Greece Mulls Referendum on Euro Zone Membership - Report

Greek Prime Minister George Papandreou reportedly hopes – against all odds - that the outcome of the referendum would give a fresh mandate for his Socialist government to continue the austerity drive. Photo by EPA/BGNES

Greek Prime Minister George Papandreou is considering calling for a referendum on whether Greece should continue to tackle its debt crisis within the euro zone or exit the single currency, Kathimerini English language newspaper reported on its website on Tuesday.

The surprising move comes as pressure has mounted from all sides with Greece's foreign creditors pushing for quicker budget cuts, while large-scale citizen street protests against austerity are held almost daily, the newspaper said, citing unnamed sources.

A bill submitted in parliament, paving the way for a referendum, is to be discussed in the coming days, the newspaper added.

Papandreou had previously resisted calls for a euro referendum, but now hopes that the outcome would give a fresh mandate for his Socialist government to continue with an austerity drive backed by Greece's international lenders -- the European Commission, the European Central Bank and the International Monetary Fund, the newspaper said.

The cabinet is reportedly split over the idea, which if confirmed will come as a dramatic and illogical U-turn of the Greek government policy so far. Analysts have commented that there are not many chances that the pro-euro lobby will win in the referendum and besides austerity measures are never popular.

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