaker government to be formed to see through the second bailout before early elections are held - Reuters.


    Antonis Samaras, head of the conservative New Democracy party, said: "I'm asking for the formation of a temporary, transitional government with an exclusive mandate to immediately hold elections. And the ratification of the bailout deal from the current parliament."

    1220: Gavin Hewitt, BBC Europe editor,

    blogs that Mr Papandreou has rolled the dice but may prove to be the big loser, overtaken by events.


    If you are just joining us, welcome to our live coverage of the drama unfolding in Greece, where a change of government seems imminent after a week which put the eurozone's debt strategy in question again, just when a deal seemed to have been clinched.

    1229: Mark Lowen, BBC News,

    reports from Athens that Mr Papandreou intends to ask the president to approve a new coalition government led by veteran banker Lucas Papademos.

    Greek Prime Minister George Papandreou grimaces after talks in Cannes, 2 November

    This image shows George Papandreou grimacing after talks with eurozone leaders in Cannes on Wednesday. The prime minister comes from one of Greece's best-known political dynasties. Read our profile.


    Socialist MP Eva Kaili has explained for the BBC why she wants a new government. ''I think now the only solution is to have a new government of national rescue and co-operation led by a person that is recognised by the majority [as] prime minister and tries to uphold the [bailout] agreement of 26 October," she told World Service's Newshour programme.


    What do we know of Lucas Papademos, tipped to lead the next Greek government? He is both a former head of the Greek central bank and a former vice-president of the ECB. Reuters says he is a respected figure within Greece. In May, he called for a "sizeable and credible privatisation plan" for Greece as a key part of its solution to the debt crisis.


    Reuters is flashing that a group of 30 Greek MPs, both ruling party and "opposition", have signed a letter calling for a unity government.

    Tea Party Ewok

    @TPEwok tweets: A large wooden horse has appeared outside the G-20 meeting at Cannes.


    Watch the video of Nick Robinson's interview with British PM David Cameron.

    Lucas Papademos at a meeting in Frankfurt as vice-president of the European Central Bank, 15 January 2009

    This image from January 2009 shows Lucas Papademos, tipped to become Greece's new prime minister, in his then role of ECB vice-president.


    Asked about future UK membership of the eurozone, Treasury Minister Mark Hoban told Parliament in London : "I don't think that there's any intention for us to join the euro at a time when it's breaking up."


    More on that Greek cross-party letter calling for a unity government. The 30 or so signatories wrote: "We consider the formation of a unity government necessary to take over the implementation of national goals and lead the country as soon as possible and securely to elections."


    Mr Papandreou says he is not resigning - Greek state TV.


    Greek state TV (quoted by AFP) says Mr Papandreou insisted he was not resigning when he spoke at today's emergency cabinet meeting. Reuters quoted a source in his office as saying: "There is no resignation by the prime minister... There is no resignation by the cabinet."


    British bookmaker William Hill is offering odds of 4/6 that Greece will cease to use the euro by the end of 2012, AFP reports. "For the first time we are betting odds-on that the Greeks will quit the euro," said spokesman Graham Sharpe.


    The European Central Bank has cut eurozone interest rates to 1.25% from 1.5%. The move surprised economists, who welcomed it - they had not expected such a move until December. It is seen as a move to ease pressure on eurozone economies.

    Aaron McCord

    writes about the possibility of Greece leaving the euro on the BBC World Service Facebook page: I think it would be great. Think about how much their currency would plummet. It would give me and others an excuse to visit and tourists bring money to spend in shops, restaurants and hotels. People would have to hire additional staff, open new business. It might really help there economy.


    Greek president's office says president has no plans to meet Mr Papandreou "as of now" - Reuters.


    The European Commission has clarified an earlier AFP report (See 1137) quoting an unnamed EC spokeswoman which suggested EU treaties did not "foresee an exit from the eurozone without exiting the EU". A spokesman tells the BBC that the treaties simply do not envisage a country leaving the euro. Separately, there are procedures for leaving the European Union in the treaties.

    Rachel Knight

    writes on the BBC World Service Facebook page: Greece should tell the German and French presidents to get lost, stop bullying them and get out of the euro. It was doomed from the outset and those arrogant politicians need to admit they stuffed up and undo all the mess before it gets worse.

