Greece Controversial Referendum Likely on December 4

Greece has been hit by a wave of strikes in protest against tough government measures, including salary freezes and tax increases. Photo by EPA/BGNES

Greece is expected to vote on a referendum on the European Union bailout package in the first week of December amid EU warnings that the country will be kicked out of the eurozone if the voters say no.

The referendum is expected to be held on December 4, reports said.

Greece's cabinet gave late on Tuesday a unanimous backing to a controversial plan by PM George Papandreou to hold a referendum on a EU debt rescue package.

Following the seven-hour meeting, government spokesman Elias Mossialos said: "The cabinet expressed its support."

"The referendum will take place as soon as possible, right after the basics of the bailout deal are formulated," he added.

"The referendum will be a clear mandate and a clear message in and outside Greece on our European course and participation in the euro," Papandreou told told an emergency cabinet meeting, as cited in an official statement, circulated to the media.

On Tuesday, French President Nicolas Sarkozy has slammed Greek Prime Minister George Papandreou for proposing a referendum on the plan agreed upon by European leaders last week, saying this is "the only way" to fix the country's debt.

The referendum proposal "surprised all of Europe," Sarkozy told reporters in Paris.

"The plan adopted unanimously by the 17 members of the euro area last Thursday is the only possible way to resolve the problem of Greek debt," he said.

Last week EU leaders agreed to remit 50% of the massive Greek debt in return of widescale austerity measures geared to tame in the financial crisis that has gripped the country and has threatened the eurozone.

This has provoked the latest upsurge in popular protests across Greece, with citizens taking on to the streets against what they see as punitive and unfair job and spending cuts.

Analysts have commented that news of the referendum had sent "shockwaves" across stock exchanges, raising fresh notes of pessimism regarding the debt crisis in Europe.

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