    Bill Hall

    writes on the BBC World Service Facebook page: Greece will suffer either way, so they might as well leave the eurozone and get it over with. At least they will have a chance at an Argentina-style recovery.


    The Greek government welcomes the statements made by the opposition leader, a Greek government official has told Reuters. Earlier, the conservative opposition leader Antonis Samaras called for the formation of a transitional government.


    According to Reuters, a spokesman has said the government is now ready to discuss the idea of a temporary government.


    The Greek president's press office has confirmed to the BBC that there are no planned meetings between Prime Minister Papandreou and the president.


    It follows reports that a meeting was due to held in which Mr Papandreou would offer to stand down.


    The new governor of the European Central Bank, Mario Draghi, has said that the current instability on the world's financial markets makes economic growth hard to predict.


    More from Reuters, who are quoting a spokesman as saying the government is considering setting up a caretaker government with the opposition. "We welcome New Democracy's decision to support the 26 October (EU bailout) deal," spokesman Ilias Mossialos told reporters, according to the news agency. "As far as the other proposals are concerned, we are ready to seriously discuss them, in the interest of country."

    1416: Mark Lowen BBC News, Athens

    says events have moved fast. After speculation that Mr Papandreou had intended to see the president to offer his resignation and the formation of a national unity government, that plan now appears in doubt. Ministers in the cabinet meeting are said to have urged Mr Papandreou to resign, something he is trying to resist, with his official spokesman telling journalists - Greece has a prime minister.

    Mark Butcher

    writes on the BBC World Service Facebook page: What's in it for us if Greece goes back to the drachma? We'll all be able to enjoy amazingly good value holidays again, the one thing that Greece has got going for it and the one thing on which its economy depends.

    Adrian Morley from Manchester, UK,

    If William Hill is offering 4/6 on that Greece will cease to use the euro by 2012, why don't the Greeks simply bet 700bn euro on an exit, vote it through then pay off their debts with the proceeds? Or up it to 1tn euro and that would keep them in the manner to which they have become accustomed - for a few more years, at least.


    More on what Mario Dragi, the new ECB governor, said after announcing an interest rate cut of 0.25%, to 1.25%. He said: "The economic outlook continues to be subject to particularly high uncertainty and intensified downside risks. Some of these risks have been materialising which makes a significant downward revision to forecasts and projections for average real GDP growth in 2012 very likely."


    "Our priority is to stand loyal towards the country in this very difficult time," says Anni Podimata, a Greek MEP from the ruling Pasok party who still backs Mr Papandreou. She told BBC World Service that progress has been made in Greece - there is now a "national consensus" she says about the "gravity" of the situation and the need to address it.


    Mr Papandreou's office says the prime minister is still in parliament. He will meet with MPs from his own party at 17:00 local time (15:00 GMT), an official says.

    Frank in Kent, UK,

    writes: Great watching democracy in action. I understand the Eurozone is going to hell in a handcart but does that justify the harassment and bullying of the Greek people and for that matter Mr Papandreou by the rest of the European politicians. He is the only person offering the Greeks a real say in their future. The behaviour by the majority of European politicians, especially Merkel and Sarkozy is disgraceful and shows us what they think of European citizens.


    After Mr Papandreou's meeting with MPs from his Pasok party, he will give a speech in parliament about tomorrow's confidence vote, his office says.

    Malcolm Imrie in London, UK

    writes: How could anyone who has followed events in Greece in the last few weeks imagine for a minute that the majority of the Greek people would tolerate any kind of "national unity" government headed by Lucas Papademos, former head of the Greek Central Bank and former vice-president of the European Central Bank, who would no doubt take his instructions from Sarkozy and Merkel? If there is one group that most Greeks hate even more than the current government, it is surely bankers.


    Reports coming in suggest the proposed referendum has been scrapped.


    Two officials close to the Greek prime minister said he had scrapped the idea after the opposition would not back it, AP reports. The leader made the comments in an emergency cabinet meeting earlier.


    The leader said the referendum was never a purpose in itself, according to Reuters. AFP is also reporting that Mr Papandreou is ready to scrap the idea, citing media reports.

    Maria Xenios, Heraklion, Crete

    writes: I am a 36-year-old mother living in Greece. Should you have children you will be able to capture the feeling of the following everyday stories. Children at school in Athens fainted because of hunger. An adult in my home town waited for a child to come out of a bakery and stole the bread of the boy's hands. How many days should one be hungry before they leave their children hungry? In Greece probably a lot. Drachma or Euro is indifferent to me. The best currency is one that will stop the above happening.


    Mr Papandreou says that elections at this moment would entail a big risk of bankruptcy, Reuters reports.


    The news agency also quotes the Greek leader as saying eurozone membership is not in question.

    Laura Kuenssberg

    @ITVLauraK tweets: Papandreou keeping Cannes waiting - huge confusion over his intentions despite senior sources expecting him to have gone already #G20


    A statement from Mr Papandreou's office, cited by AP news agency, said he was prepared to drop plans for the referendum. "The referendum was never an end in itself," Mr Papandreou told the cabinet. "We had a dilemma - either true assent or a referendum. I said yesterday, if the assent were there, we would not need a referendum."


    European leaders, who agreed the terms of the bailout last week, are deeply opposed to the idea of a referendum. The deal would give the heavily indebted Greek government 130bn euros (\u00a3111bn; $178bn) and a 50% write-off of its debts, in return for deeply unpopular austerity measures.

    David Jolly

    @djolly_iht tweets: No #Greece referendum means public won't feel ownership of austerity terms. How long till the next #euro-zone bailout?


    An upsum of events so far: Pressure has been building on Greek PM George Papandreou to resign after he declared this week that he planned to hold a referendum on a European aid package agreed by leaders last week. Latest reports suggest he is prepared to scrap the referendum and hold talks with the opposition, who are calling for a transitional government and snap elections. Mr Papandreou due to address parliament later.


    According to Reuters, Mr Papandreou suggested to cabinet members earlier that he was prepared to let the idea of the referendum go. "I will be glad even if we don't go to a referendum, which was never a purpose in itself. I'm glad that all this discussion has at least brought a lot of people back to their senses," Mr Papandreou said in the text of his speech released to media.


    "I will talk to (opposition leader Antonis) Samaras so that we examine the next steps on the basis of a wider consensus," the leader added.


    "We must hail the fact that (opposition party) New Democracy will vote for the loan deal," Mr Papandreou said during the meeting.


    He also said immediate elections would risk a default - essentially rejecting demands by New Democracy leader Antonis Samaras, who wants a transitional government and snap elections.


    Amid the eurozone crisis, commentators wonder if anything else will get on the G20 summit's agenda. The Independent's Ben Chu Tsays it will be difficult for leaders to concentrate on the original programme. But in the New Statesman, Simon Chouffot says Nicolas Sarkozy is still determined to plough on with trying to convince leaders to take on a new transaction tax. The BBC See Also blog rounds up more comment.


    "Well of course I believe that Mr Papandreou should quit, today. As soon as possible because he is not serious anymore, he's joking. And that's a bad joke." That's the view of one resident in Athens, Athina Rozaki, who spoke to Reuters.


    We are proud for what we have achieved so far and what we are achieving everyday - PM Papandreou says.


    We have managed to close our ears to speculation to avoid bankruptcy, he says. We have secured funding of salaries and pensions, he says.


    "We have tried to find the funds to avoid bankruptcy. This is our first goal," Mr Papandreou tells parliament.


    "We have taken responsibility and we have made an achievement," he says.


    The bailout deal made last week is a "landmark for the country", Mr Papandreou says. "It opens new possibilities."


    Debt reduction will be immediately and will affect peoples lives directly over the next few years, Mr Papandreou says. "We are expecting an immediate saving next year."


    He said what Greece had been through was "proof of the strength of our society".


    Decision whether to go to referendum is "our decision... a decision for the government".


    Our position in the euro is what is at stake, Mr Papandreou says.


    The only way of remaining in the euro is to adhere to the terms of last week's bailout deal, the prime minister adds, as he addresses the Greek parliament.

    Ian Wishart

    @IanWishart tweets: Journalists in Cannes now crowding round television screens watching Papandreou address Greek parliament #g20


    We cannot have decisions made by the markets and not by the people, Mr Papandreou says.


    Referendum was intended to allow "a clear decision by the Greek people", Mr Papandreou says. He says he trusts the "wisdom and the maturity" of the Greek people more than that of the "political establishment".


    The Greek leader says it is "certain" that turning down the bailout package would be the beginning of coming out of the single currency.


    Would be "catastrophe" to go to elections now, Mr Papandreou says. Elections would risk bankruptcy, he says.


    If the opposition are willing to negotiate, we are willing to ratify and implement bailout deal - Papandreou


    Parliament must vote on ratifying the deal, the prime minister tells MPs.


    If you're just joining us, welcome to the BBC's live coverage of the Greek eurozone crisis. Prime Minister George Papandreou is still addressing parliament.


    Mr Papandreou has just finished speaking. His address lasted about 45 minutes.


    The BBC's Paul Moss in Athens says the speech was not exactly a rousing address. The prime minister is still continuing with the idea of a referendum but this could be Mr Papandreou trying to back out of it, he says.


    Greek Finance Minister Evangelos Venizelos is saying that Athens must reassure its international partners that it will immediately do everything it can to implement the EU bailout deal, Reuters reports.


    Mr Venizelos, who is now addressing Pasok MPs in the Greek parliament, says Greece must say it is not holding the referendum. That doesn't seem to concur with what the prime minister was saying earlier.


    More from Mr Venizelos: He says the country needs a sixth tranche of funds before 15 December.


    Greece analyst Sappho Xenakis, of Oxford University, tells the BBC there is clearly jockeying for position going on within the governing Pasok party.

    1657: Evgeny Morozov

    @evgenymorozov tweets: Somewhere far away Plato is writing another dialogue on the vices of referendums


    Well there's been a flurry of activity over the past hour or so. We'll be bringing you minute-by-minute updates, breaking news from our correspondents on the ground, analysis from around the world and your reaction to events. Do get in touch with your thoughts - by email, text or Twitter. We'll publish what we can.


    Just to recap: Immediately after Mr Papandreou finished speaking, his finance minister Evangelos Venizelos told Pasok MPs that - contrary to what the prime minister believed - the referendum on the proposed EU bailout should not go ahead.

    1711: George Tsifoutidis writes:

    I feel disgraced by Papandreou. He conned the voters - by pledging that "money is available" - into voting his party in and then could not find a decent way to change policies early enough. Instead he started crying out publicly about the enormous debt and brought speculators into play. He may be fine as leader of the Socialist International or any other NGO but not fit to lead a country through dire straits. Hellenikon, Greece


    French President Nicolas Sarkozy is now giving a press conference at the G20 in Cannes. He says things in Greece are "progressing".


    Danny Alexander, chief secretary to the UK Treasury, tells the BBC that the situation in Greece is "causing real uncertainty" and needs to be resolved "as quickly as possible".


    "If the euro explodes, Europe will explode," President Sarkozy tells a press conference at the G20 in Cannes.


    French President Nicolas Sarkozy says "we will not meddle" in Greek politics, but "we must defend Europe and the eurozone".

    1738: Artemis G in Athens, Greece

    writes: Greece declares insolvency, ergo, can't pay its debts. Then what? Where will the funds come from to keep the country running? Not in Greek coffers, I assure you, so it will have to borrow yet again! If it reverts to the drachma the new debts will be astronomical and even more impossible to pay back. Plus, it's naive to think that this would boost business. Fuel, petrol, computers, machinery, domestic appliances - all of these are essential to any country and all HAVE to be imported. Greece doesn't produce them and if it did, they'd be unaffordable.


    Greek media are reporting that the Syntagma and Evangelismos metro stations closed this evening on the orders of the police, who said they wished to prevent "incidents". We'll bring you more on that as we get it.

    1751: Kenneth Berger

    writes on the BBC World Service Facebook page: The end of euro is in sight. Here is where the dominoes start to fall. There is no stopping it now.


    The Greek opposition leader is asking Prime Minister George Papandreou to resign, Reuters reports.


    Conservative opposition leader Antonis Samaras says snap elections must be held within six weeks, Reuters adds.


    We're ending our live coverage for the day, but don't forget to visit the BBC news website for all the latest updates on the Greek bailout crisis.


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